Amar Priyadarshi Alias Priyadarshi Amar Vs The State Of Jharkhand And Anr.

IN THE HIGH COURT OF JHARKHAND AT RANCHI Cr. Revision No. 1205 of 2016

Amar Priyadarshi @ Priyadarshi Amar, son of Sri B.C. Thakur, Director, Vatan Desire Info Tech (Pvt.) Ltd. Karrox, 4^th Floor, Pradhan Tower, Main Road, P.O. G.P.O. P.S. Lower Bazar, DistrictRanchi … … Petitioner

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… … Petitioner

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Versus

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The State of Jharkhand

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Darshan Singh Monga, son of Late Mangal Singh Monga, C/o Harinder Singh, 933, Gossain Tank Road, Chutia, Ranchi, P.O. and P.S. Chutia, District Ranchi

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… … Opp. Parties ---

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CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY

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--For the Petitioner : Mr. Pandey Neeraj Rai, Advocate For the State : Mr. Praful Jojo, APP For the O.P. No. 2 : Mr. Sahil, Amicus ---

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20 /27.08.2024 Heard the learned counsel for the parties.

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2. This revision is directed against the judgment and order dated 19.5.2016 passed in Criminal Appeal No. 274/12 by the learned Court of learned Additional Judicial Commissioner-IV, Ranchi whereby the appeal has been dismissed. The petitioner has been convicted vide judgment and order dated 16.10.2012 passed in Complaint Case No. C-256/01 by the learned Judicial Magistrate, 1st Class, Ranchi, whereby and whereunder the petitioner has been held guilty for the offence under Section 138 of Negotiable Instrument Act and sentenced to undergo R.I. for six months and to pay Rs.6,10,000/- as compensation.

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3. Learned counsel for the petitioner while assailing the impugned judgement has submitted that the complaint was filed against the company and his Ex-Director in connection with bouncing of cheques issued by the company under the signature of the Director, the petitioner herein. He has submitted that the charge was framed for the offence under Section 420 IPC & 138 of the Negotiable Instruments Act only against the petitioner and ultimately the petitioner has been convicted only for the offence under Section 138 of the Negotiable

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Instruments Act and has been acquitted for the offence under Section 420 of IPC.

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4. The learned counsel submits that the cheques were issued for discharge of liability of the company though under the signature of the petitioner. The learned counsel submits that in absence of any charge having been framed against the company, the conviction of the petitioner for the offence under Section 138 of the Negotiable Instruments Act cannot be sustained in the eyes of law. Learned counsel has referred to the judgment passed by the Hon’ble Supreme Court in the case of Aneeta Hada versus Godfather Travels and Tours Private Limited reported in (2012) 5 SCC 661 and has submitted that it has been finally held that the prosecution against the Director or Authorized signatory of the cheque without arraying the company as an accused is not maintainable. He submits that in the present case, though the company was made a co-accused along with the petitioner, but neither any charge was framed against the company nor the company faced the trial. He submits that accordingly, the company having not been proceeded against by the trial court, there was no occasion to convict the petitioner who was admittedly a Director of the company and had issued the cheques in the capacity of the Director of the company. The learned counsel submits that the vicarious liability cannot be fastened upon the petitioner in absence of conviction of the company as well.

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5. The learned counsel has relied upon the judgment passed by the Hon’ble Supreme Court reported in 2022 SCC Online SC 579 (Dilip Hariramani versus Bank of Baroda) and has referred to paragraph 16 thereof to submit that the provision of Section 141 of Negotiable Instruments Act imposes vicarious liability by deeming fiction which presupposes and requires the commission of offence by the company or the firm and unless the company or the firm committed the offence as a principal accused, the persons mentioned in sub section (1) and sub section (2) would not be liable and convicted as vicariously liable. 6. The learned counsel while referring to the cross examination of the complainant has referred to paragraph 3 and has submitted that the

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complainant has specifically stated that the accused had issued the cheques to the complainant in the capacity of the Director of the Company. The learned counsel submits that the cheques having been issued on behalf of the company under the signature of the petitioner being a Director the company, the company having not been convicted, the conviction of the petitioner cannot be sustained in the eyes of law.

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Argument of the learned amicus representing the opposite party no.2

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7. The learned Amicus representing opposite party No. 2 has opposed the prayer and has submitted that this point was nowhere taken by the petitioner before the courts concerned. However, the submissions as advanced by the counsel for the petitioner by referring to the materials on record particularly the fact that no charge was framed against the company and also the fact that during cross examination the complainant had specifically stated that the cheques were issued by the petitioner as a Director of the Company is not in dispute.

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Findings of this court.

