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Vinodkumar & Others v/s M/s. Baheti Automobiles & Others

    Criminal Revision Application (Revn) Nos. 175 of 2017, 114 of 2015, 153 of 2015 with Criminal Appeal (Appeal) No. 380 of 2014

    Decided On, 26 April 2019

    At, In the High Court of Bombay at Nagpur

    By, THE HONOURABLE MR. JUSTICE M.G. GIRATKAR

    For the Applicants: M.G. Sarda, S.V. Sirpurkar, Advocates. For the Respondents: R4, A.C. Dharmadhikari, Advocate, R5, H.D. Dubey, Additional Public Prosecutor.



Judgment Text

1. All the matters are arising out of the judgment and order dated 18th August, 2015 passed by the learned Additional Sessions Judge No.3, Akola in Criminal Appeal No. 120 of 2013 by which the judgment and order dated 29th November, 2013 passed by the learned Judicial Magistrate, First Class, Court No.6, Akola in SCC No. 5113 of 2008 was set aside and remanded the matter to the trial Court for retrial.

2. The complaint case was filed by Vinodkumar Bhagchandji Rathi against M/s. Baheti Automobiles and others alleging that accused No.1/Firm is constituted by its partners namely accused Nos.2 to 4. There was business transaction between the complainant and the accused persons. Whenever the complainant had an amount with him, he used to keep the said amount deposited with accused persons. In the year 2006-07, the complainant had deposited an amount of Rs.22,00,000/- (rupees twenty-two lakhs only) with accused under different cheques of Rs.1,00,000/- (rupees one lakh only) each. Accused agreed to pay the interest on amount of deposit at the rate of 24 per cent per annum. In the year 2006-07, accused repaid entire amount along with interest.

3. In the year 2007-08, the complainant had deposited an amount of Rs.30,00,000/- (rupees thirty lakhs only) with the accused. Accused issued 30 cheques of Rs.1,00,000/- (rupees one lakh only) each in favour of the complainant. Accused agreed to pay the interest at the rate of 24 per cent per annum. The account of complainant was operating under the signature of the father of complainant Bhagchandji Rathi who is holding Power of Attorney for the complainant.

4. Accused No.2 requested the complainant that he would make payment of five cheques of Rs.1,00,000/- (rupees one lakh only) each. Accordingly, complainant returned back those five cheques. Accused made payment along with interest. Insofar as remaining 25 cheques issued by accused are concerned, the same were revalidated from time to time by extending date under the signature and handwriting of accused No.2. When all the 25 cheques were presented to the bank, the cheques were returned with the endorsement from the bank of the accused as, “Payment is stopped by the drawer”. On 29.03.2008, accused made representation to the complainant that he would make payment of Rs.25,00,000/- (rupees twenty-five lakhs only). Therefore, accused issued cheque of Rs.10,00,000/- (rupees ten lakhs only) dated 29.03.2008 and cheque of Rs.15,00,000/- (rupees fifteen lakhs only) dated 31st March, 2008. The complainant presented those cheques to the bank on 24.09.2008 and 25.09.2008 respectively. Both the cheques were dishonored for the reasons “Funds Insufficient”.

5. The complainant issued notice to the accused through his advocate. Though the notices were received by the accused persons, they did not return amount within stipulated period. Complaint case was filed. Process was issued. Pleas of accused were recorded. After evidence, statement under Section 313 of the Code of Criminal Procedure was recorded by the Judicial Magistrate First Class. Learned JMFC convicted accused No.2-Kamalkishor Fulchand Baheti for the offence punishable under Section 138 of the Negotiable Instruments Act and sentenced him to suffer simple imprisonment for the period of one month and to pay a fine of Rs.5,000/-, in default, to further suffer SI for the period of 15 days.

6. Accused No.2 shall pay an amount of Rs.30,00,000/- (rupees thirty lakhs only) within a period of two months from the date of judgment, in default, sentence to suffer simple imprisonment for the period of one month.

7. The said judgment of conviction was challenged in Criminal Appeal No. 120 of 2013. Learned Additional Sessions Judge relying on the judgment of Hon'ble Apex Court in the case of Aneeta Hada .v. Godfather Travels and Tours Private Limited (reported in 2012(5) SCC, 661), quashed and set aside the judgment of conviction and remanded the matter for retrial. Learned Additional Sessions Judge held that accused No.1/Firm is not convicted and, therefore, judgment is illegal.

