{"id":191580,"date":"2008-09-24T00:00:00","date_gmt":"2008-09-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/m-r-patel-former-managing-director-vs-ms-r-k-synthetics-fibres-pvt-ltd-on-24-september-2008"},"modified":"2018-10-15T21:49:26","modified_gmt":"2018-10-15T16:19:26","slug":"m-r-patel-former-managing-director-vs-ms-r-k-synthetics-fibres-pvt-ltd-on-24-september-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/m-r-patel-former-managing-director-vs-ms-r-k-synthetics-fibres-pvt-ltd-on-24-september-2008","title":{"rendered":"M R Patel Former Managing Director vs M\/S R K Synthetics & Fibres Pvt Ltd on 24 September, 2008"},"content":{"rendered":"
Karnataka High Court<\/div>\n
M R Patel Former Managing Director vs M\/S R K Synthetics & Fibres Pvt Ltd on 24 September, 2008<\/div>\n
Author: Jawad Rahim<\/div>\n
\u00a7\n\nIN THE HIGH COURT OF KARNATAKA AT BANGALORE\n\nDATED THIS THE 24?\" DAY OF SEPTEMBER 20,98-.':'_\"I..D_\n\nBEFORE\n\nTHE HON'BLE MR. 3DST1cE>;AwAD--EA--I\u00a7{IA\/I'*5:  1'\n\nCRL.R.P. NO. 18f3.\u00a73\/2Q_gE\u00a7 4'\n\nBETWEEN 1\n\n(By Ms.LEEIIIVA5-:_EyAI\u00a7I}I~4A;\u00a7', \u00ab._rEA_\u00a7O\\\/. EOE\n\nM RPATEL  \nFORMER MAE\\iAGIN~f;3 DIRECTCIR \nM\/S SUNSU GARM-ENTSl_  \" = \nNOW UNDER LIQDID.ATION   \nNO 102, 3CROSS,\"2\"?-ST--,AOIE,'  12*'\nINDuST12.IAE    ' \nBANGA.LDR%3\"2_.2..    \n     \" ' PETITIONER\n\nM\/S s;I'R\"E\"EI-I\/A.\u00bb:.\\,fI:,SA AISASOEEI-ATES')v\"~'\n\nAND : \n\nM\/S Rx SYI\\DfHETIc~S & FIBRES PVT LTD\n; I<AISE:NA..MILLS COMPOUND\n\n EDS MARG;"EvE-MIND SONAPUR\n\nA 1' " I _ M-I TM B"AI_' = \n\nBEANDDE\n\n RESPONDENT<\/pre>\n
(BR\/– SEED -v5″SI~+ANt\u00bb<ARA NARAYANA, ADV.)<\/p>\n
 CRL.RE'<\/ISION PETITION IS FILED L}\/8.397 AND 401
\n CR.P_.C BY THE ADVOCATE FOR THE EETITIDIAER ERAT\/INS
\n'THAT THIS HON'BLE COURT MAY BE PLEASED TO SET
\n ASIDE THE IMPUGNED 3L}D_G\u00a5\\_'\u00a7E_f\\\u00a5T_AE\\iD ORDER DT.28.7IO5
\n"""PASSED IN CRL.A,NO.38\/O3 ON Tz4IE"F1LE OETHE P.'O'., '<\/p>\n
glw<\/p>\n
"i<\/p>\n
FAB"? TRACK COURT~V\u00a7\u00a7, 8'LORE CITY AND THE ORDER
\nPASSED BY THE XV ACMIVL, BIORE, IN C.C.NO.33196[OO.<\/p>\n
This petition coming on for admission this <\/p>\n
made the foiiowing<\/p>\n
This revision petition ui'ider"~,SejCtrios'n 3.97,_'"Cr';!\u00a7?'i.r-C.'*1.i_s<\/p>\n
directed against the jLJdgFT1L'\u00b0.iVl_'it"–.__.in C'r'1.2X.38\/'Q3A~{passe\u00bbd on-.i"<\/p>\n
28.7.2005 by the Judge, Fa=st"'-.,i:frag_i< t.i'oi-i..itt_, ifvsfangaiore,
\nconfirming the }.L.idgl"\u00a31V\u20ac\u00a7'ii1\u00a5;r in on the fiie of
\nMetropolitan Magistrateyaangaiore,  the petitioner<\/p>\n
for the offernge i;njde'rVVS'e'ctioii :38 of the
\nNegotiabide"Iin\u00e9i\ufb02tiineritsi'Att,\n<\/p>\n
2. i2,iThis”‘ma’tte.r’:ha’sxbeen Coming up for admission<\/p>\n
for qgsgiite.some'”t..i;r*\u00e9e. Considering the grounds urged, I am<\/p>\n
 matter requires consideration with regard<\/p>\n
 Hence, the \u00a73etition_is admitted.\n<\/p>\n
Witii””Chv*i’..CfJ:’iiiS\u20ac{it of both sides, it is taken 1.1;? kor finai<\/p>\n
  ‘hearing’.”<\/p>\n
“3. The factuai matrix as manifest from the Case<\/p>\n
it “‘p”ag3ers reveais:\n<\/p>\n
i.\n<\/p>\n
W<\/p>\n
M\/s R.%<.Synthetics & Fibres Private Limited, a<\/p>\n
company incorporated under the Companies ;i\\ct,v.-1956,<\/p>\n
presented a comeiaint invoking Section 280, Cr.P.C';.H:see:'k_i'nrg<\/p>\n
prosecetion of M\/s Sunsu Garments, a company" reg_ist'etreVc1's V'<\/p>\n
