w w w . L a w y e r S e r v i c e s . i n



Nishantraj Nahata & Another v/s I.T.C. Bhadrachalam Finance & Investments Ltd. & Another

    CRIMINAL APPLN. NO.3121 OF 1997 ALONGWITH CRIMINAL APPLN. NOS.3122/97 & 55/98

    Decided On, 15 December 1998

    At, High Court of Judicature at Bombay

    By, THE HON'BLE MR. JUSTICE D.G. DESHPANDE

    Mr.S.V.Marwadi, Advocate for the Applicants. Mr.V.V.Vashi, Adv. for the Resp. No.1 Mr.D.S.Mhaispurkar, APP for the State.



Judgment Text

ORAL JUDGMENT


Heard Mr. Marwadi for the petitioners and Mr.Vashi for the respondents.

2.Both the applications involve common question and hence they were heard together and are being disposed off by this common order. The applications have been filed by the Directors of the accused company for quashing process under Section 138 of the Negotiable Instruments Act. Complaint under Section 138 were filed by the respondents before the Metropolitan Magistrate, 23rd Court, Esplanade, Bombay, in Criminal Application No.3121 of 1997 and before the Metropolitan Magistrate, 18th court, Girgaon, Bombay in Criminal Application No.3122 of 1997. After recording the verification statements and perusing the documents, process was ordered to be issued by the Magistrate, which is challenged in these applications.

3.It was contended by Mr. Marwadi that the petitioners Nishantraj Nahata and Mr.M.G. Pradhan in Application No.3121 of 1997 and also the five petitioners in application No.1322 of 1997 were not liable to be prosecuted, before Nishantraj Nahata was appointed as Additional Director being the son of the Managing Director and M.G.Pradhan was appointed as Director for seeking professional advice, he was retired as an Executive of the State Bank of India so also the petitioners in Application No.3122 of 1997 were all provisional Directors and having no concern with day to day affairs of the company. He pointed out that the petitioners were entitled for discharge. Further according to him on the date of the issue of the cheque these Directors have resigned. Directors M.G. Pradhan had resigned so also Ashok.K. Nahata, S.S.Kasture and Mrs.Nahata.

4.On the other hand it was contended by Mr.Vashi that in the complaint as well as in the verification statement, the complainant had specifically alleged that the accused i.e petitioners were in charge and responsible for the business of the accused No.1 company i.e Mrinal Dyeing & Manufacturing Company Limited and the same statement was made by the complainant on oath wherein his verification statement was recorded by the court and this is according to Mr.Vashi was sufficient to proceed against the accused. Mr.Vashi placed reliance on a judgment reported in 87 (3) SCC 684 U.P. Pollution Control Board vs. Messrs. Modi Distillery and others in support of his contention that Section 47 of Water (Prevention and Control of Pollution) Act, 1974 is similar and identical to Section 141 of the Negotiable Instruments Act and the proviso to section 47 of the Water (Prevention and Control of Pollution) Act, 1974 which is also identical to the proviso to section 141 places the burden of proof to claim exception under the proviso on the accused and since this can be done by the accused only at the time of the trial, there was no case for allowing the petition for discharge of the accused.

6.In the aforesaid case before the Supreme Court the Respondent M/s. Modi Distillery and others which included its Directors did not inspite of repeated letters by the Pollution Control Board disclosed the names of the Managing Directors, Directors and other persons responsible for the conduct of the company, therefore the prosecution was launched against M/s. Modi Distillery i.e Industrial unit and not against M/s. Modi Industries Limited, the Supreme Court held that M/s. Modi Industries Limited were responsible for this state of affairs because they had not disclosed the names of the Board of Directors and others who were responsible for day today management of the company. So far as non-joinder of Modi Industries Limited the Supreme Court held that the complainant board would over come this defect by applying before the Magistrate to make a formal amendment so as to make the controlling company of the Industrial unit figure as the concerned accused in the complaint. Supreme Court also observed that the industrial unit could be substituted by joining M/s. Modi Industries Ltd. Further it was held that persons claiming exception under proviso to Section 47 were required to bear the burden of proving that the offence was committed without their knowledge or that they had exercised all due diligent to prevent the commission of such offence. I had already observed that section 47 of the Water (Prevention and Control of Pollution) Act, 1974 (referred to above) and Section 141 sub section (1) with proviso are exactly identical which means that the burden of proving the defence coming under proviso to section 141 lies on the accused and this they can do only at the time of the trial. So far as the requirement of Section 141 is concerned the complainant have made specific allegations that the Directors i.e accused are in charge of and are responsible for the business of accused No.1 company and actively associated with accused No.1. This statement is made on oath by the complainant when the verification was done by the Magistrate. Mr.Marvadi has pointed out from para 2 of the complaint that the complainant has asserted " As such they are deemed to be guilty of offences committed .....". According to Mr. Marvadi the use of the word "as such" shows that the complainant has no personal knowledge as to whether the Directors are responsible for the business of the company and hence according to him the accused are entitled for discharge. It is true that if the complainant had merely impleaded the Directors only because they were Directors by using the word "as such" then the matter would have been different. However, the aforesaid sentence cannot be isolated and separated from the specific averments and allegations made by the complainant in the said para that the Direc

Please Login To View The Full Judgment!

tors are in charge of and are responsible for the business of the accused No.1 company. Further, whether the liability of the Directors arose on the date of issuance of cheque or it ceases on their resignation is a question of fact which can only be gone into by the trial court. Therefore, relying upon the aforesaid judgment cited by Mr.Vashi, the applications requires to be dismissed. Hence, the order: ORDER Both the Applications dismissed. Rule discharged in both the applications. Stay, if any, vacated. Parties to appear on 15.1.1999 before the trial court either personally or through advocate.
O R