CASEBRIEF-1
CASE NAME: Aneeta Hada Vs Godfather Travels and Tours Private
Criminal Appeals Nos. 838 and 842 of 2008 & 1483 and 1484 of 2009
COURT: Supreme Court of India
YEAR: 2009- accused
FACTS
The appeals concern the prosecution of an authorized signatory of a company
under Section 138 of the Negotiable Instruments Act, 1881 without the
company being arraigned as an accused.
Two-Judge Bench initially heard the appeals and found a difference of opinion
in the interpretation of Sections 138 and 141 of the Act.
In separate appeals, a Director of a company was prosecuted under Section
292 of the Penal Code, 1860 and Section 67 of the Information Technology
Act, 2000 without the company being named as an accused.
The complaint petition did not include the company as an accused, yet the
Magistrate took cognizance against the appellant-accused.
ISSUES
Whether an authorized signatory can be held liable for prosecution under
Section 138 of the Negotiable Instruments Act without the company being
arraigned as an accused.
Interpretation of Section 85 of the Information Technology Act in relation to
the liability of a company and its officers.
PETITIONER ARGUMENTS -
The company was not arraigned as an accused, therefore the legal fiction in
Section 141 of the Act does not apply.
Citing Anil Hada v. Indian Acrylic Ltd. to argue that without the company being
made an accused, the signatory cannot be prosecuted.
RESPONDENT ARGUMENTS -
A signatory of a cheque is responsible for the incriminating act, and thus a
complaint under Section 138 is maintainable against the Director or
authorized signatory.
Section 141 does not preclude separate prosecution of the Director or
signatory without the company being an accused.
HOLDING: The appeals are allowed, and the proceedings initiated under Section 138
of the Act are quashed.
REASONING-
The language of the provisions indicates that the company is the principal
offender, and without its prosecution, the individual cannot be held liable.
The interpretation of Sections 138 and 141 should favor the paying
complainant to discourage dishonor of cheques.
The legislative intent is to impose liability on the signatory while ensuring that
the company, as the principal entity, must also be prosecuted for corporate
criminal liability.
The legal fiction created by Section 141 allows for the prosecution of
individuals in charge of the company, but certain conditions must be satisfied.
CASE BRIEF--2
CASE NAME- N. Harihara krishnan vs. J. Thomas
FACTS -
The appellant is the managing partner of a firm, while the respondent is
the power of attorney holder for the managing director of NORTON.
A cheque was handed over to the respondent through an unknown
person at the Chennai High Court premises.
The cheque in question was drawn by a private company, DAKSHIN,
which is a third party to the sale transactions.
The cheque was allegedly signed by the appellant in his capacity as the
Director of DAKSHIN.
The appellant would only be vicariously liable for any offence
committed by DAKSHIN.
An application under Section 319 of the CrPC sought to implead
DAKSHIN, filed three years after the expiry of the 15-day period
stipulated under clause (c) of the proviso to Section 138.
ISSUES
Whether the application to implead DAKSHIN was permissible given
the delay in filing.
Whether the liability of the appellant as a director of DAKSHIN is
statutory and vicarious.
Whether the High Court correctly concluded that the revision filed by
the petitioner was not maintainable.
PETITIONER ARGUMENTS -
The trial court erred in allowing the application to implead DAKSHIN.
The High Court failed to appreciate the appellant's liability is only
statutory as the Director of DAKSHIN.
The CrPC regulates procedures for investigation, and punishment can
only be inflicted by a competent court.
RESPONDENT ARGUMENTS -
The respondent made a case for condonation of the delay in filing the
application.
The trial court's observation on Section 142(b) indicates no separate
petition is required after cognizance of the offence.
HOLDING-The judgment under appeal is set aside, and the appeal is
allowed.
REASONING -
Section 142 of THE ACT stipulates that no court shall take cognizance
of any offence punishable under Section 138 unless a complaint is made
within one month of the date on which the cause of action arises.
The offence under Section 138 can only be committed by the drawer of
the cheque, which is DAKSHIN in this case.
The High Court's conclusion that the revision filed by the petitioner is
not maintainable because DAKSHIN did not challenge the trial court's
order is flawed.
The judgment is contrary to the language of THE ACT and previous
rulings, thus cannot be sustained.