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8. After hearing the learned counsel for the parties and considering the facts and circumstances of this case, this court finds that the complaint case number 256 of 2001 was filed against two accused namely the petitioner Amar Priyadarshi @ Priyadarshi Amar as accused no. 1 in the capacity of the Director of Vatan Desire Info Tech Pvt. Ltd. and also against the drawer company, namely Vatan Desire Info Tech Pvt. Ltd. as accused no. 2 through its Director-Amar Priyadarshi. Admittedly the accused no. 2 was the company and the petitioner [the accused no. 1] was the Director of the company. The alleged offence was under Sections 420/406 of Indian Penal Code and Section 138 of the Negotiable Instruments Act.

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9. The specific case of the complainant was that the complainant along with one M/s. Taranjeet Kaur was running a management institute in which they invested amount through different agencies and the institute was well furnished and well equipped. After death of Ms.

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Taranjeet Kaur on 19.05.1997 the complainant started facing difficulties in running the institute because of his old age and ailments. Thereafter on 15.12.1999 the accused no. 1 i.e. the petitioner being the Director of accused no. 2 approached the complainant with an offer to purchase the furniture, fixtures, fittings etc. for a total consideration of Rs. 13.5 lacs to which the complainant agreed and thereafter the accused no. 1 paid a sum of Rs. 20,000/- as advance, Rs. 10,000/- as miscellaneous expenses and handed over three post dated cheques for Rs. Six lacs, five lacs and Rs. Two lacs thirty thousand dated 10.01.2000, 30.01.2000 and 10.02.2000 respectively drawn on Bank of India. Thereafter the fresh cheques were issued in the month of August 2000 to the extent of Rs. 7,50,000/- in the name of Harinder Singh Jaggi and Rs. Six lacs in the name of the complainant. The amount of Rs. Six lacs were through three post-dated cheques of two lacs each dated 05.09.2000, 06.09.2000 and 07.09.2000. It was these cheques which were dishonored on account of insufficient funds in the account of the company. The reason for dishonor was 'exceed arrangements'. These cheques were again presented and again they bounced on account of 'insufficient fund' and ultimately the complainant issued legal notice by registered cover and when the amount was not paid, the complaint case was lodged against the company as well as its director who were made accused no. 2 and 1 respectively in the complaint case.

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10. This court finds from the record that the charge was framed only against the accused no. 1 i.e. the Director of the company who faced the trial and was convicted. The fact remains that neither the charge was framed against the company nor the company faced the trial and, in such circumstances, the only point which calls for consideration is as to

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' whether the conviction of the petitioner who was the director of the company can be sustained without the company having been convicted in the criminal case'.

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11. In view of the judgment passed by the Hon’ble Supreme Court in the case of Aneeta Hada (supra) it has been clearly held that

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commission of offence by company is an express condition precedent to attract the vicarious liability of others and the word ‘as well as the company’ appearing in Section 141 of the Negotiable Instruments Act makes it absolutely unmistakably clear that when the company can be prosecuted then only the person mentioned in other category could be vicariously liable for the offence subject to averment in the petition and the rule thereof. Paragraph 58 and 59 of the said judgment is quoted as under: -

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“58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words “as well as the company” appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted.

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59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh (1970) 3 SCC 491 which is a threeJudge Bench decision. Thus, the view expressed in Sheoratan Agarwal (1984) 4 SCC 352 does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada (2000) 1 SCC 1 is overruled with the qualifier as stated in para 51. The decision in Modi Distillery (1987) 3 SCC 684 has to be treated to be restricted to its own facts as has been explained by us hereinabove.”

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12. In the aforesaid judgement passed in the case of Aneeta Hada (supra), one exception has been carved out , that is, the matter would stand on a different footing where there is some legal impediment and

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the doctrine of 'lex non cognit ad impossibilia' gets attracted. Paragraph 51 of the aforesaid judgement is quoted as under:-

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“51. We have already opined that the decision in Sheoratan Agarwal runs counter to the ratio laid down in C.V. Parekh which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in Anil Hada has to be treated as not laying down the correct law as far as it states that the Director or any other officer can be prosecuted without impleadment of the company. Needless to emphasise, the matter would stand on a different footing where there is some legal impediment and the doctrine of lex non cogit ad impossibilia gets attracted."

