KOTAK SECURITIES Vs. STATE OF A.P.

JUDGEMENT

(1.) THIS Criminal Petition is filed under Section 482, Cr.P.C to quash the proceedings initiated against the petitioners for the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the Act') in C.C. No. 463 of 2007 on the file of I Additional Chief Metropolitan Magistrate, City Criminal Courts, Hyderabad.

(2.) THE complaint allegations clearly disclose that A.I is a juristic person and a financial establishment. A.2 to A.6 are its Directors and equally take part in its day-to-day affairs. A.7 to A.9 are the authorized representatives/signatories of A. 1 -company and they procure customers on behalf of A. 1 at the instructions of A.2 to A.6. A.7 to A.9 are directly instrumental in all the transactions of A. 1-company and they sign vouchers, issue cheques, receive cash, lure customers, and therefore, A.7 to A.9 are equally responsible for the day-to-day affairs of A. 1. In the year 2005, all the accused lured the complainant about the huge profits in case he deposits his money, shares, etc., with A.I. Hence, the complainant deposited an amount of Rs. 5,00,000/-. For due discharge of the said amount, three cheques bearing Nos. 116457, 116459 and 116458 dated 20.3.2007, 24.3.2007 and 26.3.2007 for Rs. 2,50,000/-, Rs. 1,25,000/- and Rs. 1,25,000/- respectively, drawn on HDFC Bank Limited, Raj Bhavan Road, Somajiguda, Hyderabad, were issued under the signa ture of A.7. When the complainant presented the said cheques for encashment, the same were dishonoured for want of sufficient funds. Therefore, the complainant got issued a legal notice dated 10.4.2007, to which A.I to A.6, A.8 and A.9 got issued a reply with false and baseless grounds denying the liability on their part. Hence, the complainant filed the above complaint and the learned Magistrate took cognisance of the case and issued process.

(3.) ON the other hand, Mr. C.B. Rama Mohan Reddy, the learned Counsel appearing for the second respondent-complainant contends that as per Section 141 of the Act if the offence is committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly, and that Sub-section (2) of Section 141 of the Act envisages that where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, they deemed to be guilty of that offence and shall be liable to be proceeded under Section 138 of the Act. Therefore, the complainant should be given an opportunity to prove that the petitioners are responsible for the offence under Section 138 of the Act.