8. Heard Shri M.G. Sarda, learned Counsel appearing on behalf of the applicant/appellant/Vinodkumar Bhagchandji Rathi in Criminal Revision No. 175 of 2012 and Criminal Appeal No. 380 of 2014 respectively. He has submitted that the judgment of Apex Court in the case of Aneeta Hada .v. Godfather Travels and Tours Private Limited (cited supra), is wrongly interpreted by the Sessions Court and, therefore, prayed to allow the revision and appeal against acquittal. Shri Sarda, learned Counsel for the applicant has submitted that the revisions filed by accused persons against the judgment of Sessions Court in respect of remand are not maintainable because the order of first appellate Court directing retrial after reversal of findings and sentence of trial Court is not an order of acquittal and, therefore, they have no right to ask for leave to file revision. In support of his submission, learned Counsel for the applicant has pointed out the decision of Calcutta High Court in the case of Sm. Binapani Haldar .v. Samsuddin Ahmed and others (reported in AIR 1962 CALCUTTA, 191).

9. It is argued on behalf of the respondents (applicants in Criminal Revision Application Nos.114 of 2015 and 153 of 2015) by Shri S.V. Sirpurkar and Shri A.C. Dharmadhikari, learned Counsel respectively that the learned Additional Sessions Judge has held that the conviction by Judicial Magistrate First Class is not legal and proper and, therefore, there was no propriety for remanding the matter. Shri Dharmadhikari, learned Counsel has submitted that his client i.e. accused No.4 came to be acquitted by JMFC. Therefore, prejudice is likely to be caused to accused No.4 after remand of the matter. It is nothing but retrial of the matter.

10. After hearing both the parties and from the perusal of impugned judgment of Additional Sessions Judge, Akola, it is clear that the Sessions Judge has relied on the judgment of Aneeta Hada .v. Godfather Travels and Tours Private Limited (cited supra) and come to the conclusion that accused No.1/Firm is not convicted and, therefore, judgment of JMFC is illegal. It appears that the first appellate Court has wrongly interpreted the judgment of Apex Court in the case of Aneeta Hada .v. Godfather Travels and Tours Private Limited (cited supra). Hon'ble Apex Court has held that, “to fix the criminal liability for dishonour of cheque drawn by company, mandatory requirement of impleading company as one of the accused Director or authorised signatory of cheque, prosecution against, without arraigning of company as accused, held, not maintainable. Only exception would be in a case applying principle of lex non cogit ad impossibilia i.e. if for some legal snag, company cannot be proceeded against without obtaining sanction of a court of law or other authority, trial as against the other accused may be proceeded against if ingredients of Section 138 as also Section 141 are otherwise fulfilled. In such an event, clarified that it would not be a case where company had not been made an accused but would be one where company cannot be proceeded against due to existence of a legal bar. A distinction must be borne in mind between cases where a company had not been made an accused and the one where despite making it an accused it cannot be proceeded against because of a legal bar.”

11. The Hon'ble Apex Court in the case of Aneeta Hada .v. Godfather Travels and Tours Private Limited (cited supra), in paras 49 and 50, observed as under:

“49. On a reading of both the paragraphs from Anil Hada case, it is evincible that the twoJudge Bench expressed the view that the actual offence should have been committed by the company and then alone the other two categories of persons can also become liable for the offence and, thereafter, proceeded to state that if the company is not prosecuted due to legal snag or otherwise, the prosecuted person cannot, on that score alone, escape from the penal liability created through the legal fiction and this is envisaged in Section 141 of the Act. If both the paragraphs are appreciated in a studied manner, it can safely be stated that the conclusions have been arrived at regard being had to the obtaining factual matrix therein.

50. However, it is noticeable that the Bench thereafter referred to the dictum in Sheoratan Agarwal and eventually held as follows : (Anil Hada case SCC p.10, para 21) “21. We, therefore, hold that even if the prosecution proceedings against the company were not taken or could not be continued, it is no bar for proceeding against the other persons falling within the purview of subsections (1) and (2) of Section 141 of the Act.””

12. From the careful reading of the judgment of Hon'ble Apex Court in the case of Aneeta Hada .v. Godfather Travels and Tours Private Limited (cited supra), it is clear that the company/firm should be made an accused. In the complaint filed by the complainant before the JMFC, the company was made an accused. Not only that, the learned JMFC has observed in para 51 of the judgment that, “Complainant proved that, offence is committed by accused No.1/Firm however, failed to prove that, accused Nos.3 and 4 are vicariously liable for the act of accused No.1/Firm. Therefore, it is clear that accused No.2 issued cheques Exh.146 and Exh.147 on behalf of accused No.1 towards discharged of legal debt and liability. Hence, I held accused No.2 guilty of offence punishable under Section 138 of Negotiable Instruments Act.”

13. From the reading of judgment of JMFC, it is clear that accused No.1/Firm not only made party but it is also proved by the complainant that accused No.1/Firm has committed the offence punishable under Section 138 of the Negotiable Instruments Act. Accused No.2 being the Managing Director, who issued the cheque, was held responsible. Therefore, impugned judgment of Additional Sessions Judge, Akola in Criminal Appeal No. 120 of 2013 is liable to be quashed and set aside.

