Jujjavarapu Achyuta Rama Rao vs Axis Bank Limited

Subhasis Dasgupta, J

At the very threshold of this case, it requires mention that on the prayer of the learned advocate for both parities, three (3) criminal revisional

application being CRR No. 355 of 2019, CRR No. 356 of 2019 and CRR No. 373 of 2019 were heard together, having found some common element

in each of the three items required to be addressed by this court. These three revisional applications were originated at the instance of the petitioner,

erstwhile director of Super Agriseeds Private Limited, made as one of the accused in connection with three prosecutions, instituted by

complainant/Axis Bank Limited, for the cheques involving different amount contained in each of the cheque, having been dishonoured by the Bank.

These three revisional applications are all alike in sense that in each of the revisional application, petitioner had prayed for quashing of the pending

proceeding before the court below, taking a specific plea that the petitioner was not a signatory to the cheque dishonoured, and further prior to the

commission of the offence, the petitioner had already tendered his resignation and his resignation had been duly accepted by the Registrar of the

Company.

Learned advocate Mr. Souvik Mitter, for the petitioner covering three cases referred hereinabove submitted that petitioner was the erstwhile Director

of the company, and the moment when the offence was committed, the petitioner was no longer the Director of the company so as to hold him to be

vicariously liable for the company, as the petitioner had already submitted his resignation on 1st April, 2015, which was accepted by the Registrar of

the company on 10.10.15. Learned advocate for the petitioner further submitted that he was not a signatory to the cheque dishonoured in all the three

cases. It was sought to be established that the dishonoured cheque was issued by one Mr. Ravi Srinivas Sunkarapalli, the Chairman, Director of the

company, being a signatory of the accused company, and not by the petitioner himself. Adhering to a copy of the order, passed in CRR No. 3056 of

2018 with CRAN 209 of 2019, rendered by Co-ordinate Bench of this court on 5th March, 2019 learned advocate for petitioner submitted that on the

self-same ground one of the Directors, who was also not signatory to the cheque in question, in connection with a proceeding pending before the

learned court below pertaining to complaint case CS No. 73089 had been quashed, and candidly submitted further that relying upon such decision, as

already rendered by Co-ordinate Bench of this court, the pending proceedings in connection with a case being CS No.72320 of 2018 now pending

before the learned Metropolitan Magistrate, 10th Court, Calcutta, and CS 73089 of 2018 and CS 72551 of 2018 now pending before the learned

Metropolitan Magistrate, 4th Court Calcutta should be allowed to be quashed.

Learned advocate for the complainant/opposite party Mr. Kaushik Chatterjee, honestly submitted that he had the occasion to defend the

complainant/O.P/Bank, in the case referred above and he had participated in the hearing process resulting in decision as already mentioned.

Admittedly there left nothing to show that having felt aggrieved with the decision, delivered by Co-ordinate Bench of this Court in connection with

CRR No.3056 OF 2018, complainant/O.P already had preferred appeal and the same is pending.

Before addressing the issue, mentioning of some salient facts may be of useful assistance in properly addressing the issue, required to be answered by

this court. The criminal revisional application being CRR 355 of 2019 involved an amount of Rs.4,94,896/- having drawn on 15th June, 2018. The

second criminal revisional application being CRR No. 356 of 2019 involved an amount of Rs.2,94,700/- having drawn on 15th June, 2018, while the

third criminal revisional being CRR No. 373 of 2019 involved an amount of Rs.3,40,435/-having drawn on 15th June, 2018. Separate prosecution was

started by the complainant/OP for different cheques having disbonoured after service of notice of demand. Admittedly the petitioner now proposing

quashment is on bail. The significant fact, as revealed during course of hearing, is that the moment when the cheque was drawn by the drawer of the

dishonoured cheque, the petitioner was no longer Director of the accused company, as the petitioner had already submitted his resignation on 1st April,

2015, which was duly accepted by the Registrar of the company on 10.10.15. Further petitioner was not the signatory to the dishonoured cheques.

It would be profitable her to refer the relevant paragraph of a decision delivered by the Apex Court reported in (2013) 8 SCC 71 delivered in the case

of Aparnaa. Shah vs. Sheth Developers Private Limited and Anr. which may be mentioned as herein:-

In the case on hand, we are concerned with criminal liability on account of dishonour of a cheque. It primarily falls on the drawer, if it is a

Company, then drawer company and is extended to the officers of the company. The normal rule in the cases involving criminal liability is against

vicarious liability. To put it clear, no one is to be held criminally liable for an act of another. This normal rule is, however, subject to exception on

account of specific provision being made in statutes extending liability to others. For example, Section 141 of the N.I. Act is an instance of specific

provision that in case an offence under Section 138 is committed by a company, the criminal liability for dishonour of a cheque will extend to the

officers of the company. As a matter of fact, Section 141 contains conditions which have to be satisfied before the liability can be extended. Inasmuch

as the provision creates a criminal liability, the conditions have to be strictly complied with. In other words, the persons who had nothing to do with the

matter, need not be roped in. A company being a juristic person, all its deeds and functions are the result of acts of others. Therefore, the officers of

the company, who are responsible for the acts done in the name of the company, are sought to be made personally liable for the acts which result in

criminal action being taken against the company. In other words, it makes every person who, at the time the offence was committed, was in-charge

of, and was responsible to the company for the conduct of business of the company, as well as the company, liable for the offence. It is true that the

proviso to sub- section enables certain persons to prove that the offence was committed without their knowledge or that they had exercised all due

diligence to prevent commission of the offence. The liability under Section 141 of the N.I. Act is sought to be fastened vicariously on a person

connected with the company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability.

The officers of the company being a juristic entity are responsible for their acts and performances done in the name of the company i.e, responsible to

the company at the relevant point of time for the conduct of the business of the company. The vicarious liability is an exception to the normal rule in

cases involving criminal liability. Because of incorporation of special provisions contained in Section 141 of the N.I. Act, the Director is held

vicariously liable for the company, who was responsible for the affairs of the company, as well as the conduct of the business of the company. The

proviso appended to Section 141 has made it clear that a person sought to be vicariously liable for the company in the event of cheque having been

dishonoured being issued by the accused company, may be absolved from his liability subject to proof that the cheque was issued without his

knowledge. This is a case where admittedly all the cheques were issued on 15th June, 2018, which was long after acceptance of the resignation,

tendered by the petitioner/Director, meaning thereby neither the petitioner had sufficient knowledge about the issue of the cheque, nor he was

responsible for the affairs and conduct of the business of company at the relevant point of time. In the absence of contrary being established, this

court finds no justifiable reason to differ with the view, given by the Co-ordinate Bench of this Court in connection with CRR No. 3056 of 2018 with

CRAN No.2210 of 2019.

The proceedings in connection with case being CS No.72320 of 2018 now pending before the learned Metropolitan Magistrate, 10th Court, Calcutta,

and CS 73089 of 2018 and CS 72551 of 2018 now pending before the learned Metropolitan Magistrate, 4th Court Calcutta stand quashed as against

the petitioner only (Jujjavarapu Achyuta Rama Rao).

With this observation and direction all the three revisional applications being CRR No. 355 of 2019, CRR No. 356 of 2019 and CRR No. 373 of 2019

stand disposed of.

Urgent certified copy of this order, if applied for, be given to the appearing parties as expeditiously as possible upon compliance with the all necessary

formalities.