Case Note & Summary
The judgment arises from two criminal writ petitions filed by the petitioners, who are directors of a co-operative society, challenging the orders passed by the learned Additional Sessions Judge, Greater Mumbai, in Criminal Revision Application Nos.1234 of 2016 and 1235 of 2016. The revisional court had dismissed the revision applications and affirmed the orders dated 4th January 2016 passed by the learned Metropolitan Magistrate, 33rd Court, Ballard Pier, Mumbai, in Criminal Complaint Nos.8222/SS/2015 and 8223/SS/2015, whereby process was issued against the accused-petitioners for the offence punishable under Sections 138 read with 141 of the Negotiable Instruments Act, 1881. The respondent No.1-complainant is a company registered under the Companies Act, 1956, engaged in trade of various commodities such as sugar, molasses, alcohol and chemicals. The petitioner No.1 is a Co-operative Society registered under the Maharashtra Co-operative Societies Act, 1960. The complainant alleged that the society had issued cheques which were dishonoured. The petitioners contended that they were not in charge of the day-to-day affairs of the society and that the complaint lacked specific averments to attract vicarious liability under Section 141 of the NI Act. The court, after considering the submissions, held that the revisional court had correctly affirmed the issuance of process as the complaint contained sufficient averments that the petitioners were directors and were responsible for the conduct of the business. The court dismissed the petitions, upholding the orders of issuance of process.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Vicarious Liability of Directors - Section 141 NI Act - The court considered whether the petitioners, being directors of a co-operative society, could be prosecuted for dishonour of cheques issued by the society. The court held that for vicarious liability under Section 141, the complaint must contain specific averments that the accused was in charge of and responsible for the conduct of the business of the society at the time the offence was committed. (Paras 1-27) B) Criminal Procedure Code - Issuance of Process - Prima Facie Case - Section 204 CrPC - The court examined the scope of revisional jurisdiction against an order issuing process. It held that at the stage of issuance of process, the magistrate need only be satisfied that there is sufficient ground for proceeding, and the revisional court should not interfere unless the order is perverse or without jurisdiction. (Paras 3-27) C) Co-operative Societies Act - Prosecution of Directors - Maharashtra Co-operative Societies Act, 1960 - The court noted that the petitioners were directors of a co-operative society and the cheques were issued by the society. The court held that the directors of a co-operative society can be prosecuted under Section 141 NI Act if they were in charge of and responsible for the conduct of its business. (Paras 4-27)
Issue of Consideration
Whether the learned Additional Sessions Judge was justified in dismissing the revision applications and affirming the order of issuance of process against the petitioners for the offence punishable under Sections 138 read with 141 of the Negotiable Instruments Act, 1881.
Final Decision
Both criminal writ petitions are dismissed. The orders passed by the learned Additional Sessions Judge, Greater Mumbai, in Criminal Revision Application Nos.1234 of 2016 and 1235 of 2016, affirming the orders dated 4th January 2016 passed by the learned Metropolitan Magistrate, 33rd Court, Ballard Pier, Mumbai, in Criminal Complaint Nos.8222/SS/2015 and 8223/SS/2015, are upheld.
Law Points
- Vicarious liability under Section 141 NI Act requires specific averments of role in day-to-day affairs
- Directors of co-operative society can be prosecuted if they were in charge of and responsible for conduct of business
- Process can be issued if complaint makes out prima facie case
