ORDER
V. Eswaraiah, J.
1. All the four Criminal Petitions are filed under Section 482 of Code of Criminal Procedure by the same accused No. 1 in four different Calendar Case Nos. 628, 629, 552 and 573 of 1999 on the file of VIII Metropolitan Magistrate, Gajuwaka, to quash the said calendar cases against him.
2. The offence alleged to have been committed by the petitioner is under Section 138 read with Section 142 of Negotiable Instruments Act. The petitioner is arrayed as Manager of Leafin India Limited (hereinafter referred as the Company') of Visakhapatnam branch. The Divisional Manager, the whole time Director and the Chairman-cum-Managing Director of the Company, were also arrayed as accused Nos. 2, 3 and 4. The four different bearers of different cheques filed the said four different complaints, alleging that the petitioner herein/accused No. 1 is the Area Manager, accused No. 2 is the Divisional Manager, accused No. 3 is the whole-time Director of the company and accused No. 4 is the Chairman-cum-Managing Director, and their office is situated at Domulguda in Hyderabad and the business of their company is to collect deposits and repay the same with interest, etc.
3. The complainants alleged that their amounts were deposited in the company towards short-term deposits and after receiving the said amount by the 1st accused, the 4th accused issued cheques to the complainants through the 1st accused at complainants' residence. It is also alleged by the complainants that they made correspondence through the 1st accused. When the complainants presented the said cheques for collection, the same were dishonoured due to the reason 'exceed arrangements'. The complainants made correspondence with the 1st accused and demanded for the amounts covered by the abovementioned cheques by way of legal notices, which were returned unserved and accused never received the same. Thus, all the accused have committed the offence punishable under Section 138 of Negotiable Instruments Act and they are liable to be punished.
4. It is not in dispute that the petitioner-accused No. 1 is the Area Manager of the Company for Visakhapatnam Branch and he is looking after its affairs. The allegations made in the complaints are not disputed. It is also not in dispute that the cheques issued by the Company through the petitioner were dishonoured for the reason 'funds insufficient'. Some of the notices sent to the petitioner were returned as not claimed.
5. Learned Counsel appearing for the petitioner vehemently argued that even assuming for a moment that the complaint on its entirety, if taken into account, no case is made out against as far as the petitioner is concerned, and, therefore the criminal cases filed against him are liable to be quashed.
6. On the other hand, the learned Counsel for the respondent addressed arguments to the effect that the petitioner is also responsible for committing the said offence as the said cheques were issued with his knowledge and he knows fully well that there were no sufficient funds in the account of the accused and, therefore, he is also liable for the said offence.
7. Section 138 of Negotiable Instruments Act (for short, the Act) speaks to the effect that where any cheque drawn by a person for payment of any amount to another person from out of the account for the discharge, in whole or in part of any debt or other liability, and if the said cheque is returned by the Bank dishonoured on account of the insufficient funds, such person shall be deemed to have committed an offence and shall be liable for imprisonment for a term which may extent to one year, or with fine which may extend to twice the amount of the cheque, or with both.
8. Under Section 139 of the Act, it shall be presumed, unless the contrary is proved that the holder of the cheque received the cheque of the nature referred to in Section 138 of the Act, for the discharge in whole or in part of any debt or other liability.
9. A reading of Section 140 of the Act, makes it clear that there cannot be any defence in any prosecution, for an offence punishable under Section 138 of the Act, that the drawer had no reason to believe that at the time of issuance of the cheque the same may be dishonoured on its presentation for the reasons stated in Section 138 of the Act. Insofar as the Negotiable Instruments are concerned, certain presumptions are laid down under Section 118 of the Act, until the contrary is proved, the presumptions in favour of the holder of the cheque as regards the consideration, date, time of acceptance, time of transfer, order of endorsement, and holder is a holder in due course, etc., hold good.
10. The question that arises for consideration is that if a cheque issued by an individual person, there would not be any difficulty in dealing with the liability of that individual, but in the instant case the cheques were issued by a company and, therefore, the connotation of the person is expanded and has to be dealt with the liability of such person under Section 141 of the Act.
11. As per the explanation to Section 141(2) of the Act, 'company' means any body corporate and includes the Company or other association of individuals; and 'director' in relation to a firm means a partner in the firm.
12. Under Section 141(1) of the Act, if the person committing the offence under Section 138 of the Act is a company, every person who, at the time of the offence committed, was in charge 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. As per the proviso to Section 141(1) of the Act, any such person liable to punishment under Section 141, if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence, he shall be exonerated and such defence is available for the persons who are in-charge and responsible to the company for conduct of the business of it.
13. I am of the opinion that under Section 141 of the Act, the person whoever is in-charge of and responsible to the company for the conduct of its business, the company as well as such persons are deemed to be guilty of the offence and they are liable to be prosecuted, and whoever is not in charge and responsible to the company for the conduct. of its business, will not come under the ambit of Section 141 of the Act for committing the offence.
