Mukesh Goyal, Proprietor M/s Anupam Enterprises vs Jain Carbon Pvt. Ltd. and Others

J.D. Kapoor, J.—A complaint was filed by the petitioner u/s 138 of the Negotiable Instruments Act against respondent no. 1-company and its three directors. All the three directors are members of the same family. The cheque was issued by one of the directors namely Mr. Manish Jain for and on behalf of the Company. After perusal of the preliminary evidence, the learned trial court issued process/summons against the company and the director Manish Jain only who had issued the cheque on behalf of the company. The grievance of the petitioner is that all the remaining directors should also have been summoned as there is presumption that each and every director of the Company is responsible for its affair and is liable for its acts of omission and commission. I am afraid this concept is entirely misconceived. Had there been any such concept, there was no purpose for bringing Section 141 of the Negotiable Instruments Act on the statute book. Section 141 deals with the "offences committed by the Company. There is a specific stipulation that if a person committing an offence u/s 138 is a Company, every other persons who at the time the offence was committed was incharge of and was responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Bare perusal of the aforesaid provisions shows that onus lies upon the complainant to show that each and every director was incharge of and was responsible to the conduct of affairs of the Company.

In the instant case company appears to be a family company. However, there is a presumption against a person who issues cheque on behalf of the company that he is incharge of and responsible to the affairs of the company. In the absence of any evidence to the effect that other directors were also incharge of and responsible to the affairs of the company, other persons cannot be prosecuted for the offence u/s 138 of the Negotiable Instruments Act. The intention of the legislature was very clear that if the company happens to have large number of directors, it cannot be presumed by any stretch of imagination that all directors are by virtue of their office incharge of and responsible to day to day affairs of the company and conduct of its business.

Had it not been so where was the need to specifically provide that if the offence is committed by a Company, every other person who was incharge of and responsible to the affairs of the Company shall be deemed to be guilty of the offence. Simpliciter directorship of the company does not entail any liability much less the liability of the prosecution for the offence u/s 138 of the Negotiable Instruments Act which has attained the colour of criminal offence. To prosecute each and every director is nothing but to convert or make the proceedings u/s 138 vicarious and vexatious and in derogation of the provisions of the Section 141 of the Act.

Even otherwise scope of Section 482 Cr.P.C. is very limited. This provision can be invoked only to secure ends of justice and to rectify patently illegality. The trial court on the basis of record deemed one of the directors as a person incharge of and responsible to the affairs of the Company and therefore issued the process. Foregoing reasons persuade me to decline interference. Petition has no merit and is dismissed.