under the Companies Act, andfits'-manag_.i,njg':v',diVre{i'tor,..<\/p>\n
M.R.Patei (petitioner herein) for theoiffexnceitrindevr<\/p>\n
1<\/span><\/p>\n
{J3<\/p>\n
business transactionsi-vvitti  toA””i>L,r.r\u00bbt\u00a7hase of
\npolyester wadding   and on
\naccounting, it ‘\\_\/vats’  It failed
\nto pay the   iniwthe complainant<\/p>\n
presenting’ C2i’n2pa’::y9*\u00a7\u00e9v!ii’*fOn No.68\/99 for winding<\/p>\n
up of the”cempany”a’s become a debtor.\n<\/p>\n
._’:,_j}*Da,;.rirag proiiceedings in the company court, on the<\/p>\n
,{ind:evrt,a’k.i:ng,,”given by 2″” accused to honestiy discharge the<\/p>\n
iiabiliity pro’v’id.ed reasonabie time is given, a scheme was<\/p>\n
“._>WO\u00a5’3<\u20acC! otgtvand he was permitted to pay the amount due in<\/p>\n
A r~:tf'\u00a7A,Vbini.onthiy instaiments. On the basis of such proposition<\/p>\n
'  accepted by the compiainant, the company petition came to<\/p>\n
 be disposed of with an observation that if for any reason the<\/p>\n
air<\/p>\n
8, N.I.Act on the pr mise tha_t"'the accr_2s'ed c,on::v;5'arsy" had i'<\/p>\n
 initiai;\u00a7ed.ti.\n<\/p>\n
4<\/span>
\naccused were to commit breacii of the undertaking, theii
\nthe complainant Company woiiid be entitled to revivVai._:o’f._its<\/p>\n
action initiated under company law.\n<\/p>\n
Pursuant to the undertaking, an  to be  <\/p>\n
fiied on 7.7.1999 and five ciie=.gue:s-‘A.were”._issued~-.,___and.’<\/p>\n
company petition was disposed off.\n<\/p>\n
The cheques on pArese.n_tat’i”o.n were freturned
\ndishonoured for ‘insufficient “i’.:JFid’s’_’gi_\\2\u00e9.ng~. rise to action<\/p>\n
uricier law to pVrose’c_L2te\u00a7;them; ii.nd~e’r.._th’e”:deeming provision<\/p>\n
of Section ;L”3S_,~._i\\i:I1V;VA.ct-i_Vj–\u00ab.__:.Afte\u00e9r”t_a%.H”ADiiring trial, complainant placed reiiance on the ocuiar<\/p>\n
teistimoiiy of its officer PW1 and produced 9 documents,<\/p>\n
6730<\/span><\/p>\n
‘.}I<\/p>\n
while’ on” behaif of the accused,  accused tendered<\/p>\n
evidence to negate the assertion of the complainant\u00bb._f~.._,’l’-..<\/p>\n
The trial court considering the evidence o\u00a3i=.i’eco’l’–dl V’<\/p>\n
concluded that it was sufficient to c-:harge_against.<\/p>\n
the accused for the said offence and’\u00bbth’us found ,2,” <\/p>\n
guilty, but while recording si’i’ch:”finding*,._
\njudge held :5′ accus.e:d.___wa_s”\u00e9,’VA’v,.:lfAonip._a.ny ‘ag’ai’n4st which
\ncompany proceedings were High Court
\nand as the   of the matter,
\nproceedings’  by the provisions of
\nSection’?l46A..,.o.f_  and Dermission was
\nrzecessaV”ry,”  Court passed the following
\norder_:__ V’ l A it i
\n‘ ‘ ‘\u00b0\u00abc_y ….. ‘ORDER<\/p>\n
 \u00bbv4Fu,:i’:t”‘r_f?..er proceedings against A:
\n  is hereby suspended until leave is
\n o’–b:ta’inVed by the complainant company from<\/p>\n
‘the Hon’\u00a73le High Court to continue<\/p>\n
 prosecution proceedings against A-3<\/p>\n
(W<\/p>\n
company.\n<\/p>\n
t’ne,.’.=|eVavrnWeVd tria\u00e9 it<\/p>\n
(3<\/p>\n
Acting under Section 255(2) of Cr.P.C.,
\nI hereby convict accused no.2 Mr. M.’R.Patel,
\nmanaging director of A1 company for
\noffence oenishable under Section S”\n<\/p>\n
Section 141 of the N.I.Act  E  A
\nhim to pay a fine of Rs.3,25:,:AOOQ,\/:},’
\naensa~_tion.’\n<\/p>\n
4.   iorder\u00e9,’ t:h’e”le_a.rned trial judge has
\nreferred  figa\ufb01gg ‘to ‘i”:jitEation of winding up