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13. In the judgment passed by the Hon’ble Supreme Court reported in 2022 SCC Online SC 579 [Dilip Harirawani versus Bank of Baroda] , the aforesaid view has been reiterated in paragraph 16 after referring to the judgement passed in the case of Aneeta Hada (supra) in paragraph 15 of the judgement . Paragraph 16 of the judgement is

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quoted as under:-

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"16. The provisions of Section 141 impose vicarious liability by deeming fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub-section (1) or (2) would not be liable and convicted as vicariously liable. Section 141 of the NI Act extends vicarious criminal liability to officers associated with the company or firm when one of the twin requirements of Section 141 has been satisfied, which person(s) then, by deeming fiction, is made vicariously liable and punished. However, such vicarious liability arises only when the company or firm commits the offence as the primary offender. This view has been subsequently followed in Sharad Kumar Sanghi v. Sangita Rane , Himanshu v. B. Shivamurthy , and Hindustan Unilever Limited v. State of Madhya Pradesh . The exception carved out in Aneeta Hada (supra), which applies when there is a legal bar for prosecuting a company or a firm, is not felicitous for the present case. No such plea or assertion is made by the respondent.”

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14. The evidence as pointed out by the learned counsel for the petitioner which has come up in the cross examination of the complainant which clearly indicates that the complainant had categorically mentioned that the cheques were issued by the petitioner in the capacity of the Director of the company. No material from the record has been pointed out by the learned amicus representing the opposite party no.2 to bring the case within the exception to the

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general principle 'vicarious liability of the director arises only when the company or firm commits the offence as the primary offender.' There being no material regarding any legal impediment or otherwise to proceed against the company, the case is guided by the aforesaid general principles of vicarious liability. The fact remains that the case was filed against the director as well as the company for alleged offence under section 420 IPC and 138 of Negotiable Instruments Act, 1881 but no cognizance was taken against the company and the petitioner faced the trial and was convicted only under section 138 of Negotiable Instruments Act, 1881.

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15. Considering the aforesaid judgment passed by the Hon’ble Supreme Court it is amply clear that if the cheques are issued by a person in the capacity of a director of the company and the cheques are drawn on the company, then the conviction of the director cannot be sustained in absence of conviction of the company. The question of liability of the Director arises only in the capacity of vicarious liability provided the company is also held liable for offence under Section 138 of the Negotiable Instruments Act. The company having not been proceeded, there was no occasion to convict the company and consequently only the Director of the company, who is the petitioner before this court, faced the trial and was convicted for offence under section 138 of Negotiable Instruments Act , 1881 with respect of bouncing of cheque issued and signed in the capacity of the Director of the company.

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16. Considering the totality of the facts and circumstances of this case and after carefully going through the records this court is of the considered view that the conviction of the petitioner who was Director of the company and had issued the cheques in the capacity of the Director of the company against an account maintained by the company, his conviction cannot be sustained in the eyes of law as the company has not been convicted, though the company was made a coaccused in the complaint case but no charge was framed against the company. This court has also seen the original cheques which are available on record which itself indicates that the cheque were issued

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under the signature of the petitioner in the capacity of the director of the company. There is no doubt that the petitioner had not raised such point before the learned courts but the aforesaid points being pure question of law and it touches upon rights and liberty of the petitioner, who had issued the cheques as a Director of the company, can certainly be considered by this Court on account of aforesaid admitted facts of the case. This court is of the considered view that the conviction of the petitioner calls for interference in revisional jurisdiction to prevent miscarriage of justice.

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17. Accordingly, the impugned judgment dated 16.10.2012 passed in Complaint Case No. C-256/01 by the learned Judicial Magistrate, 1st Class, Ranchi, and the judgment dated 19.5.2016 passed in Criminal Appeal No. 274/12 by the learned Court of learned Additional Judicial Commissioner-IV, Ranchi are hereby set aside and the petitioner is discharged from the liability of the bail bonds furnished by him.

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18. This Court observes that vide order dated 27.04.2023, Mr. Sahil, Advocate was appointed as Amicus Curiae in this case by this Court. This Court records its appreciation for the valuable assistance accorded by the learned Amicus Curiae in final disposal of this case. The Member Secretary, Jharkhand State Legal Services Committee is directed to ensure that the legal remuneration of the learned Amicus Curiae is duly paid to him within a period of 4 weeks upon submission of bills by him @ Rs. 5500/- per day subject to the cap of maximum permissible amount.

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19. The office is directed to provide a copy of this order to Mr. Sahil, the learned Amicus Curiae and also to the Secretary, Jharkhand High Court Legal Services Committee.

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20. Pending I.A., if any, is closed.

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21. Let this order be communicated to the court concerned through FAX.

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(Anubha Rawat Choudhary, J.)

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Binit

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Amar Priyadarshi Alias Priyadarshi Amar v. The State Of Jharkhand And Anr.

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Amar Priyadarshi Alias Priyadarshi Amar v. The State Of Jharkhand And Anr.

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