Talavadi Rock and Minerals Products Ltd. vs Alwarpet Finance and Funds Ltd.

A. Ramamurthi, J.—The petitioner who is one of the accused in C. C. No. 3141 of 1996 on the file of the XVIII Metropolitan Magistrate,

Saidapet, has preferred the revision aggrieved against the order passed in Crl. M.P. No. 722 of 1999 dated May 19, 1999.

The case in brief is as follows : The respondent filed a complaint against the company as well as managing director as accused Nos. 1 and 2.

The cheque was signed by the second accused on October 23, 1995, and it was presented on April 10, 1996, and the same was returned

dishonoured"". The complainant issued a notice and even after the expiry of 15 days, the amount was not paid and, hence the complaint was laid.

The petitioner met with an accident on August 6, 1995, and he was hospitalised. He was not in a position to move out and was confined to bed.

He had also resigned from the first accused-company even on November 23, 1995. The first accused-company has a whole-time director, viz.,

Aravind Chung, who was appointed in 1994 for a period of five years. The petitioner filed a petition for discharge and the same was dismissed by

the trial court. The complaint filed against him is liable to be dismissed on the ground that u/s 141(1) of the Negotiable Instruments Act, 1881, only

the person, who at the time the offence was committed, was in charge of and was responsible to the company for the conduct of the business of

the company shall be deemed to be guilty of the offence. He was not in charge of or responsible for the conduct of the business on the date of the

offence and, as such, the discharge application ought to have been allowed.

Heard learned counsel for the petitioner.

The petitioner is the second accused in C. C. No. 3141 of 1996 on the file of the XVIII Metropolitan Magistrate, Saidapet. The first accused is

the company represented by the managing director, the second accused herein. The major contention put forward by learned counsel for the

second accused is that he had resigned from the company even on November 23, 1995, but the cheque was presented for encashment on April

10, 1996. After dishonour of the cheque, the notice was issued on April 17,1996. The offence is deemed to have been committed only on May 3,

1996, and on these days, the petitioner was not either the director or managing director of the company and as such, he is not liable for the

offence. Learned counsel further relied upon Section 141(1) of the Negotiable Instruments Act and contended that only the person, who at the

time the offence was committed was in charge of and was responsible to the company for the conduct of the business of the company shall be

deemed to be guilty of the offence. Now, the petitioner was not in charge of the company when the cause of action arose to file the complaint and

as such, he has to be discharged.

The learned magistrate dismissed the application giving valid reasons. It is necessary to state that the cheque is dated October 23, 1995, and on

the said date, the petitioner was the managing director. Only on November 23, 1995, he ceased to be a director of the company. On July 25,

1995, also the petitioner had executed the guarantee. The petitioner being a signatory to the cheque cannot get away from a case before the full-

fledged trial. The question whether the petitioner was in charge of the day-to-day affairs of the company is a matter to be considered only at the

time of trial. The petitioner having executed a cheque in favour of the respondent and the cheque having been dishonoured on presentation, now it

is not open to the petitioner to escape from the case on the ground that when the cause of action arose, he was not in charge of the company. If the

contention of the petitioner is accepted, then it will lead to dangerous consequences. Some person will give a cheque at the relevant point of time

and after some period, he may either retire or resign from the partnership and ultimately, claim that he has nothing to do with the company when the

cause of action arose to file the complaint. Section 141 of the Negotiable Instruments Act can be made applicable only in a case where all the

partners of the company are made parties in the criminal complaint, then alone the person, who was in charge of, can be held liable and so far as

others are concerned, they can be discharged. Now, Section 141 of the Negotiable Instruments Act will not come to the rescue of the petitioner

and as such, I am of the view that the petitioner being a signatory to the cheque, cannot now get away from the case based upon Section 141 of

the Negotiable Instruments Act.

For the reasons stated above, I am of the view that the revision petition is devoid of any merit and it is dismissed. It is open to the petitioner to

agitate the very same points before the trial court and the trial court is directed to complete the trial within three months from the date of receipt of

a copy of this order uninfluenced by any of the observations made herein. Consequently, Crl. M.Ps. Nos. 5173 and 5174 of 1999 are also

dismissed.