\npi’ocee_dingsSAAaS~ri_-d  in -oaiirvagraohs 12, 13 and 14 of<\/p>\n
the imou,_g4’ned’~.o’z*d,.er,V’~~.,,___*”?herefore, it is clear from the<\/p>\n
reasoning rvecorded Sbylvlthe learned trial judge and the<\/p>\n
 o_e.erati’%”}:e jfjogrtion Vvotlthe order, the learned trial judge had<\/p>\n
 not so-hj:’ec’teci.accused no.1 trial. However, the evidence on<\/p>\n
rec\u00abord,___v’tia,s’~~’Sheen apelied by the learned trial judge to<\/p>\n
 .,cons\u00e9d’e.r\u00b0 proof regarding guilt or otherwise of accused no.2<\/p>\n
it ‘~,f”or..the offence under Section 138, l\\l.1.Act. Accepting that<\/p>\n
.–evidence as sufficient, accused no.2~managing cl\u00e9rector has<\/p>\n
are<\/p>\n
‘”9<\/p>\n
been convicted to pay fine of Rs.3,25,000\/\u00bb and in default
\nto undergo 8.1. for a period of 3 months, with avi~.f;u~rtiii.er<\/p>\n
direction to pay Rs.3,20,0iZiO\/\u00bb as cornpensation__.—iv’<\/p>\n
5. The above order was_q.ue_stioried”*iia’efoi’~eV”\u00a7irst <\/p>\n
appellate court in’C:’l.A.38\/O3. C’orisri’dering\u00bb._lt’he’ <\/p>\n
urged by the accused, it held”i3o’t._sufti’cie’nzto’ir\u20acte’i*fiere.3with <\/p>\n
the fiiwdirig of the ‘triai court an_dx’th:..2’s_,_ the appeal? came to
\nbe dismissed. Aggrieved”‘–h”y.Aboi;hi.pthe”s.e’-jtidgments, accused
\nis in revision. ”\n<\/p>\n
6. _In  the fgirouuinds urged are that<\/p>\n
proceedin\u00a7s”t;:..nd_er  C'<)fj*i;)ai1i_e's"Act were pending against<\/p>\n
the 1" accused provision of Section 446 of<\/p>\n
the Actproseciition'V–.coAL;_ldhot be initiated without prior leave<\/p>\n
  Company 'coi;rri;.\u00b0 It was also urged that in view of<\/p>\n
"'_sd'ch"restrii:tion"..oii prosecution of the is' accused, the<\/p>\n
n"ianaginvg.–dt'ir_ector and other officers cannot be prosecuted<\/p>\n
Hwhen prosecution against the 1"' accused itself is improper.<\/p>\n
 Learned counsel for the petitioner has reiterated<\/p>\n
 "these aspects which are seriously opposed by the learned<\/p>\n
arr<\/p>\n
"~m__'<\/p>\n
ti
\ncounsel for the respondent~complaihant. Learned counsel<\/p>\n
for the respondent would contend that the [)fO\\,1'..lV'.V\u00a7lQ:.'f'i._V of<\/p>\n
Section 141, \u00a5\\JK1.Act no doubt makes the <\/p>\n
principal offender, but the liability of the mai'iia.:g:i~n:g'*~:director-\u00ab.. <\/p>\n
and other officers referred to therein .ind'e.oei,i'cle%it"'o_f am?"<\/p>\n
action against the e””i;fhe4__priiicivpal”;<\/p>\n
offerider. In other words, it___”isV u.rged.”tha’t there is no
\nimpediment for the c-oi<"r'i_ol;,a_ihai*.3t"=t_o-r'choose whether to
\nprosecute the rcompa:*ay'~\u00bbn:r hot, i\u00b0Thel_"complainant can
\nproceed agai'instiil;j:tii'_1.\u00bbe~o:ffice_Vrs _of}-f_heV"company, leaving the
\ncoiiipayn,y_VgVa'par't arid ii}'=si}–iiiiactioiri, ho plea can be taken
\nthat in the ya'o~s'egice\u00bbg"off'vp__ros.ecution against the principal
\noffender,'=t_hlevactiohia-gainst officers cannot be prosecuted.<\/p>\n
It..\u00abii)lasi'.ft.irth'e-rntirged that in the instant case as the<\/p>\n
\u00bb :p\u00abr.oVceeAdi.rigs'i–..against company was kept in abeyance, the<\/p>\n
H~.or.ovisi'onj..oi'~i.,'S'ectioh 446 of the Companies Act was not<\/p>\n
applic.\u00a3i:i).le'r"'V' Alternatively, it was urged that permission was<\/p>\n
 ";<;o.t. required to prosecute the company even though
\n"sproceedings were pending because the stage at which the<\/p>\n
H proceedings were at the relevant time is important.<\/p>\n
