(Criminal Appeal filed under section 378(4) of Cr.P.C., against the Judgment passed by the learned Judicial Magistrate, Sivakasi made in C.C.No.522 of 2002 dated 15.10.2004.)
This Criminal Appeal is directed against the Judgment passed by the learned Judicial Magistrate Sivakasi made in C.C.No.522 of 2002 dated 15.10.2004.
2. The Complainant?s case is briefly as follows:-
P.W.1 Ravindran is the complainant. He was the power of Attorney of M/s. Lajapathy Packers(Complainant company). The deed of power of attorney is Ex.P.1. First accused was a private limited Company. A2 was the Managing Director of the Company and A3 and A4 were the Director of the Company. The above said company produced and sold variety of wooden box materials. There were business dealings between the complainant and the accused company. In that above business dealings, the accused were liable to pay Rs.2,01,778/-. To substantiate the same complainant produced the account ledger, which is marked as Ex.P.2. On request for payment, the accused issued four cheques to settle the sum of Rs.2,01,778/- in favour of M/s.Lajapathy Packers drawn on State Bank of India, Sivakasi.
(ii) One cheque is for Rs.56,273/- bearing number 472998 dated 25.01.2002, another cheque is for Rs.50,000/- bearing No.492997 dated 25.01.2002 and third cheque is for Rs.51,145/- bearing No.472984 dated 25.01.2002 and the 4th cheque is for Rs.44,360/- bearing No.472983 dated 20.01.2002. The above said cheques are Exs.P.3 to 6.
(iii) The cheques were presented to the Tamilnad Mercantile Bank, Sivakasi for collection on 17.07.2002. But, the cheques were dishonoured and the same were returned to the complainant with an intimation "Funds Insufficient". The return memos is Ex.P.7 series. The debit advice is Ex.P.8. So, the complainant sent a registered notice (Ex.P.9) on 22.07.2002 demanding the value of the above four dishonoured cheques. The accused received the notice on 24.07.02, 25.07.02 and 27.07.02 respectively. The postal acknowledgment cards is Ex.P.10 series. Then, the second accused alone sent a reply (Ex.P.11) with false allegations. Rest of the accused did not sent any reply and even they did not prepare to repay the amount. Hence the complaint was instituted against the accused for the offence committed under Section 138 and 142 of Negotiable Instrument Act.
3. Before, the Trial Court, P.Ws.1 was examined and Exs.P.1 to 11 were marked on the side of the prosecution. On completion of the examination of witnesses on the side of the prosecution, the accused were questioned under Section 313 Cr.P.C., as to the incriminating circumstances found in the evidence of the prosecution witnesses and they denied them as false. D.W.1 alone was examined and Exs.D.1 to D.39 were marked on the side of the accused.
4. On consideration of evidence on record, the learned Judicial Magistrate Sivakasi found A1, A3 and A4 accused guilty under Section 138 read with 142 of Negotiable Instrument Act and convicted and sentenced each of the accused to undergo six months simple imprisonment, since third accused represented for 1st accused company, he was directed to undergo the sentence. The trial Court also found the second accused was not guilty under Section 138 read with 142 of Negotiable Instrument Act and acquitted that accused.
5. Challenging the judgment of acquittal of the second accused passed by the learned Judicial Magistrate, Sivakasi, this Appeal has been filed by the Complainant.
6. Point for Determination:
Whether the second respondent committed the offence under Section 138 of Negotiable Instrument Act?
7. The only point for consideration in the appeal is whether the second accused/respondent herein had committed an offence under Section 138 of Negotiable Instrument Act. The first accused M/s.Jai Fire works had dealings with the complainant. A3 and A4 in the trial Court were the Directors of the first accused company and A2 was the Managing Director of the first accused company. The accused had to pay Rs.2,01,778/-. So four cheques were issued.
8. The cheques were presented to the Tamilnad Mercantile Bank, Sivakasi for collection on 17.07.2002. But, the same were dishonoured. So, a notice was issued to the accused and ultimately complaint was instituted by the Power of Attorney against the accused under Section 138 read with 142 of Negotiable Instrument.
9. The trial Court found A1, A3 and A4 were guilty under Sections 138 and 142 of Negotiable Instrument Act and acquitted the second accused from all charges.
10. The second accused is the respondent herein. The learned counsel for the appellant submitted that the second accused/respondent was the Managing Director, who is liable to pay the amount. The claim of the appellant was opposed vehemently by the learned counsel for the respondent. The respondent has taken a stand that the respondent herein had retired from the Partnership on 31.01.2002. His resignation was registered promptly before the authority and so he was not liable to pay the due amount.
11. Learned counsel for the respondent relied on the judgment of this Court in Jahubar Vs. D. Prabakaran and Another reported in (2007( 1 MLJ (Crl)1347) and argued that this revision is not maintainable. It held as follows:
It is well settled that in an appeal against acquittal the High Court is entitled to reappreciate the entire evidence on record but having done so, if it finds that the view taken by the trial Court is a possible reasonable view of the evidence on record, it will not substitute its opinion for that of the trial Court. Only in cases where the High Court finds that the findings recorded are in ignorance of relevant material on record or by taking into consideration evidence, which is not admissible, the High Court may be justified in reversing the order of acquittal.
