M. Inbarajan and another vs Baladhandapani

A. Raman, J.—Accused 2 and 3 in C.C. No.931 of 1996 pending on the file of the Judicial Magistrate No.II, Madurai, are the petitioners.

They have filed this petition preying that the proceedings in C.C. No.93I of 1996 be quashed as regards the petitioners.

The respondent filed a complaint against the petitioners and another u/s 138 and 141 of Cr.P.C.

The complaint was taken on file by the learned Judicial Magistrate, Madurai, who issued processes to the accused. Hence the accused 2 and 3

have come forward with this petition u/s 482 of Cr.P.C.

The case of the complainant is that the 3rd accused persuaded him to buy shares i.e. time shares in the company known as Ozonest Hills Resort

Private Limited. Accordingly, the complainant paid a sum of Rs. 36,000 to the 2nd accused who was their Managing Director and got receipt. A

time share and an agreement was also entered into. In paragraph 3 of the complaint it is stated that the 1st accused thereafter became the

Managing Director of the said Company and that the complainant has been asking the first accused about the construction of cottages, and the first

accused has been giving evasive replies, and thereafter the complainant insisted upon refund of the amount and accordingly the first accused in

pursuance of the request of the petitioner issued, a cheque to him for a sum of Rs. 54,000 drawn on Indian Bank, Virudu Nagar. The further

allegation is that when the cheque was presented for collection, it was returned on the ground of insufficiency of funds, and the first accused

requested the complainant to present the cheque again on a later date, and accordingly, he presented the cheque on 22.1.1996 and the same was

again returned on the ground of insufficiency of funds. Thus from the allegations made in the complaint, what we find is that the 3rd accused was

only a salesman, who persuaded the complainant to buy time share. At the time when the time share was purchased and the agreement was

entered into between, the second accused was the Managing Director of the Company. Subsequently, the first accused became the Managing

Director and the first accused in discharge of the liability issued a cheque towards the same and the same was dishonoured.

In such circumstances, it has to be seen whether the complaint can be maintained against the petitioners herein. Section 141 of Negotiable

Instruments Act relates to offences committed by companies. According to section 141, every person, who at the time of the offence committed

was in charge shall be responsible for conduct of the business of the company as well as the company shall be deemed to be guilty of the offence.

Here from the very allegation made, we find that the 3rd accused was only a salesman and was not in charge of the company nor was

responsible to the company for conduct of the business. On the date of issuance of the cheque, the 2nd accused was not the Managing Director of

the Company. It is also not stated anywhere in the complaint that the 2nd accused continued to be Director of the Company or was in active

management of the company. The allegations are only to the effect that the cheque was issued by the first accused as the Managing Director in

discharge of the liability due to the complainant and the said cheque was returned and the cheque was again re-presented on the assurance of the

first accused and the same was again returned ''dishonoured''. There is no scope for invoking the principle of section 109 of I.P.C. in respect of

offence u/s 138 of Negotiable Instruments Act. Even then allegations to that effect are not made in the complaint.

In the complaint, it is not alleged that the accused 2 and 3 continued to be in service of the company and it is not stated that they were in any

manner engaged in the administration and management of the company. On the other hand, it is stated in para 4 of the complaint that the 2nd

accused is the person, who received the full amount for the time share at the company hill resort at Kodaikanal and for the said amount received by

the 2nd accused on behalf of the company he has issued proper receipts for the same. Even according to the complaint, receipts have been issued

and he has executed an agreement in favour of the company. It is also stated that the first accused, who became the Managing Director of the

company was approached by him a number of times about the progress of construction and that the first accused gave evasive replies .Therefore,

the complainant insisted upon the refund of the amount and that the 1st accused in discharge of his liability due to the complainant issued a cheque

and the same was returned ''dishonoured''. Therefore, there is nothing in the complaint, which can be taken as basis to rope-in the 2nd accused.

The allegation against the 3rd accused that he is the person, who abetted the complainant to become time share holder. There is no scope for

abatement of the offence u/s 138 of Negotiable Instruments Act. The question of abetting does not arise. It is not an offence under the Indian Penal

Code. But it is made an offence under the amendment made to the Negotiable Instruments Act. It does not make mention of any abetting nor

proposes to make persons abetting liable for the offence. Therefore, as regards, accused 2 and 3, who are the petitioners herein, it has to be stated

that there is absolutely no basis at all to proceed against them. Of course, the learned counsel for the petitioners has also produced extracts from

the Registrar of companies to the effect that as on 15.7.1994, the 2nd accused has resigned from service and that on 9.5.1994, the 3rd accused

was relieved from service of the company.

Hence, in such circumstances, I am to hold that this complaint as against the accused 2 and 3 is not at all maintainable and therefore, it is liable

to be quashed.

In the result, this petition is allowed and the proceedings as against these two petitioners, who are arrayed as accused 2 and 3 in C.C. No.931

of 1996 on the file of the learned Judicial Magistrate No.II, Madurai shall stand quashed, as regards and as against the two petitioners viz.,

accused 2 and 3 alone.