ORDER
1. Both these applications i.e. Crl.O.P.Nos.9298 and 9304 of 1998 are being disposed of in this common order as the issues in both these petitions are same.
2. The petitioners are accused in a private complaint filed by the respondent for the offences under Sections 138 and 142 of the Negotiable Instruments Act. These proceedings are sought to be quashed in these petitions filled by the petitioners on the ground that the petitioners are merely Directors of the company on whose behalf the cheque in question was issued and they do not take part in the running of the company and as such, they are not in-charge and responsible for the conduct of the business of the company and the mere mentioning that the petitioners were in-charge and responsible for the conduct of the business of the company would not be sufficient to make them liable for the offences alleged, in the absence of anything more set out to substantiate the same.
3. Mr. K. Ashokan, the learned senior counsel appearing for the petitioners, would cite several authorities to show that there must be some particulars in the complaint to show that the petitioners are in-charge and responsible for the affairs of the company and in the absence of any material for the same the proceedings are liable to be quashed. The authorities are as follows:
(1) M/s. Saifee Golden Jubilee Rolling Mills v. State By Inspector of Police, 1989 L.W. (Crl.) 227: (2) P. Jeyanthi v. State rep. by Sub-Inspector of Police, 1990 L.W. (Cri.) 398; (3) Alfred Borg Co., India (P) Ltd. v. Antox India (P) Ltd. 1992 L.W. (Cri.) 120; (4) Mr.Col.R.S.Agarwal v. M/s. Ashok Leyland Ltd. 1998 (1) L.W. (Cri.) 24; (5) M/s. Pepsi Foods Ltd. v. Spl. Judl. Magistrate and others, 1998 (1) L.W. (Cri.) 72.
4. Mr. V. Ramakrishnan, the learned counsel for the respondent, would also cite some authorities to show that the averments that the petitioners/accused are in-charge of the affairs of the company are sufficient for the Magistrate to take cognizance and only during the course of trial, the complainant will be able to establish the truth of the said averments mentioned in the complaint and as such, the proceedings in these complaints are not liable to be quashed. The authorities are these:-
(1) Delhi Municipality v. Purshotam Dass, ; (2) Natesha Singh and others v. M/s. Klen and Marshalls Manufacturers and Exporters Pvt. Ltd. 2000 (1) MWN (Cr.) DCC 15 Mad.; (3) M/s. Shanthi Vihar Hotels Ltd. v. P.F. Inspector, Madras, 1991(2) MWN (Cr.) 247; (4) Mrs. Manju Podar v. Ashwani Kumar, 86 Com. Cases 631 P & H; (5) Bharat Kumar Modi v. M/s. Pennar Peterson Securities Ltd., 1999 Crl.L.J. 3803 A.P.; (6) M/s. Talavadi Rock and Minerals Products Ltd. rep. by its M.D. G.S.Srikantan, Chennai-18 v. M/s. Alwarpet Finance and Funds Ltd. rep. by A.Naray-
anan, 1999 (2) MWN (Cr.) 120 Mad. (7) N. Doraisamy v. Archana Enterprises, 97 Com. Cases 129 Mad.; (8) Habibunnisa Akthar v. S And S Industries, 83 Com. Cases 593 Mad.; (9) Krishna Murarj. Poddar and another v. State of Maharashtra and another, 2000 (1) MWN (Cr.) DCC 85 Bom; (10) K.P.G. Nair v. Jindal Menthol India Ltd., 99 Com. Cases 519.
5. Before dealing with this question, let us now refer to the allegations mentioned in the complaints filed against the petitioners.
6. In the complaint in C.C. No.2611 of 1998 in para 14, the relevant allegations against the petitioners are given as follows:-
“The second to eighth accused were at the time of the offence was committed and still are in-charge and responsible to the first accused for the conduct for the business of the first accused company. The offence was also committed with the consent and connivance of the second to eighth accused. All the accused have therefore committed the offence and are liable to be punished.”
7. The relevant averments made against the petitioners in para 15 of the complaint in C.C. No.2612 of 1998 are given as follows:-
“The second to the tenth accused were are the time of the offence was committed and still are in charge and responsible to the first accused for the conduct for the business of the first accused company. The offence was also committed with the consent and connivance of the second to tenth accused. All the accused have therefore committed the offence and are liable to be punished.”
8. It is settled law that there must be averments in the complaint making accusation constituting the alleged offence to enable the Magistrate to take cognizance of such offence and to issue process to such of the persons against whom the allegations have been made in the complaint.
9. In this context, it would be appropriate to quote the provision under Section 141(1) of the Act.
“141. Offences by companies: (1) If the person committing an offence under Section 138 is a company, every person who, at the time of the offence was committed, was in-charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly :
Provided that nothing contained in this sub-Section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.”
