ORDER
C.Y. Somayajulu, J.
1. Sri Chakra Cotton Company filed four cases under Sec.138 of the Negotiable Instruments Act (the Act) against Akshaya Textiles Limited (hereinafter referred to as “the Company) and its Directors in connection with the bouncing of cheques issued to it, after issuing statutory notices of demand after dishonour. They were taken on file and summonses were issued to the Company and its Directors. These petitions are filed by P. Sudhavenkata Lakshmi, one of the accused in these cases, for quashing the complaints against her, contending that she is not the Director of the Company and is implicated in the case only because she happens to be the wife of the Managing Director of the Company, and as she is of indifferent health.
2. The main contention of the learned counsel for the petitioner is that since the petitioner is not a Director in the Company and since she is implicated in the case only because she is the wife of the Managing Director of the Company, prosecution against her is liable to be quashed. He relied on G.S. Prabhavathi Peti Vs. N. Subrahmanyeswara Rao1 and also on Janaki Manoharan v. Gayatri Sugar Complex Ltd.2. The contention of the learned counsel for the complainant (first respondent in these petitions) is that the specific averment in the complaint is that all the Directors of the Company are in-charge of the day-to-day affairs of the Company and the cheques issued with knowledge of the consequences of issuing cheque without funds, and since the petitioner has not produced even a scrap of paper into Court to show that she is not a Director of the Company, and since a complaint cannot be quashed merely on the averments in the petition filed under Sec.482 Cr.P.C. but has to be decided on the basis of the averments in the complaint itself, there are no grounds to quash the complaints.
3. The two decisions, relied on by the learned counsel for the petitioner, have no application to the facts of this case. In G.S. Prabhavathi Peti’s case (1 supra) the complaint was filed against the wife of the drawer of the cheque also on the ground that the car, with the money borrowed, was purchased in her name. Holding that prosecution can be launched against the persons who drew the cheque only and no other person can be prosecuted except in the circumstances mentioned in Sec.141 of the Act, prosecution of the wife of the drawer of the cheque for its dishonour, on the ground that the amount borrowed from the complainant was utilized for the purchase of car in her name is not sustainable. In this case the specific case of the complainant is that petitioner also is one of the Directors of the Company and is in-charge of the day-to-day affairs of the Company and, therefore, is liable for punishment under Sec.138 of the Act by virtue of Sec.141 of the Act.
4. In K. Janaki Manoharan case (2 supra) the complaint was quashed against some of the Directors because there was no allegation regarding their involvement in the offence. In this case there is specific averment that the petitioner and other Directors of the Company are responsible for and are in charge of day-to-day affairs of the Company.
5. In Anil Hada Vs. Indian Acrylic Limited3 the Supreme Court held that three categories of persons can be discerned from Sec.141 of the Act, who are brought within the purview of the penal liability through the legal fiction envisaged in that Section. They are: (1) The company which committed the offence, (2) Everyone who was in charge of and was responsible for the business of the company, (3) any other person who is a director or a manager or a secretary or officer of the company, with whose connivance or due to whose neglect the company has committed the offence. So, when the drawer of the cheque falls within the ambit of Sec.138 of the Act as a human being or a body corporate or a firm, prosecution proceedings can be initiated against the drawer, and in view of the phrase “as well as” used in sub-section (1) of Section 141 of the Act, when a Company is the drawer of the cheque such company would be the principal offender under Sec.138 of the Act and the remaining persons would be the offenders by virtue of the legal fiction created by the legislature.
6. Sec.291 of the Companies Act lays down that the Board of Directors of a Company shall be entitled to exercise all such powers and to do all such acts and things as the Company is authorised to exercise and do, and the only limitation of the power as per the proviso is that they cannot exercise any power or do any act or thing which is directed or required by the Companies Act or by the Memorandum or Articles of the Company in a general meeting of the Company.
7. Thus it is clear that the business of the Company would usually be carried on by the Directors of the Company.When there is a specific allegation in the complaint that the petitioner and other Directors are in charge of the day-to-day affairs of the Company and are running the business and have issued the cheque with an intention to evade payment on some pretext or the other, being fully aware of the consequences of dishonour, it cannot be said that there is no averment in the complaint that the petitioner is not a Director of the Company and that she is not aware of the consequences of the dishonour of the cheques. As rightly contended by the learned counsel for the complainant, petitioner has not produced any evidence to show that she is not in the Board of Directors, though it is specifically alleged in the complaint that she is one of the Directors of the Company.
8. Proviso to Sub Section 141 of the Act itself lays down that a person prosecuted in the capacity as person in charge of the affairs of a company can prove that the offence was committed without his consent or knowledge and hence is not liable for punishment. So, petitioner can adduce evidence during trial that she is not a Director of the Company or that the offence was committed without her knowledge and is entitled to the benefit of Proviso to Sec.141 (1) of the Act. Recently the Supreme Court in M.M.T.C. Ltd. Vs. Medchel Chemicals & Pharma (P) Ltd.4 held that a complaint cannot be quashed merely on the basis of averments in the petition filed in the High Court in respect of the matters which have to be proved by the accused during the course of trial. The question as to whether the petitioner is or is not a Director of the Company is a question of fact.Since the petitioner has not produced any document to show that she is not a Director of the Company, merely on the basis of the averments and assertions in the petition that she is not a Director in the Company, the complaint against her cannot be quashed.
9. The other ground alleged in the petition is that since the petitioner is an ailing woman she cannot be prosecution. There is no provision in Cr.P.C., which exempts sick and infirm persons being prosecuted.Therefore, even assuming that the petitioner is a sick woman, that itself is not a ground for claiming immunity from prosecution. Therefore, I find no grounds to quash the complaints against the petitioner and hence all these petitions are dismissed.
