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IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR
CRIMINAL REVISION NO.171/2008
AND
CRIMINAL REVISION NO.172/2008
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CRIMINAL REVISION NO.171/2008
APPLICANT:- Shyamrao s/o Narayanrao Borghare,
aged 48 years, Occu. Private Service,
R/o Plot No.206, Janki Nagar,
Ring Road, Nagpur.
...VERSUS...
NON-APPLICANT:- Narendramal s/o Mishrimal Bafna,
aged 56 years, Occ. Business,
R/o Plot No.6, Susnehanagar,
Near Manjusha Convent, (Near Khamla),
Nagpur O/A Director, Coventry Spring
Engineering Company Limited,
Plot No.D2, Maharashtra Industrial
Development Corporation, Industrial Area,
Hingna Road, Nagpur.
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[Shri N.P. Hiwase, Ms Meena N. Hiwase, Advs. for applicant]
[Shri A.P. Wachasunder, Adv. for non-applicant]
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CRIMINAL REVISION NO.172/2008
APPLICANT:- Mahadeo s/o Govindrao Jibhkate
Aged 56 years, Occu. Private Service,
R/o Plot No.254, Ashirwad Nagar, Hudkeshwar,
Nagpur.
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...VERSUS...
NON-APPLICANT:- Narendramal s/o Mishrimal Bafna,
aged 56 years, Occ. Business,
R/o Plot No.6, Susnehanagar,
Near Manjusha Convent, (Near Khamla),
Nagpur O/A Director, Coventry Spring
Engineering Company Limited,
Plot No.D2, Maharashtra Industrial
Development Corporation, Industrial Area,
Hingna Road, Nagpur.
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[Shri N.P. Hiwase, Ms Meena N. Hiwase, Advs. for applicant]
[Shri A.P. Wachasunder, Adv. for non-applicant]
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CORAM:- A.B. CHAUDHARI, J.
DATED :- 16.02.2010.
ORAL JUDGMENT
1. Heard. Rule. Rule returnable forthwith. Heard finally by
consent of learned Counsel for the rival parties.
2. Both these revisions are being disposed of by this common
judgment since the issue involved is the same in both the cases.
3. The applicants in both these revisions had filed their
respective complaints under Section 138 of the Negotiable Instruments
Act in the Court of Magistrate in respect of the dishonor of cheques
issued in their favour by the non-applicant for the amount of
Rs.1,25,373/- and Rs.80,559/- vide cheques dated 19.2.2007 and
16.2.2007 respectively. The revision applicants were working in the
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Industry, namely, Coventry Spring Engineering Limited at Nagpur. The
non-applicant had signed both these cheques in his capacity as the
Director of the said Company, which eventually were dishonoured. The
cheques were towards the unpaid wages of both the applicants. The
Magistrate upon receipt of the complaint and the documentary and oral
evidence placed before him made a reasoned order and issued process
against the non-applicant by order dated 16.11.2007. The
non-applicant filed two revisions against the said two orders in the said
two criminal complaint cases before the Additional Sessions Judge – 8,
Nagpur. The Additional Sessions Judge – 8, Nagpur held that there was
no averment in the complaint that the non-applicant/accused, who is
Director of the Company was responsible for day-to-day transaction of
the Company and was managing and looking after the Company. It is
on this basis, he allowed both revisions and set aside the order of
issuance of process in both these cases. Hence, these revisions by the
two workers.
4. Learned Counsel for the applicants in both the revision
applications argued that there were averments in the complaint, which
satisfy the requirement of Section 141 of the Negotiable Instruments
Act and therefore, the revisional Court has factually committed an error
in coming to the conclusion that the non-applicant/Director of the
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Company was not responsible.
5. Per contra, learned Counsel for the non-applicant/accused
argued that these being second revisions, the bar of Section 397 (3) of
the Code of Criminal Procedure would apply and these revisions are,
therefore, liable to be dismissed as not maintainable, they being
second revisions. He then argued that this case is covered by the
decision of the Supreme Court in the case of S.M.S. Pharmaceuticals
Ltd….Versus…Neeta Bhalla and another, reported in 2007 (4)
Mh.L.J. 452, Supreme Court, in the case of Everest Advertising
(P) Ltd….Versus…State Govt. of NCT of Delhi and others,
reported in 2007 (5) Supreme Court Cases 54 and in the case of
N. Rangachari…Versus…Bharat Sanchar Nigam Ltd., reported in
2007 (5) Supreme Court Cases 108.
6. On the basis of those Supreme Court judgments, he argued
that the order of the revisional Court is clearly supportable and no error
of law has been committed by the learned Sessions Judge and
therefore, no interference could be made by this Court. He then
argued that the Company has started proceedings before Debt
Recovery Tribunal against the attachment of properties of the Company
and the non-applicant as well as Company were pulled to get relief
after which the payments could be made to all the workers including
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the present applicants towards their wages. He then argued that the
Company was not made a party to the complaint and that defect could
not be cured and therefore, the revisional Court was right in dismissing
the complaints filed by the complainants/applicants.
7. I have gone through the impugned revisional order so also
the complaints and the other documents including cheques placed on
record. It would be proper to quote relevant averment from the
complaints, which reads thus in paragraph No.1 of the complaints.
“The accused was the employer of the
complainant and the complainant was working in the
company of the accused. The accused was one of the
directors of the company, named as, Coventry SpringEngineering Company Limited and he was holding
account and was making payments of the labourers and
workers. He was having authority to make payments and
issue cheques on his name to the workers.