8%.,'\/_<\/p>\n
9<\/span><\/p>\n
8. Learned counsel places reliance on the decision<\/p>\n
of the apex court in the case of ANIL HADA .\n<\/p>\n
ACRYLIC LTD. ([2960) 1 SCC 1). I  t:esa:rd’–‘%trh’\u00e9 <\/p>\n
learned counsel in supp\u00a7emeiitatidnA”Vo’f’the ma_tVeri_aiV rnadne<\/p>\n
available.\n<\/p>\n
9. In this revision petvi_t”ion’,the’rn’o.Vot:V.giiefstion that
\nneeds to be considered”–.is’,_wA–hel::_her’*wi_h-ii\/ie_w of the order of
\nthe trial court sus’pendi’i’i’g:..pvgrosectutiiionv;a*.ga’Vi’nst 1″” accused
\n(principai  obtained from the
\ncompariy__Vco’ii.rt:’,*   against the managing
\nclirector be counsel had diiring the<\/p>\n
course oi’__alrgVun*seritAs,.–iisuhnwitted that out of 5 cheques<\/p>\n
iss;,I.ed” by the’Va__ccused in terms of the undertaking given<\/p>\n
.Ab\u20ac\u00a7t)re_Vtl5.\u20ac.CC’i3f3pa\ufb02y court, four chegues had bounced and in<\/p>\n
“:_iri:_i_iparV”‘\u00abc_ivr.cii~ijr”is’tances other prosecution was launched<\/p>\n
agains1;..’:th’e”‘cornpaiiy and managing director. Proceedings<\/p>\n
 ci;hininVa’ted in conviction and was tested in appeal. This<\/p>\n
“rco’u’rt in revision under Section 397, Cr.P,C. preferred<\/p>\n
 “against such conviction, rejected the revision petition,<\/p>\n
agu<\/p>\n
ill
\nconfirming not only the finding of guilt, but also<\/p>\n
consequential sentence. He submits this is the S”.??,Vch’e.qLJe<\/p>\n
and therefore, in view of such finding recorded_..’%\u00a7’_}:’\u00a7,r”t’h’i’$.,:coi-:__rt _<\/p>\n
in the other revision petition, con\ufb01rming .c’o’i’ivvicti,o’n. of thuev<\/p>\n
accused (petitioner herein), there,is:1’%:aarr’di\u00ab\\;’.,at-mgr” sicof-pe”rifor<\/p>\n
reconsideration of groundsurged as, the s\u00bban’.i.ev.,hVas_,\u00a7beierruv<\/p>\n
taken into consideration by  cri.\u00ab.’i:2_e,i\/isiion Petition
\n?\u00bb\u00e9o.393\/{)4 and connected<\/p>\n
10.    urged regarding
\ntenability  rr:-,an.aging director, it would
\nbe api:>’r’o’p’r’ia.:te”to:::f%\u00a7je’fe:’r-rt?itheiorder passed by this court in
\nthe rei\/isi’–o.’n  of 4 similar prosecutions.<\/p>\n
The same is-. e’><\/p>\n9_hsat’ion’  <\/p>\n
awarded in favour ofV.th.e cornp_la’ir-nantaln9..ea’ch<\/p>\n
case shall be as under:\n<\/p>\n
The default*~..gentencein yueaych cas’e\u00b0as
\nstipulated by the trVlal’court :i'”el”n”a\u00bbiV_r:sthe same in<\/p>\n
each case;   .\n<\/p>\n
 \u00ab*fh”e__aAccu.se’d_noi’2;. lsgrantecf tame to pay the<\/p>\n
said ..fin’e. ernountsyVwiiv\ufb01t\u00e9n’the”g:>eriod as stipulated<\/p>\n
 bell CW. 1′ 25 . _<\/p>\n
VV ” In Crl 81.2’\/”Q4″ Six weeks<\/p>\n
In_Cr{.R.P.. t31&3″_\/704 Two months
\nin Crl,R.P.”v_39′:t\/O4 Three months
\ntn”C,rVl.R.P. 392\/O4 Four months<\/p>\n
_A’TThe amount already deposited by accused<\/p>\n
\ufb02:=1.o.”2VV’qsixzall be immediately pasd to the<\/p>\n
cohjpliaanazut towards fine. If the accused no.2<\/p>\n
v–..Vfal’ls”‘to pay the balance of fine amount in any<\/p>\n
x within the period as aforesasd, the trial<\/p>\n
court as directed to secure has presence and to
\nsend hem to undergo the default sentence and to
\ntake steps to recover the fine and compensation<\/p>\n
amounts in the concerned case.’<\/p>\n
3*”\n<\/p>\n<\/p>\n
11. It is thus clear that the grounds t1rg\u20acC1V.V\u00e9ZQt’c3.i’i1St<\/p>\n
the reasoning of the trial judge and appellate  _<\/p>\n
revision petitions were not of the nature as”t\u00bbh.ej~on*e: in .. <\/p>\n