So following of the above decision, High Court can interfere with the findings of the trial Court only when there is miscarriage of justice or material evidence was overlooked.
12. Admittedly, the respondent was the Managing Director of the first accused company. But, he claimed that he has retired from the partnership from 31.01.2002.
13. Learned counsel for the respondent relied on the judgment of Hon?ble Supreme Court in S.M.S. Pharmaceticals Ltd., Vs. Neeta Bhalla and another reported in (2005) 8 Supreme Court Cases 899). In the above judgment, Hon?ble Supreme Court has held as follows:
Under Section 141 of Negotiable Instrument, what is required is that the persons who are sought to be made criminally liable should be, at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the provision. It is only those persons who were in charge of and responsible for the conduct of business of the company at the time of commission of an offence, who will be liable for criminal action. The liability arises from being in charge of and responsible for the conduct of business of the company at the relevant time when the offence was committed and not on the basis merely holding a designation or office in a company. Conversely, a person not holding any office or designation in a company may be liable if he satisfied the main requirement of being in charge of and responsible for the conduct of business of a company at the relevant time. Liability depends on the role one plays in the affairs of a company and not on designation or status.
14. So it is clear that the person, who are sought to be made criminally liable, should be, at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company.
15. Learned counsel also relied on the judgment of the Hon?ble Supreme Court reported in S.M.S. Pharmaceticals Ltd., Vs. Neeta Bhalla and another (2007) 1 MLJ (Crl) 1379). It held that Sufficient averments should be made in Complaint to show that the person, who is vicariously liable for commission of the offence of the Company, was in charge of and was responsible for the conduct of the business of the Company and requirements laid down in law, must be read conjointly and not disjunctively.
16. In Agritech Hatching and Others V. Valuable Steel India Ltd. reported in (1998(1) MWN (Cr.99), this Court held as follows:
Person guilty of the offence ? who can be ? Person incharge of and responsible to the company for the conduct of the business of the company at the time of commission of offence along can be deemed to be guilty of the offence.
17. It is clear from the above decisions that the persons who are responsible for the conduct of the business of the company, at the time of offence, alone, can be held responsible for the offence.
18. In this case, it was pointed out that in the light of the wording contained in Section 141(1) and (2), it is for the complainant to establish that the persons concerned are in charge of and responsible for the conduct of the business of the Company and that the offence is committed with their knowledge and connivance.
19. It is a settled law, as laid down by the Hon?ble Supreme Court, that there must be a specific averment in the Complaint against the accused persons to the effect that they are in charge of and responsible for the conduct of the business of the company, during the relevant time when the offence has been committed. In other words, the complainant can prosecute the Company as well as the other Directors, only when he is satisfied that the persons, sought to be prosecuted, are in charge of and responsible for the conduct of the business of the Company and also, in spite of the demand of the cheque amount through service of notice, they have not chosen to pay the amount within time. So, it must be shown that the accused was in charge of the company at the relevant time when the offence was committed.
20. A thorough Perusal of complaint in this case, would show that there is no averments to the effect that the second accused was in charge of the company, when the offence was committed. Admittedly, the offence was committed after receipt of notice.
21. P.W.1, in his evidenc, he has admitted that he knew that the respondent herein retired from the first accused company before the date of presentation of cheques. He deposed as follows:
22. So, his evidence would show that the complainant was aware that the accused retired from the partnership even prior to the presentation of the cheque. Learned counsel for the appellant relied on the evidence of P.W.1 and argued that Form-32 was obtained and the same was not proved as per law. No doubt only xerox copy was filed in this case. D.W.1 has also categorically stated that the second respondent retired from the partnership on 31.01.2002. Reply notice and evidence of P.W.1 would show that the accused was not a partner at the time of presentation of cheques. The cheque was dishonoured in the month of July. So, at the time of cheques were presented, the accused was not a partner of first accused.
23. Learned counsel for the respondent relied on the decision of this Court in Criminal Appeal No.228 of 2004 dated 28.03.2007 and argued that even, in other case filed against the appellant herein, this Court held that the accused was not in active Management of first accused. The learned counsel for the respondent is not able to say anything about the judgment in Crl.A.No.228 of 2004 of this Court. So, it is clear that the respondent was not in charge of first accused.
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>24. To strengthen his case, the learned counsel for the respondent relied on the decision in Rajan Kinnerkar Vs. Eric Cordeiro and Another reported in (1994 (2) Crimes 250) and argued that when the cheque was issued after retirement of the Director, he is not liable for the offence under Section 138 of Negotiable Instrument Act. It was held with as follows: Where cheque was issued by a person as Director of the company but ceased to be the Director or in the employment of company by the time cheque was presented and dishonoured. Prima-facie he is not liable for offence under Section 138 of Negotiable Instruments Act. 25. So, the second accused/respondent herein cannot be held responsible for the offence committed by first accused company. 26. On careful consideration, the trial Court has come to a correct conclusion and I find no illegality and infirmity in the findings of trial Court. There is no merit in the Criminal Appeal and I find that there is no reason to interfere with the findings of the trial Court. 27. In the result, the Criminal appeal is dismissed and the judgment passed by the learned Judicial Magistrate Sivakasi made in C.C.No.522 of 2002 dated 15.10.2004 is confirmed. The bail bond, if any, executed by the second accused, shall stand cancelled.