High Court · 2009

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 14.07.2009CORAM:THE HONOURABLE MR. JUSTICE P.R.SHIVAKUMARCRL.O.P.No.10973 of 2009J. Dhanalakshmi ..Petitioner/Accused Vs.M/s.The South Indian Bank Limited,Raja Street Branch,Coimbatore – 641 001Rep.by its present Asst.Manager,Sri. Paulson O.P.S/o. Paulose ..Respondent/Complainant PRAYER: Criminal Original Petition filed under Section 482 Cr.P.C.to call for records in CC.395/2005 on the file of the JudicialMagistrate V, Coimbatore and quash the same. For Petitioner : S.N. Amarnath O R D E RThe submissions made by Mr.S.N.Amarnath, learned counsel forthe petitioner were heard. The petition and the papers producedalong with the petition in the form of typed set of papers werealso perused. 2. The petitioner, as correspondent of Sri Jayendra SaraswathyVidhyalaya Matriculation Higher Secondary School, Coimbatore,Aerodrome Road, Siganallur, Coimbatore – 641 005, had issued twocheques in favour of the respondent herein in discharge of adebt/liability. The said cheques, when presented for payment, weredishonoured for insufficiency of funds and there was also noarrangement made between the drawer of the cheque and the bankerfor payment of the amount covered by the cheques.3. According to the complainant, the petitioner is liable onlyas a Guarantor as it was agreed to deduct the installments for thepersonal loans given to the staff of the said institution. In factafter the institution of a previous case in CC No.143/2004 againstthe petitioner based on another dishonoured cheque, the petitionereffected a settlement with the petitioner and issued two chequesfor a total amount of Rs.39,00,000/- (Rs.20,00,000 + Rs.19,00,000)towards the full and final settlement of the amount due on accountof loans sanctioned to the staff members of the above saidinstitution. Both cheques, when presented, were returned unpaid forwant of funds in the account on which the cheques were drawn. https://hcservices.ecourts.gov.in/hcservices/

4. Following the procedure prescribed in section 138 of theNegotiable Instruments Act the respondent issued issuing astatutory notice within the time stipulated therein. But thedrawer of the cheques failed to comply with the demand made in thestatutory notice within the time allowed by the statute after thereceipt of such notice. Therefore the respondent has preferred thecomplaint under Section 200 Cr.PC for the offence under section 138of the Negotiable Instruments Act, 1881 against the petitionerherein.5. The petitioner has come forward with the present petitionunder section 482 Cr.PC seeking an order quashing the said crimenumber initiated on private complaint on two grounds. They are:i) The person who preferred the complaint onbehalf of the respondent has not been properlyauthorised by the respondent.ii) The petitioner being a correspondent of theinstitution, who signed the cheque on behalf of theinstitution, cannot be prosecuted without prosecutingthe institution along with the petitioner. 6. Both the grounds are untenable and unsustainable. Theposition has been made clear in several judgements, which thiscourt feels unnecessary to cite. An artificial person conferredjuristic personality cannot act itself and it should have a naturalperson (human being) to represent it and to sign the documents onits behalf. As such the officers of such juristic persons canprefer the complaint on behalf of such juristic person. If at allthere is any defect at the institution of the criminal proceedings,the same shall be only an irregularity which shall not go to theroot of the case and such irregularity can be rectifiedsubsequently. Even a complaint preferred on behalf of a juristicperson (the company) by a person who has not been duly authorised,or in case authorisation having some defects, the same can beratified and rectified subsequently by such company. Therefore, forsuch defects which do not go to the root of the problem, thecomplaint cannot be quashed at the inception itself. Hence, thiscourt comes to the conclusion that the first contention raised bythe petitioner deserves to be rejected as untenable.7. The second contention is also untenable. Section 141 of thenegotiable Instruments Act simply says who are all deemed to be thepersons committing the offence under section 138 in case theoffence under section 138 of the Negotiable Instruments Act, 1881is committed by the Company, the section says if the personcommitting an offence under section 138 is a Company, every person,who at the time the offence was committed was in charge of and wasresponsible to the company for the conduct of the business of thecompany, as well as the company, shall be deemed to be guilty ofthe offence and shall be liable to be proceeded against andpunished accordingly. What the legislature wanted to mean is that https://hcservices.ecourts.gov.in/hcservices/ the company and every person-incharge and was responsible for theconduct of the business of the company are deemed to be co-offenders. It does not deal with the question as to whether aperson in-charge of and responsible to the company for the conductof its business can be or cannot be prosecuted for the said offencewithout prosecuting the company itself. It is trite law that in acriminal prosecution for an offence, it is not necessary toprosecute the co-offenders in one and the same trial. An offenderwho has committed an offence cannot contend that he could not beprosecuted without arraying the co-offenders as co-accused in thecase in which he is being prosecuted. If the same principle isapplied to the facts of the case on hand, it shall be clear thatthere is no substance in the second contention raised by thelearned counsel for the petitioner. 