case. In those cases, the impugned order ot,t’ri.a’l”-cou’i<tt_ read
\nas fotlows:\n<\/p>\n
*.A.c<;i_i.<;,ea in c.c.32373\/do-\u00ab:_ to pa—yy_VV:ltii':ne  of
\nRs.1,90,000\/- in  _ def'a–ugl't– to-._underg'o-.s:m'pEe
\nimprisonment for tw4o"'nlior.iths.:V  ~ '<\/p>\n
Accused in C.C.33269,\/9'-ftzll to  fine of
\nRs.2,4O,OOOf*-V' in ,"'de'r'afuEt" undergo ssmpte
\nimDE'iS3Ol'lEfi'iEftt.,.f53i" two i;.*.\u00ab:mth*s   <\/p>\n
Accused  pay a fine of
\nRs.3,28.,VOG.O;\ufb01- in \u00ab.ed'efa_uEt"t to: undergo simp\u00e9e<\/p>\n
1mprtsognmentiifotr three monthsv,"\n<\/p>\n
Accused’  to Day a fine of
\nRs.3’r,.28l,OC)G;’— “girl, “default to undergo simp\u00e9e
\nimpris’c.nment’for~.tw’o.months.\n<\/p>\n
  l3L;t_45i:.he___imVpugne’d-o..:f_der in this revision reads as follows:<\/p>\n
A _  f-.’For_ther proceedings against A-1 company is
\n“rieifepy ,AVS%.l-S\ufb01e\ufb02ded till Eeave ES obtained by the
\n coinp’ljatn?-ant company from the Hon’b!e High Court to
\n_ co.:~itinu:e prosecution proceedings against A-1
\n‘co to pa n y.\n<\/p>\n
Acting u\/Sec.2S5(2) of Cr.P.C., I hereby<\/p>\n
xa”;convi<:t accused no.2 Mr.ivl_R,PateE, managing<\/p>\n
' dzrector of A-1 company for the offence punishable
\nu\/s 138 r\/w Sec.141 of N.I.Act and I sentence him to<\/p>\n
pay a fine of Rs.3,2S,G0O\/\u00bb in default, accused 2-
\nlVlr.M.R.PateE managing director of A-1 company shall<\/p>\n
E3<\/p>\n
undergo 3.1. for a period of three months. Out of
\nthe recovered fine amount, an amount of—-.__
\nRs.3,20,000\/~ shall be paid to the Complainant as,
\ncompensation. *   '<\/p>\n
The difference is very rnateriai. In C.C.33'9~2Q'{U.QV,:~A.Vj;llE3 tri'ail._i""<\/p>\n
court had exercised power dndei:__<\/p>\n
and the company was arraigri-ed as".accLiser\u00a7v'no.,i1 'and "the\ufb02<\/p>\n
managing director was arraigne-d'g:'asV acc'e.sg_edV':no'.:\u00a72 "for the
\noffence under Section'   gthevaccvesed were
\nsentenced to pay a fivne..,:'oVf.. in defaelt,
\ndirected   p.iQ\\f\/impi"isonment for 3
\nmonths:  learned trial gudge has
\nsiispeiide\u20ac_i against the company,
\nrequiring,_the  obtain prior permission of the<\/p>\n
cornpaey color-tygtio' 'proceed against it. The words used in the<\/p>\n
i\u00abnftpughedTuxorder iiiii Hciearly indicate that prosecution<\/p>\n
i"'pro;:eedi'i*.g_s.i'.i'-against the company were kept in<\/p>\n
abeyan_'ce\u00a3si;1spei1ded tili permission was obtained and<\/p>\n
h  .therefore, in the strict legai sense, trial of accused no.1was<\/p>\n
"'icsi;i-sp\ufb01ended. The trial had not recorded any finding agaisnt<\/p>\n
 " V-the company. It aiso shows that the learned trial judge<\/p>\n
(}cQ\/<\/p>\n
iii
\nproceeded independentiy against accused no.2 and found<\/p>\n
him guiity and passed the impugned sentence.<\/p>\n
1:2. Referenee made to the order of the.__co.–jo.rd'i'nia\u00bbte'c <\/p>\n
Bench of this court in Cri.R.P.391j-"O?-i and i:onnect.ed: casensig<\/p>\n
wiil not be of any avail to thegVrespobg\u00a7e'n_t in  <\/p>\n
has to be next seen, when proseic-ution p.roceei_\u00a7in'gs'V'ag'ainst V'<\/p>\n
the principai offender,'c~a_n  V;V"r,si__3be'ya'gCe;': can the
\nmanaging director or othe.r_oifficieirs_:b'efgziriogceeeied against.\n<\/p>\n
As seen from    is liabie to
\nbe tried for V;5;ee.t’ion 138, NJ. Act as
\noffender,Mthe’:V:(qn\u00e9e:\u00a7Vt’i’oij’~.Vg;V’\u00a7;-It  company which is a
