Smt. Suja Johnson vs State of Orissa and Another

I. Mahanty, J.—Heard Mr. S.R. Pati learned counsel for the petitioner and Mr. Mohanty, learned counsel for Opposite party No. 2. In this application u/s 482 Cr.P.C. challenge has been made by the petitioner Smt. Suja Johnson to an order dated 9.6.2005 passed by the learned S.D.J.M., Bhubaneswar in I.C.C. No. 1285 of 2005 taking cognizance against her for the offence u/s 138 N.I. Act, inter alia, on the ground that while she was the Director of M/s. Noble Aqua Pvt. Ltd., she was neither the signatory to the cheque issued to the opposite party-complainant nor in any manner was in charge of day-to-day operation of the company.

Learned counsel for the petitioner draws attention of this Court to the complaint petition where the complainant had impleaded M/s. Noble Aqua Pvt. Ltd. as accused No. 1 and also one P.K. Johnson, Managing Director, as accused No. 2 apart from the petitioner Smt. Suja Johnson as accused No. 3. In the said complaint, the facts of the case is stated as follows:

That both the complainant and the accused No. 2, namely, P.K. Johnson are business friends and are known to each other since long.

That the accused No. 2 is the Managing Director of M/s. Noble Aqua (P) Ltd. (Accused No. 1) and due to urgent need of money for the aforesaid company the accused No. 2 had taken a short term friendly loan of Rs. 20,00,000 (Rupees twenty lakhs): only from the complainant.

That towards the repayment of the aforesaid loan the accused No. 2 as the Managing Director of the aforesaid company and for and on behalf of the accused No. 1 and in which the Accused No. 3 is also the Director, had issued a cheque bearing No. 113278 dated. 1.8.2004 for Rs. 7,50,000 and another cheque bearing No. 113279 dated. 2.8.2004 for Rs. 3,00,000 thereby the total cheque amount comes to Rs. 10,50,000 from his A/c. No. 01050040057 of State Hank of India, Commercial Branch, Bhubaneswar-751 001.

The petitioner has also appended the deposition of one Soumya Ranjan Mohanty (Witness No. 1) on whose evidence, cognizance was taken and summonses were issued to the accused persons including the petitioner. The essence of the contentions raised by the petitioner is that the petitioner is merely a director of the company and has no active participation in the business of the company and for the purpose of criminal liability, it is essential that a clear case should be spelled out in the complaint against the person sought to be made liable and merely describing the petitioner as Director in the accused No. 1''s company is not sufficient to satisfy the requirement of Section 141 of N.I. Act. Referring to Section 141 of the N.I. Act, it is contended that the scope of said Section has been dealt with and settled by Hon''ble Supreme Court in the case of S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla and Another, and in particular, paragraph-19 thereof which is extracted hereunder:

To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability u/s 141 of the Act is sought to be fastened vicariously on a person connected with a company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of the Act contains the requirements for making a person liable under the said provision. That respondent falls within parameters of Section 141 has to be spelled out. A complaint has to be, examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141 he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of Section 141. Even a non-director can be liable u/s 141 of the act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what the case which is alleged against him. This will enable him to meet the case at the trial.

The aforesaid judgment has been followed in several cases thereafter and the issue is no longer res Integra. In order to make a Director as an accused in the proceeding it is necessary that the liability u/s 141 of the Act can be presented connecting with the company. It is clear in the present case that apart from the company impleaded as accused No. 1, the Managing Director of the said company has been implicated as accused No. 2 who is the signatory of the cheque dishonoured in the present proceeding. Therefore, this Court has no hesitation in quashing the order of cognizance and issue of summons against the present petitioner Smt. Suja Johnson and to that extent, the order dated 9.6.2005 passed by the learned S.D.J.M., Bhubaneswar in I.C.C. No. 1285 of 2005, insofar as relates to the present petitioner Smt. Suja Johnson is concerned, is quashed. Since the complaint in the present case was filed by the opposite party-complainant in the year 2005 and in the meantime more than 7 years have passed, the trial Court is directed to take up the matter expeditiously and dispose of the same at the earliest, preferably, within a period of four months from the date of receipt of certified copy of this order. Learned counsel for opposite party No. 2 complainant undertakes to file certified copy of this order before the trial Court for necessary compliance.

The CRIMC is allowed.

Urgent certified copy of this order be granted on proper application.