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Sanjeev Malhotra v/s M/S. Manam Fruit Products Private ltd, rep. by its Power of Attorney Agent, P. Hemasundar

    Crl.O.P.Nos.26265 to 26271 of 2009 & M.P.Nos.1,2,3, 1,2,3, 1,2,3, 1,2,3, 1,2,3, 1,2,3 & 1,2,3 of 2009

    Decided On, 08 January 2010

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE S. NAGAMUTHU

    For the Petitioner: P. Ravishankar Rao, Advocate, For the Respondent: Karthikeyan, Advocate



Judgment Text

(PRAYER: s filed under Section 482 Cr.P.C., seeking to quash the records in C.C..Nos.1615 to 1621 of 2009 on the file of the learned Judicial Magistrate No.II, Hosur.)


In all these cases, the prosecution has been launched against the petitioner and six others for offences under Section 138 of Negotiable Instruments Act. The petitioner in all the cases, who happens to be the 7th accused, seeking to quash these cases has come forward with these petitions.


2. Admittedly, the first accused is a company and the complainant is also a company. There was business transaction between these two companies. In discharge of the liability, the first accused-company issued cheques in favour of the complainant- company. Since all the cheques were dishonoured and notices sent were not complied with, prosecution was launched in all these cases.


3. It is the contention of the petitioner that the petitioner resigned from the said company on 02.09.2008 itself. Whereas these cheque transactions pertain to the year 2009. It is further contended that there is no specific averment anywhere in any of the complaints that the petitioner was in any way connected with the company so as to satisfy the requirements of Section 141 of the Negotiable Instruments Act. On this ground, the petitioner seeks to quash all these proceedings.


4. On the contrary, the learned counsel for the respondent would seriously dispute the same. According to him, the resignation of the petitioner from the company as stated by the petitioner is not true. He would further submit that when such a document is disputed, it is not open for this Court to look into the same and to give any adjudication on the said document. He would further submit that there is a specific averment in all the cases to the effect that it was this petitioner/accused No.7, who handed over the cheques to the complainant- company. This, according to the learned counsel, would go to show that the petitioner was involved in the day-to-day affairs of the company and that would satisfy the requirement of Section 141 of the said Act.


5. I have considered the rival submissions and also perused the records carefully.


6. Before moving on to the facts of the case, it is worthwhile to refer to the law on the subject. The Hon'ble Supreme Court in Katta Sujatha VS Fertilizers and Chemicals Travancore Ltd., reported in 2002 7 SCC page 655 has considered the scope of Section 141 of Negotiable Instruments Act. The Hon'ble Supreme Court has held that unless there are specific averments in the complaint itself, the vicarious liability of any person on behalf of the company cannot be presumed and therefore, the complaint cannot be maintained against him. The Hon'ble Supreme Court has further gone to the extent of saying that it would not be sufficient to make a mere averment in the complaint that the individual is responsible for the day-to-day affairs of the company but there should be an averment that he was in charge of the management of the company. In the absence of any one of these averments, according to the Supreme Court, the case is liable to be quashed. Atleast there has to be an averment that the transaction was done with the connivance of the accused as stated in Sub Section 2 of Section 141 of the Act.


7. Applying the above said proposition to the facts of the present case, if the averments in the complaints are perused, admittedly, there is no averment anywhere in the complaints that the petitioner was either in charge of the management of the Company or he was responsible for the day-to-day affairs of the company, nor there is any averment that the transaction was done with the connivance of the petitioner. The contention of the learned counsel for the complainant is that there is averment in the complaint that cheques in question were handed over to the complainant by the accused.


8. In my considered opinion, this averment would not satisfy the requirement of Section 141 of Negotiable Instruments Act, as it is contended by the learned counsel for the complainant. It may be sufficient to hold that the petitioner had some involvement in the day-to-day affairs of the company. But that would not be suffice as held by the Hon'ble Supreme Court. Apart from the said averment, there has been no specific averment that the petitioner was in charge of the management of the company. Surely, that averment is missing in all these cases. Thus, I have no hesitation to hold that Section 141of the said Act is not satisfied and therefore, the complaint as against th

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e present petitioner cannot be maintained at all. Allowing the prosecution to proceed further against the petitioner would amount to abuse of process of Court. 9. In view of all the above, all these petitions are allowed. The cases in C.C. Nos.1615 to 1621 of 2009 on the file of the learned Judicial Magistrate No.II, Hosur are quashed only in so far as the petitioner is concerned. The learned Judicial Magistrate can proceed further with the case in accordance with law as against the other accused.
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