\njuristicVVv’p.ers.on,  of the cheque, who would be<\/p>\n
the p_rivncipa’i~i o’1″fenVdeAr-?b The company being the drawer of<\/p>\n
 ‘=..tiiei..c’ne,,quewv, is thiep-riincipai offender as engrafted in Section<\/p>\n
y._’1′?~iV1′”of:”tbV.e\u00bb.}’1\\rjt;’–” However, the provision makes persons in<\/p>\n
cing-\ufb01gev_ofc::__that ji.iI’iSUC person iiable for consequent<\/p>\n
\\.,punisi’*.ment. In its terminoiogy, the provision expresses<\/p>\n
“–“_twh_igsi_ntention very clearly, as under:<\/p>\n
14-1. Offences by companies:\n<\/p>\n
(1) if the person cominitnng an offence under Section<\/p>\n
138 is a company, every person who, at the time<\/p>\n
(W<\/p>\n
1.”\n<\/p>\n
the offence was commltted, was in charge of, and
\nwas responsible to the company for the con”d*-act of<\/p>\n
the business of the company, as weE”E’~w.a’sV”t.he<\/p>\n
comparw, as weil as the coi’hpa%}y’;”‘shal_l’ -1:!_}e_<\/p>\n
deemed to be guslty of the offence’~-..andl.”sha!ll’  <\/p>\n
iiable to be proceeded”aga:’nst_..aAnd<_ puni\u00e9shed<\/p>\n
accordingty.\n<\/p>\n
Therefore, the principal offenlcler’being”‘th_Ve’vcorn\u00a7pany, the
\nperson in charge haa_._”‘:l)ee.;\u00a7  for consequential<\/p>\n
QtiTllSh:’Tl\u20ac!”llZ on Ax\/icarioos_,l’i_a.bilittyi\u00bb i’i’ivv’An’ijVl..Hacia case supra
\nthe Apex co_ai{t o\u00e9bselye-cl thtis (:_E3a_%a’x’12—-wand 13)
\n1 ._1Zffijhus.l”\\riheVn~’:V’t’heV”dravirerllof the cheque who
\n w\u00bb\u00e9tli,in  of \u00a7e”c”t”:o’n 138 of the Act is a
\nhumansbeangtozfb4’a,:bod”y’corporate or even \ufb01rm,
\nproselctition ‘as\u00a5\u00a2c\u00a7\u00e9’a}’n’g’5 can be initiated agalnst
\nA . such \u00e9ldtravwerpj. In–._l;h\u00e9s”conte><t the phrase "as well as"
\n  En lsuub.-s_e_ctv.on (1) of Sectlon 141 of the Act
\n _is'o.me importance. The said phrase would
\n '  persons ment\u00e9oned in the f\u00e9rst category
\nw\u00e9tnin the tentacles of the offence on a par wsth the
\novtteizdliswg company. Ssml\u00e9arly the words "shail aiso"
\nit v:n\u00ab:'sub~section (2) are capabie of bringing the third
\ncategory persons additionally within the dragnet of
\nthe offence on an equal par. The effect of reading
\nSection 141 is that when the company is the drawer<\/p>\n
of the cheque such company is the principal<\/p>\n
Bl"\n<\/p>\n
the penal iraprtrty created through the legai \ufb01ctron<\/p>\n
envisaged E\ufb02 Sectzon trail of the Act.\n<\/p>\n
13. The observations of the <\/p>\n
paragraph 33 of the judgment referred to <\/p>\n
adurrabrates if the offence was corhrrii’tt’ed by ~;c”i.1\u00a2.’C)b’23_’;,I,3xE3″l:1V”\\\/’ it.<\/p>\n
can be Dunished oniY if the ,ComDfarJ\\\/has pr0l,3.”\u00a2C’ri’teci,’=.4\\”8ta’t’–..<\/p>\n
instead of prosecuting the cor”*epe2.rey it’thVe=p.ayee’VVoVpts to if<\/p>\n
prosecute only the persons\u00b0'”fa’i\u00a7sirigVj”r~vy%thinf”2″”V and 3″
\ncategory the payee can  Case onty if he<\/p>\n
succeeds in sh.ow.i_n’t; thigit  offeri’c’e.,\u00e9_.sajactuatiy committed<\/p>\n
by the cOirr.pa;rr;y. 3Iif”th”e.V,sa’rhe”pa–ragraph, though the apex
\ncotrrt h’e\u00a7d”t’he not coirtain a condition that a<\/p>\n
prosecutionfof the cor”\u00a7?s;\u00a7an’y is sine–Qua–non for prosecution<\/p>\n
‘”~,of of,t’het._,V.persons’who faii within 2″‘; and 3″” categories<\/p>\n
  Yet in the same paragraph the Hon’b$e<\/p>\n
Ape;\u20ac”tCourt’i’,iijarsVheld “No doubt a finding that the offence<\/p>\n
