whether the
respondent can be made liable in his personal capacity when the Company has
not been made a party to the complaint.
Trail court
The reasons given for the acquittal
of the respondent were that the Company M/s. Salvi Infrastructure Pvt. Ltd.
was not made the accused and instead the respondent was made accused in his
personal capacity. The cheque could not be said to have been issued for the
discharge of whole or part of the liability because it exceeded the
liability. Further, it had not been proved that the respondent was a person
liable to make the payment for M/s. Salvi Infrastructure Pvt. Ltd.
The High Court by the
impugned order dismissed the said application on the ground that the
reasoning set out by the Trial Court in its order did not call for
reconsideration.
About the liability under Section 138 of the NI Act, where the cheque drawn
by the employee of the appellant company on his personal account, even if
it be for discharging dues of the appellant-company and its Directors, the
appellant-company and its Directors cannot be made liable under Section
138. Thus, we observe that in the above mentioned case, the personal
liability was upheld and the Company and its Directors were absolved of the
liability. The logic applied was that the Section itself makes the drawer
liable and no other person.
However, as the respondent was
the Managing Director of M/s. Salvi Infrastructure Pvt. Ltd. and sole
proprietor of M/s. Salvi Builders and Developers, there is no need of
specific averment on the point.
This Court has held in National Small
Industries Corporation Ltd.
Para 39 (v) “If the accused is a Managing Director or a Joint Managing
Director then it is not necessary to make specific averment in the
complaint and by virtue of their position they are liable to be proceeded
with.”
The Courts below have wrongly
concluded that notices under Section 138(b) of the N.I. Act were sent to
all the Directors of the Company.
Learned counsel for the appellant
contended that such a conclusion was not supported by any evidence inasmuch
as there was only one acknowledgment card on record, showing receipt of
notice under Section 138(b) of the Act, by the respondent.
The Courts below
did not appreciate that the accused respondent in his statement under
Section 313 Cr.P.C. had admitted that he was paid Rs.74,200/- as earnest
money and that he had issued receipt for the same and thus there is no
substance in the argument of the respondent that the cheque for Rs.74,200/-
cannot be said to have been issued for discharge of whole or part of
liability, because it exceeded the liability.
the Managing Director of M/s. Salvi Infrastructure Pvt. Ltd. and sole
proprietor of M/s. Salvi Builders and Developers, there is no need of
specific averment on the point.
This Court has held in National Small
Industries Corporation Ltd.
Para 39 (v) “If the accused is a Managing Director or a Joint Managing
Director then it is not necessary to make specific averment in the
complaint and by virtue of their position they are liable to be proceeded
with.”
The Courts below have wrongly
concluded that notices under Section 138(b) of the N.I. Act were sent to
all the Directors of the Company.
Learned counsel for the appellant
contended that such a conclusion was not supported by any evidence inasmuch
as there was only one acknowledgment card on record, showing receipt of
notice under Section 138(b) of the Act, by the respondent.
The Courts below
did not appreciate that the accused respondent in his statement under
Section 313 Cr.P.C. had admitted that he was paid Rs.74,200/- as earnest
money and that he had issued receipt for the same and thus there is no
substance in the argument of the respondent that the cheque for Rs.74,200/-
cannot be said to have been issued for discharge of whole or part of
liability, because it exceeded the liability.
Thus, in the light of the position which the respondent in the present case
held, we are of the view that the respondent be made liable under Section
138 of the NI Act, even though the Company had not been named in the notice
or the complaint. There was no necessity for the appellant to prove that
the said respondent was incharge of the affairs of the company, by virtue
of the position he held. Thus, we hold that the respondent Vijay D Salvi is
liable for the offence under Section 138 of the NI Act.
held, we are of the view that the respondent be made liable under Section
138 of the NI Act, even though the Company had not been named in the notice
or the complaint. There was no necessity for the appellant to prove that
the said respondent was incharge of the affairs of the company, by virtue
of the position he held. Thus, we hold that the respondent Vijay D Salvi is
liable for the offence under Section 138 of the NI Act.
The law laid down by this Court in R. Vijayan Vs. Baby and Anr.,[3] was to
the following effect:
“As the provisions of Chapter XVII of the Act strongly lean towards grant
of reimbursement of the loss by way of compensation, the courts should,
unless there are special circumstances, in all cases of conviction,
uniformly exercise the power to levy fine up to twice the cheque amount
(keeping in view the cheque amount and the simple interest thereon at 9%
per annum as the reasonable quantum of loss) and direct payment of such
amount as compensation. Direction to pay compensation by way of restitution
in regard to the loss on account of dishonor of the cheque should be
practical and realistic, which would mean not only the payment of the
cheque amount but interest thereon at a reasonable rate. Uniformity and
consistency in deciding similar cases by different courts, not only
increase the credibility of cheque as a negotiable instrument, but also the
credibility of courts of justice.”
We, therefore, award compensation to the extent of twice the cheque amount
and simple interest thereon at 9% per annum to the complainant.
Accordingly, the respondent Vijay D Salvi is sentenced to undergo simple
imprisonment for a period of five months for the offence under Section 138
of the NI Act. Considering the fact that the cheque amount is Rs.74,200/-,
we direct the respondent Vijay D Salvi to pay a compensation of
Rs.1,48,400/- (Rupees one lakh forty-eight thousand four hundred only) with
simple interest thereon at 9% per annum, to the complainant-appellant. In
default of payment of the said compensation, the respondent will have to
undergo simple imprisonment for a period of six months.
the following effect:
“As the provisions of Chapter XVII of the Act strongly lean towards grant
of reimbursement of the loss by way of compensation, the courts should,
unless there are special circumstances, in all cases of conviction,
uniformly exercise the power to levy fine up to twice the cheque amount
(keeping in view the cheque amount and the simple interest thereon at 9%
per annum as the reasonable quantum of loss) and direct payment of such
amount as compensation. Direction to pay compensation by way of restitution
in regard to the loss on account of dishonor of the cheque should be
practical and realistic, which would mean not only the payment of the
cheque amount but interest thereon at a reasonable rate. Uniformity and
consistency in deciding similar cases by different courts, not only
increase the credibility of cheque as a negotiable instrument, but also the
credibility of courts of justice.”
We, therefore, award compensation to the extent of twice the cheque amount
and simple interest thereon at 9% per annum to the complainant.
Accordingly, the respondent Vijay D Salvi is sentenced to undergo simple
imprisonment for a period of five months for the offence under Section 138
of the NI Act. Considering the fact that the cheque amount is Rs.74,200/-,
we direct the respondent Vijay D Salvi to pay a compensation of
Rs.1,48,400/- (Rupees one lakh forty-eight thousand four hundred only) with
simple interest thereon at 9% per annum, to the complainant-appellant. In
default of payment of the said compensation, the respondent will have to
undergo simple imprisonment for a period of six months.