That the complainant was working in the
company of the accused and when the company was
closed by the accused the total wages of Rs.1,25,373/-
(Rs. One Lac Twenty Five Thousands Three HundredsSeventy Three) and Rs.80,559/- (Rs. Eighty Thousands
Five Hundreds and Fifty nine) are due on the accused. For
the payments of the same the accused had issued
cheques.”
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8. Perusal of both cheques show that they were issued in
favour of both the applicants singed by Director i.e. non-applicant for
Coventry Spring Engineering Limited and perusal of the above
averments and the signature on cheques clearly show that both the
cheques were signed by the non-applicant/accused in the capacity of
the Director of the Company. The above averments, in my opinion, are
enough to fasten the liability on the non-applicant as he is the
signatory to the cheques and the averment shows that it is he, who
was making payments to labourers and workers during the course of
functioning of the Company. It can, therefore, be easily said that it was
the non-applicant/accused who was fully in-charge of the affairs of the
Company. Thus, finding recorded by the revisional Court, contrary to
the above, is factually wrong and perverse. That apart, at the trial, the
complainants are entitled to amplify the above pleadings in the
complaints with necessary documentary as well as oral evidence and
therefore, it would be premature to say that the non-applicant was not
responsible. Having regard to the three Judges decision of the Supreme
Court in the case of S.M.S. Pharmaceuticals Ltd….Versus…Neeta
Bhalla and another, (supra) the Hon’ble Supreme Court in paragraph
No.10-19 (c) observed thus.
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"10 -19 (c). The answer to Question
(c) has to be in the affirmative. The question notes
that the Managing Director or Joint Managing Director
would be admittedly in-charge of the company and
responsible to the company for the conduct of itsbusiness. When that is so, holders of such positions in
a company become liable under section 141 of the Act.
By virtue of the office they hold as Managing Director
or Joint Managing Director, these persons are in-chargeof and responsible for the conduct of business of the
141.
company. Therefore, they get covered under section
So far as the signatory of a cheque which isdishonoured is concerned, he is clearly responsible for
the incriminating act and will be covered under
sub-section (2) of section 141.”
9. The aforesaid paragraph No.10-19 (c) was the answer given
by the two Judge decision of the Supreme Court in the said case. This
decision was rendered on 20.2.2007 and in my opinion, the said
answer in paragraph No.10-19 (c) is squarely applicable in the instant
case since the non-applicant is a signatory of the cheques, apart from
the averments, which I have already reproduced above which clearly
bring the non-applicant in the net. Thereafter, on 19.4.2007 another
two judge decision of the Supreme Court in the case of
N. Rangachari…Versus…Bharat Sanchar Nigam Ltd. (supra) was
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rendered. The relevant paragraph No.21 from the said decision is
reproduced below.
“21. A person normally having business or
commercial dealings with a company, would satisfy
himself about its creditworthiness and reliability bylooking at its promoters and Board of Directors and the
nature and extent of its business and its memorandum
or articles of association. Other than that, he may notbe aware of the arrangements within the company in
regard to its management, daily routine, etc. Therefore,
when a cheque issued to him by the company is
dishonoured, he is expected only to be aware generallyof who are in charge of the affairs of the company. It is
not reasonable to expect him to know whether the
person who signed the cheque was instructed to do soor whether he has been deprived of his authority to do
so when he actually signed the cheque. Those are
matters peculiarly within the knowledge of the company
and those in charge of it. So, all that a payee of acheque that is dishonoured can be expected to allege is
that the persons named in the complaint are in charge
of its affairs. The Directors are prima facie in that
position.”
10. In view of the above discussion, it is clear that the
non-applicant who is the signatory of cheques in both the cases, who is
also Director of the Company cannot escape the liability. It is
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unfortunate that the non-applicant who has issued cheques to the
applicants towards their hard earned wages is now refusing to make
payments thereof to the workers. The cheques are of the dates
19.2.2007 and 16.2.2007 and the poor workmen have yet not received
the same. The aforesaid legal position and the fact that the
non-applicant is signatory of the said cheques cannot be said to be not
in the knowledge of the non-applicant, who has endeavoured to
prolong the said two criminal cases on such flimsy grounds.
ig The
workmen cannot be expected to fight with the
non-applicant/Industrialist without any means. Thus, looking to the
conduct of the non-applicant in not paying them their hard earned
wages but making them move from the Court to Court will have to be
taken note and consequently, this Court inclined to award suitable
costs to the applicants/workmen. Hence, I make the following order.
ORD ER
(i) Both criminal revisions are partly allowed.
(ii) The impugned judgments and orders in Criminal
Revision No.257/2008 and 256/2008, dated 18.7.2008, passed by the
Additional Sessions Judge – 8, Nagpur are set aside with costs of
Rs.10,000/- (Rupees Ten Thousand Only) in each case, payable to the
applicants workers within a period of four weeks from today by
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depositing the same in the trial Court, which shall be a precondition.
(iii) Proceedings in Criminal Complaint (Summary Case)
Nos.15296/2007 and 15292/2007 are restored on the file of the trial
Court for fresh disposal and trial in accordance with law.
(iv) The complainants shall be allowed to amend their
complaints as permissible in law.
(v) The trial Court shall take up the criminal cases for
hearing and final disposal and decide the same finally within a period
of six months from today.
JUDGE
SSW
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