10. The reading of Section 141(1) of the Act would make it clear that the company as well as the persons in- charge and responsible for the conduct of the business of the company at the time of the commission of offence can
be proceeded with, as they shall be deemed to be guilty of the offence. Therefore, the complainant has to necessarily allege in the complaint that the persons who are the accused in the complaint were in-charge of and responsible for the conduct of the business of the company.
11. Section 141(2) of the Negotiable Instruments Act would provide
thus:-
“(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of. or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.”
12. As laid down by this Court as well as the Apex Court, mere issuance of cheque and the dishonour would not create cause of action warranting the prosecution. The non-payment of the cheque amount despite the receipt of statutory notice alone would give rise to the cause of the action, which would be the subject matter of the prosecution. Therefore, when it is alleged, in the complaint that they are responsible for the failure to make payment of the same despite the service of notice, those allegations would certainly cover Section 141(2).
13. Section 141(2) starts with the non obstante clause. Under sub-section (1), the persons in-charge of and responsible to the company shall be deemed to be guilty of the offence. But, under sub-section (2), even the persons who are not stated to be in-charge of and responsible to the company can be prosecuted, if it is alleged and proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any of those persons prosecuted.
14. On going through the Sections and the relevant accusations in the complaint, it is clear that the complainant mentioned, in the complaint that the petitioners were not only in-charge of and responsible for the affairs of the company, but also the offences were committed with the consent and connivance of the petitioners/accused and therefore, all the accused are liable to be punished for the offences under Sections 138 and 142 of the Negotiable Instruments Act,
15. When the allegations as contained in the complaint prima facie make out a case against the petitioners that they are in-charge and responsible for the affairs of the company and the offence was committed with the consent and connivance, they were rightly summoned by the trial Court to face the trial. The question whether they were actually in-charge and responsible for the conduct of the business of the company, would be determined only after evidence was let in in that behalf by the parties.
16. As laid down by the Apex Court, the proceedings against the accused in the initial stage can be quashed only if on the face of the complaint or the documents accompanying the same, no offence is made out. In other words, the test is that taking the allegations and the complaint as they are without adding or subtracting anything, if no offence is made out then the High Court will be justified in quashing the proceedings in exercise of its power under Section 482 of the present Code.
17. But, in this case, the said requirement has not been satisfied inasmuch as there are allegations in the complaints against the petitioners covering both Sections 141(1) and 141(2) of the Negotiable Instruments Act.
18. In this context, it would be worthwhile to refer the definition of the word ‘complaint’. Section 2(d) of the Cr.P.C. would define the word ‘complaint’ as follows:-
“complaint means any allegation made orally or in writing to a Magistrate, with a view to his taking action under this Code, that some person, whether known or unknown, has committed an offence, but does not include a police report.”
19. Thus, according to Section 2(d), Cr.P.C. there must be some allegations either oral or in writing with respect to the persons mentioned therein to come to a prima fade conclusion that the said individual has committed the offence. Though no form is prescribed in which the complaint must be given, there must be an allegation which prima facie discloses the commission of an offence with respect to the persons shown as accused, which is necessary fact for the learned Magistrate to take further action.
20. Section 141 of the Negotiable Instruments Act is a deeming provision to bring the Directors or partners within the purview of Section 138, if they are in-charge of and responsible to the company for the affairs of the company at the time when the offence was committed. It does not make all the directors or partners liable for offence, whether they do business or not. But for the said provision, only the company or the firm or association of individuals alone is liable for the offence under Section 138 of the Act.
21. So, to bring the persons within the purview of Section 138 of the Act, there must be some specific averment against- those persons so as to attract Section 141 of the Act to take cognizance of the offence under Section 138 of the Act by the learned Magistrate as against those persons. In the complaints in the instant case, there are averments constituting the offences under Section 138 and 142 of the Act.
22. In the light of those specific averments mentioned in the complaints attracting the offences alleged, the contention of the learned senior counsel that the mere mentioning that the petitioners were in-charge and responsible for the conduct of the business of the company in the complaint is not sufficient cannot be accepted.
23. This well settled law has been laid down by the Supreme Court in Municipal Corporation of Delhi v. Ram Kishan Rohtagi, and Delhi Municipality v. Purshotam Dass, 1983 Crl.L.J.172. The rulings contrary to the above principles by various High Courts are not good law in view of the Apex Court’s judgments. Moreover, the various judgments of Supreme Court cited by the counsel for the petitioner would deal with the cases where it was held that there was no material produced before the Court during the course of trial to establish the allegation made in the complaint. Therefore, those decisions would not be applicable to this case, as we are dealing with only the quashing application and not about the sufficiency or insufficiency of the materials produced before the trial Court for considering the conviction or acquittal.
24. In view of the above decisions, I do not find any merit in these petitions and accordingly, the same are dismissed. Consequently, the connected Crl.M.Ps. are closed. The trial Court is directed to go on with the trial and dispose of the matters as expeditiously as possible.