14. Responsible for the company for the conduct of its business means whoever is in direct management of affairs of the business of the company. If it is a firm, the Managing Committee will be taking necessary resolutions and lay down policy decisions for conduct of business of the firm and in case of a company, the Board of Directors will be taking policy decisions and pass necessary Resolutions in the Minutes of the meeting for the conduct of the business and the Management is responsible to the company for the conduct of its business. Therefore, under Section 141 of the Act, all set of those persons, who are responsible for the conduct of the business of the company, shall be deemed to be guilty of the offence under Section 138 of the Act. If any of the Partners or Directors who conducts the affairs of the Company or Firm or other Association of individuals, are also entitled to lead evidence to rebut the general presumptions that they had not exercised all the due diligence to prevent the commission of such offence and if they prove that the offence was committed without their knowledge and in spite of their exercising all due diligence to prevent the same, it is open for them to prove the same. Therefore, Section 141(1) of the Act deals with the persons, who are in management of the conduct of the business of the Company or Firm or Association of individuals.
15. Section 141(2) of the Act deals with other persons, who are associated with the company for the conduct of its business activities such as the Director, Manager, Secretary or other Officer of the Company. Any person whether he is a Director or Manager or any other person of a company, who is not in Management or responsible to the Company for the conduct of business, is also liable for the offence punishable under Section 138 of the Act, provided there is evidence to show that such offence was committed with consent, connivance or attributable to, and negligence on the part of such Director, Manager, Secretary or other Officer of the Company. If there is any proof to show that there is consent or connivance or the evidence, the offence is also attributable to such persons, are also deemed to be guilty of such offence are liable to be proceeded and punished.
16. The averments made in the complaints goes to show that the offence committed by the company is also attributable to the petitioner as he is managing the Branch Office of the company at Visakhapatnam, money was given to him, cheque of the company was given by him and he also knows about the insufficient funds available in the account of the company, etc. and, therefore, based on the averments made in the complaints, it cannot be said that the offence is not at all attributable to the petitioner. If on evidence it is proved on the strength of the complaints alleged by the complainants that the offence has been committed by the company and the offence is also attributable to the petitioner for the said offence, he is also liable to be prosecuted and punished accordingly.
17. The question that arise for consideration in the instant cases is as to whether the Area Manager of the company falls either under the provisions of Section 141(1) or under Section 141(2) of the Act.
18. I am of the considered opinion that the petitioner, who is in-charge and Branch Manager of the Branch Office of the Company at Visakhaptnam, cannot be said that he is responsible to the company for the conduct of its business. Conduct of the business for the company means, the action taken by the Management of the Company or the Firm or Association of individuals.
19. There is no allegation that the petitioner is a Director or Partner of the Firm or Manager of the Association, but he is Manager of a Branch of the said Company and, therefore, it cannot be said that he is responsible to the company for the conduct of its business, hence, the action of the petitioner falls under Section 141(2) of the Act, which speaks to the effect that if the said offence is committed with the connivance or consent or is attributable to or any neglect on the part of the Manager, he is also deemed to have committed the offence.
20. If the offence is attributable to the petitioner, he is also liable for the offence punishable under Section 138 of the Act. There is clear allegation made in the complaint that the money was given to the petitioner and cheques were handed over by the petitioner and the petitioner is fully aware that there are no sufficient funds in the Bank and therefore the offence was also attributable to the petitioner.
21. However, whether there is any thing attributable to the petitioner or whether there is connivance or consent or any negligence on the part of the petitioner, is a matter to be considered by the Trial Court during the course of inquiry. If the offence is attributable to the petitioner, he is also deemed to have committed an offence punishable under Section 141(2) of the Act.
22. Therefore, I am of the opinion that this Court under Section 482 of Code of Criminal Procedure cannot exercise its powers and discharge the petitioner from the accusation of committing an offence punishable under Section 138 of the Act.
23. The Apex Court while dealing with a similar issue in Raj Lakshmi Mills v. Shakthi Bhakoo, : (2002)8SCC236 , held as follows :
'At the stage of summoning when evidence was yet to be led by the parties, the High Court could not on an assumption of facts come to a finding of fact that the accused was not responsible for the conduct of the business and discharge the accused'.
In the instant case, whether there is anything attributable to the petitioner and if complainants are able to prove the same, the petitioner is also deemed to have committed an offence and is liable to be punished, hence it is just and proper for the petitioner to face the trial in all the criminal cases as this Court could not find any evidence let in to come to a conclusion that anything is attributable to the petitioner or not for committing an offence punishable under Section 138 of the Act.
24. For the aforesaid reasons, all the Criminal Petitions are dismissed and the Trial Court is directed to dispose of all the said criminal cases, as expeditiously as possible, without getting influenced by any of the observations made in this order.