8. Furthermore, in a number of cases, the highest court in thecountry has held that a director/partner of a company/firm, whenprosecuted for an offence under section 138 Negotiable InstrumentsAct for the dishonour of a cheque issued on behalf of thecompany/firm, cannot challenge the prosecution on the ground thatthe company/firm has not been arrayed as accused along with him.This position was elaborately discussed and held so in Anil Hada vsIndian Acrylic Limited reported in (2000) 1 SCC 1. In Para 13 ofthe judgment cited supra, it has been made crystal clear by thefollowing observations:- "If the offence was committed by a company it canbe punished only if the company is prosecuted. Butinstead of prosecuting the company, if a payee opts toprosecute only the persons falling within the secondor third category the payee can succeed in the caseonly if he succeeds in showing that the offence wasactually committed by the company. In such aprosecution the accused can show that the company hasnot committed the offence, though such company is notmade accused, and hence the prosecuted accused is notliable to be punished. The provisions do not contain acondition that prosecution of the company is sine quanon for prosecution of the other persons who fallwithin the second and the third categories mentionedabove. No doubt a finding that the offence wascommitted by the company is sine qua non forconvicting those other persons. But if a company isnot prosecuted due to any legal snag or otherwise, theother prosecuted persons cannot, on that score alone,escape from the penal liability created through thelegal fiction envisaged in Section 141 of the Act."9. The said view expressed by the Hon'ble Supreme Court inAnil Hada vs. Indian Acrylic Limited was followed by another benchof the Hon'ble Supreme Court in R.Rajagopal vs. S.S.Venkat reportedin (2001) 10 SCC 91. In the said case when a partner of apartnership firm was sought to be prosecuted for an offencepunishable under Section 138 of the Negotiable Instruments Act, https://hcservices.ecourts.gov.in/hcservices/ 1881 without prosecuting the partnership firm on whose behalf thecheque in question had been issued, the High Court quashed thecomplaint. When the said order of the High Court was challengedbefore the Hon'ble Supreme Court, setting aside the order of theHigh Court, the Hon'ble Supreme Court observed that the stand ofthe said High Court that a director/partner cannot be prosecutedwithout prosecuting the company/firm on whose behalf the cheque wasissued as a co-accused could not be sustained in view of thepronouncement of law in Anil Hada vs. Indian Acrylic Limited citedsupra.10. As the ground on which the complaint against thepetitioner is sought to be quashed in the case on hand has beencovered by the above said judgments of the Hon'ble Supreme Court,the relief sought for in this petition has got to be rejected. Thecontention raised by the learned counsel for the petitioner thatthe prosecution of the correspondent of the schoola, when thecheque in question had been issued on behalf of the school, withoutprosecuting the school is not maintainable, cannot be sustained inview of the emphatic pronouncement of law in this regard by theHon'ble Supreme Court in the judgments cited supra. Despite thefact that the attention of the learned counsel for the petitionerwas drawn to the above said authoritative pronouncements of theHon'ble Supreme Court laying down the law in this regard, thelearned counsel for the petitioner went to the extent of statingthat those judgments need not be relied on as the language employedby the legislature in coining the provision would, according tohim, indicate that the partner/director could not be prosecutedwithout prosecuting the firm/company on whose behalf the cheque inquestion was issued. The learned counsel pointed out the languageused in the section, which reads as follows:-(1) If the person committing an offence underSection 138 is a company, every person who, at thetime the offence was committed, was incharge of, andwas responsible to the company for the conduct of thebusiness of the company, as well as the company, shallbe deemed to be guilty of the offence and shall beliable to be proceeded against and publishedaccordingly:11. Pointing out that as per the said provision, the personresponsible for the conduct of the business of the company as wellas the company, shall be deemed to be guilty of the offence, thelearned counsel for the petitioner submitted that the term 'as wellas' would indicate the conjunction "and" and hence the prosecutionof the director/partner without prosecuting the company/firm wouldnot be maintainable. The language used therein will indicate thatthe company as well as the person responsible for the conduct ofits business are made joint offenders. But that doesn't mean thatsome of the offenders alone cannot be prosecuted withoutprosecuting the other joint offenders. The very same language usedin the provision was considered and interpreted as indicated supraby the Hon'ble Supreme Court. In view of the law laid down by the https://hcservices.ecourts.gov.in/hcservices/ Hon'ble Supreme Court in Anil Hada vs. Indian Acrylic Limited'scase which was followed in R.Rajagopal vs. S.S.Venkat's case andsubsequent cases, the contention raised by the learned counsel forthe petitioner is liable to be rejected as untenable andaccordingly the same is rejected.12. For all the reasons stated above, this petition isdismissed.asrSd/Asst.Registrar/true copy/Sub Asst.RegistrarTo1. The Judicial Magistrate No.V, Coimbatore.2. -do- through the Chief Judicial Magistrate, Coimbatore.+1 cc to Mr. S.N. Amarnath, Advocate, SR.No.31548.Crl.O.P.No.10973 of 2009vsv(co)ar/29.10.2009.