rhwas n;oVrr:_mV%tted by the company is s\u00e9nacguaunon for<\/p>\n
A C_’con\\f\/”ii-cyting those other persons”. It is further held, if a<\/p>\n
company is not prosecuted due to any iegai snag or<\/p>\n
 otherwise, the other prosecuted persons cannot, on that<\/p>\n
&Q,\/<\/p>\n
iii
\nscore alone escape from the penal liability created through<\/p>\n
the iegai fiction envisaged in Section 141 of the A4c.tii*~..4_:F’rorn<\/p>\n
the discussions above it is clear that the burderfis’u~3p;o:nj’  <\/p>\n
complainant toestablish that duemto an’y”‘i~eg’al””s:n<\/p>\n
 Q}<\/p>\n
otherwise company is not prosecu’\u00bbt4ed;.:”‘fo–\u00a7* examp’ie”‘p:e..ndrAs;;3g<\/p>\n
adjudication of winding? V.-;ipv..___proceedingsjayga,i_VnVst:\\\u00a7 <\/p>\n
companies etc.,.\n<\/p>\n
14. In the instanvt-.c_as’ef”fact_s:.:’n.o;tV1’d_ii_spL;te{J are that
\nthough the;   winding up
\n company in company
\npetition” thewsaild”_petition came to be disposed
\nof, pe   and the accused company to<\/p>\n
reach _vamic’abl’e .sVe–ttle_mVe*ht in terms of which the accused<\/p>\n
coissillpagy was peVr’n”i*i’t”L’ed to pay the amount due by it in five<\/p>\n
egsL_.i’atet:\u00a7,_;9r;\u00bb.oli1.i;Vh’i–y installments. Therefore affirmatively it has<\/p>\n
to rvecotrdeld that no proceedings for winding up of the<\/p>\n
first ‘a_ci::Lised company was pending as on the date<\/p>\n
p.ros”ecution was initiated and has also on the date the<\/p>\n
 judgimient was rendered by the Trial Court. This makes lot<\/p>\n
of difference. Because as the company proceedings for<\/p>\n
&Q\/<\/p>\n
l9
\nwinding up of the conipany was not pending question of<\/p>\n
invoking Section 446 of the companies act did not\u00bb._4a’:-.i_se.<\/p>\n
Hence there was no legal snag to proceed _<\/p>\n
accused company. On this basis it\ufb01has to_-berv–h’:e!.cl ‘trhe.A’%’rig:ai*\u00ab.. <\/p>\n
Court on wrong presumption thatwirndingipp-..’p’roce:e_dings<\/p>\n
were pending against the first\u00ab-.._accu’s~ed cor”.r.i’p’\u00e9::’r}y_Vlgeplt titled.<\/p>\n
proceecl\u00e9ngs pending. As there vi:-ags no legalyil_n\ufb01pecf.’:iirnents or<\/p>\n
snag it was necessary’f’orT’the._Tr2i_alg’Cou.rt’~ro record finding as<\/p>\n
to whether the .:.harge.-aig.ai:nst*~ltgfor”voflfelnche under Section
\n1.38 of N\u20ac(_I}_Q..l’.l*3bl%fU:’f’lS’CF”LlPaiazeildt  vivaVVs”‘p’roved to indict other
\naccusediprin–ci_gp*le”‘Vloi– iyicari\ufb01otis liability, and Section<\/p>\n
1 41 oi?VV_l\\ie_gotiVa’\u00a73.le.. \ufb01ns\u00bbt’rc\u00ab:ii\u00bb_ri~i.e_r1t \u00a3:\\Ctk<\/p>\n
__1S. l\u00b0’~From_’V–_the above extraction, portion of the<\/p>\n
\u00abit isx”cl’ear’ that the company is the principal<\/p>\n
 offei1.d:e\u00abr:ia.n’dg:Vother categories of persons are offenders by<\/p>\n
iegaincu\u00a2n;7<\/p>\n
$6. Learned counsel for the respondent has placed<\/p>\n
%Heax}y reliance on the observation of the apex court to<\/p>\n
“contend that prosecution of the company is not at ail<\/p>\n
(lie,<\/p>\n
20<\/span>
\nnecessary and the complainant can proceed against two<\/p>\n
categories of persons without prosecuting the comp.a’nv,”..,E3e<\/p>\n
it on its own volition or be it due to any irTi,px_:’\u20ac..C\u00a7lI’Ti”Vei.n:t’ <\/p>\n
snag, E arn unable to accept this ,,contenti”o’n—obegcaeitise no<\/p>\n
proceeding in’view of Section 445 of C:o’n3paAr’riies.’Actand <\/p>\n
following paragraph 13 have niiobe read conjoiwijvitiyi vanti ngotiiinfv<\/p>\n
