Case Note & Summary
The case involves two criminal revisions filed by Shyamrao Borghare and Mahadeo Jibhkate against the order of the Additional Sessions Judge-8, Nagpur, who set aside the process issued by the Magistrate against the non-applicant Narendramal Bafna in complaints under Section 138 of the Negotiable Instruments Act, 1881. The applicants were employees of Coventry Spring Engineering Limited, and the non-applicant was a Director of the company. The non-applicant issued cheques dated 19.2.2007 and 16.2.2007 for Rs.1,25,373/- and Rs.80,559/- respectively towards unpaid wages of the applicants. The cheques were dishonoured. The Magistrate, after considering the complaint and evidence, issued process against the non-applicant by order dated 16.11.2007. The non-applicant filed revisions before the Additional Sessions Judge, who set aside the process on the ground that the complaint lacked an averment that the Director was responsible for day-to-day transactions of the company. The High Court held that at the stage of issuance of process, the Magistrate need only be satisfied that there is sufficient ground for proceeding. The complaint and evidence disclosed that the cheques were signed by the Director for unpaid wages, which was sufficient to proceed. The High Court allowed the revisions, set aside the revisional court's order, and restored the Magistrate's order issuing process.
Headnote
A) Criminal Procedure Code - Issuance of Process - Section 138 Negotiable Instruments Act, 1881 - Vicarious Liability of Director - The revisional court set aside the process issued by the Magistrate on the ground that the complaint did not contain specific averment that the Director was responsible for day-to-day transactions of the company. The High Court held that at the stage of issuance of process, the Magistrate need only be satisfied that there is sufficient ground for proceeding, and the absence of a specific averment is not fatal. The complaint and evidence disclosed that the cheques were signed by the Director for unpaid wages, which was sufficient to proceed. (Paras 4-6) B) Negotiable Instruments Act, 1881 - Section 138 - Dishonour of Cheque - Director's Liability - The High Court held that the requirement of a specific averment regarding the Director's role in day-to-day affairs is not mandatory at the stage of issuance of process. The Magistrate's order issuing process was reasoned and based on material on record. The revisional court erred in interfering with the same. (Paras 5-6)
Issue of Consideration
Whether the Additional Sessions Judge was correct in setting aside the process issued by the Magistrate on the ground that the complaint lacked specific averment that the Director was responsible for day-to-day affairs of the company.
Final Decision
Both criminal revisions are allowed. The impugned order dated 20.6.2008 passed by the Additional Sessions Judge-8, Nagpur in Criminal Revision No. 117/2007 and Criminal Revision No. 118/2007 is set aside. The order dated 16.11.2007 passed by the Magistrate issuing process against the non-applicant is restored.
Law Points
- Section 138 Negotiable Instruments Act
- 1881
- vicarious liability of director
- issuance of process
- requirement of specific averment
- prima facie case