14. The complainant has challenged the acquittal of accused Nos.3 and 4 in Criminal Appeal No. 380 of 2014. Shri A.C. Dharmadhikari, learned Counsel has pointed out the judgment of Apex Court in the case of S.M.S. Pharmaceuticals Ltd. .v. Neeta Bhalla and another (reported in 2005(8) SCC, 89). It is observed by the Hon'ble Apex Court as under :

“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 under Section 141 of the NI 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. Under Section 141 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 on account of conduct, act or omission on the part of a person and not merely on account of holding an office or a position is a company.”

15. In the present case, accused Nos.3 and 4 were not the incharge and responsible for the conduct and business of the company. Accused No.2 issued cheques in favour of the complainant. He was the responsible persons for the act of accused No.1/Firm. He was managing the affairs of the firm/accused No.1. Therefore, learned JMFC has rightly convicted accused No.2 and acquitted accused Nos.3 and 4. Hence, the judgment of JMFC acquitting accused Nos.3 and 4 is perfectly legal and correct. Therefore, Criminal Appeal No. 380 of 2014 is liable to be dismissed.

16. Shri S.V. Sirpurkar, learned Counsel for the applicant in Criminal Revision Application No. 114 of 2015 has submitted that the learned Additional Sessions Judge has come to the conclusion that the judgment passed by JMFC is illegal and, therefore, quashed and set aside. He has further submitted that there was no necessity for the first appellate Court to remand the matter for retrial. In support of his submission, he has pointed out the judgment of Apex Court in the case of Mohd. Hussain alias Julfikar Ali .v. State (Govt. of NCT), Delhi (reported in AIR 2012 SC, 3860), in which the Apex Court has held that, “The appellate Court hearing a criminal appeal from a judgment of conviction has power to order the retrial of the accused under Section 386 of the Code. Though such power exists, it should not be exercised in a routine manner ...”

17. Shri A.C. Dharmadhikari, learned Counsel for respondent No.4 submits that remand of the matter against accused No.4 amounts to retrial. He is already acquitted by the JMFC and, therefore, impugned judgment of Additional Sessions Judge is liable to be quashed and set aside.

18. I have already come to the conclusion that the judgment of JMFC is perfectly legal and correct. First appellate Court has wrongly interpreted the judgment in the case of Aneeta Hada .v. Godfather Travels and Tours Private Limited (cited supra). Learned Additional Sessions Judge has recorded his findings that accused No.1/Firm is not convicted and, therefore, judgment of JMFC is illegal. The ratio laid down by the Hon'ble Apex Court in the case of Aneeta Hada .v. Godfather Travels and Tours Private Limited (cited supra) is that the firm/company should be an accused in the case under Section 138 of the Negotiable Instruments Act and the partners/directors are vicariously liable for the act of firm/company. The judgment in the case of Aneeta Hada .v. Godfather Travels and Tours Private Limited (cited supra) nowhere says that the firm should be convicted and sentenced to jail. The complainant has made firm as accused No.1 in the complaint itself. Learned JMFC has recorded his findings in para 51 that the complainant has proved that offence is committed by accused No.1/Firm. However, failed to pro

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ve that accused Nos.3 and 4 are vicariously liable for the act of accused No.1/Firm because accused Nos.3 and 4 were not the acting partners of the firm. Therefore, it is clear that accused No.2 issued cheques (Exhs.146 and 147) on behalf of accused No.1/Firm towards discharge of legal debt and liability. Therefore, accused No.2 was held guilty of the offence punishable under Section 138 of the Negotiable Instruments Act. Accused No.2 was managing the affairs of accused No.1/Firm. He himself has signed the cheques (Exhs.146 and 147). The said cheques were not encashed. Therefore, accused No.2, who was managing the affairs of the firm, is vicariously held liable. In view of the judgment of Apex Court in the case of S.M.S. Pharmaceuticals Ltd. .v. Neeta Bhalla and another (cited supra), all accused cannot be convicted. The accused who was managing the affairs of the firm is responsible for the act of the firm. The judgment of learned JMFC is perfectly legal and correct. Hence, the following order. ORDER Criminal Revision Application No. 175 of 2017 is allowed. The impugned judgment of Additional Sessions Judge, Court No.3, Akola in Criminal Appeal No. 120 of 2013, dated 18th August, 2015 is hereby quashed and set aside and judgment dated 29th November, 2013 passed by learned Judicial Magistrate, First Class, Court No.6, Akola in SCC No. 5113 of 2008 is hereby restored. Criminal Appeal No. 380 of 2014 is hereby dismissed. Criminal Revision Application Nos.114 of 2015 and 153 of 2015 are hereby dismissed. The respective parties to bear their own costs.
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