isolation: Consecguently, it  the
\nobservation made in  paragraph 13
\ndoes not have the haillifyin.g:’eff’e,ct_o’f.”th,e”.observation made
\nin i)aragra\u00a7_?i7.thei:.f:iVrst:.4V;”ifa,rt’Vioffparagraph 13. it,
\ntherefor_e,,_,Veisp\u00a7:,:g1’\u00a7\u00a7s_’ or otherwise, the
\nprosecitrted  from liability. The word
\nused ‘pr’ose:cutved”\u00ab:r’efers:”‘t:o4postwprosecution stage and not<\/p>\n
preg:.;\u00a7\u00a7’rosAecutio’ii-A Therefore, I am satisfied that if the<\/p>\n
 cotztt fiiids that the prosecution against the principal<\/p>\n
i”‘o_ffe.nder’:”a~:.qrj’drawer cannot be proceeded with by reason of<\/p>\n
legal re-striction and even then, the trial court is required to<\/p>\n
 record a ‘finding on fact about guilt of that guristicperson to<\/p>\n
\u00b0gir’os’ecute the category of persons recorded as observed by<\/p>\n
 “the apex court. In the instant case, the finding of guilt of<\/p>\n
8.9%<\/p>\n
7 l<\/p>\n
the company becomes a precondition for proceeding to
\npunish the person falling in the category referred____to in<\/p>\n
Section 14: of i\\i.I. Act.\n<\/p>\n
17. The learned trial judge has noticed <\/p>\n
on prosecution of the 3″” acci.ise’d””‘wh.ich h_.asAl’-not”b’eeh<\/p>\n
assailed. Since that finding is erro%\u00e9e_o’u-s,z the.’cooncii\u00abis”io”n..vof._<\/p>\n
the trial court that accused no’.~2]’i*s_liabletoubev.pVi;.nui’s’he’d, is’<\/p>\n
improper.\n<\/p>\n
18. For the reason-sfalfoflesaith”t_hez_’ijmgmgned order<\/p>\n
cannot be stist~va’i’n.eci–. \u00a5The r3natte’r’..r’e.qui:}*es reconsideration<\/p>\n
by the:’–.__ trial lgcourt.”<ACco'rd_in-glly, the revision petition is
\nallowed. The~ii"np'i;ig'r'ied.. is set aside so far as sentence<\/p>\n
of a\u00bbccu'se.ci no.'2~.Vcon'cerned. Ttte matter is remanded to<\/p>\n
 _tri.al_1"court-tvo proceed against the first accused company<\/p>\n
land'l'.t_Vhle}w. .\u00a7'o.,v_pro'ceed against accused no.2, in the light of the<\/p>\n
decis-ions-..'"of'vthe apex court referred to above, by passing<\/p>\n
it    pprop riate ord ers.\n<\/p>\n
19. It is submitted that ttte matter is pending for<\/p>\n
 quite some time and time .be fixed. Accorclingl\\,1, four<\/p>\n
(W<\/p>\n
T3″)<\/p>\n
mcmths time from the date of {eceipt of a copy of this hprder<\/p>\n
is granted to dispose of the matter.\n<\/p>\n
vgh*,fGH<\/p>\n","protected":false},"excerpt":{"rendered":"
Karnataka High Court M R Patel Former Managing Director vs M\/S R K Synthetics & Fibres Pvt Ltd on 24 September, 2008 Author: Jawad Rahim \u00a7 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 24?” DAY OF SEPTEMBER 20,98-.’:’_”I..D_ BEFORE THE HON’BLE MR. 3DST1cE>;AwAD–EA–I\u00a7{IA\/I’*5: 1′ CRL.R.P. NO. 18f3.\u00a73\/2Q_gE\u00a7 4′ BETWEEN 1 (By […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,20],"tags":[],"class_list":["post-191580","post","type-post","status-publish","format-standard","hentry","category-high-court","category-karnataka-high-court"],"yoast_head":"\nM R Patel Former Managing Director vs M\/S R K Synthetics & Fibres Pvt Ltd on 24 September, 2008 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/m-r-patel-former-managing-director-vs-ms-r-k-synthetics-fibres-pvt-ltd-on-24-september-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M R Patel Former Managing Director vs M\/S R K Synthetics & Fibres Pvt Ltd on 24 September, 2008 - 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