Muthoot Capital Services Ltd. v. King Fisheries Ltd. and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE A.HARIPRASAD** **MONDAY, THE 7TH DAY OF JULY 2014/16TH ASHADHA, 1936** **Crl.MC.No. 4175 of 2010 ( )** **----------------------------** **AGAINST THE ORDER/JUDGMENT IN CC 358/1998 of ADDL.C.J.M.(ECONOMIC OFFENCES),ERNAKULAM DATED 30-09-2010.** ## **PETITIONER(S)/PETITIONER-COMPLAINANT:** **-------------------------------------** **MUTHOOT CAPITAL SERVICES LTD., MUTHOOT TOWERS, M.G.ROAD, KOCHI 682 035, REPRESENTED BY ITS MANAGING DIRECTOR, THOMAS GEORGE MUTHOOT, AGED 47 YEARS, S/O.MATHEW M.THOMAS.** **BY ADVS.SRI.K.P.DANDAPANI (SR.) SRI.MILLU DANDAPANI.** ## **RESPONDENT(S)/RESPONDENTS-ACCUSED & STATE:** **-------------------------------------------** **1. M/S.KING FISHERIES LTD., REG.OFFICEL: BLDG.NO.C-10-1052 (5), CONTONMENT WARD, QUILON-691 001, KERALA REPRESENTED BY ITS MANAGING DIRECTOR, SHRI MATHEW B.JOHN.** **2. SHRI MATHEW B JOHN, S/O.BABY JOHN, MANAGING DIRECTOR, M/S.KING FISHERIES LTD., BLDG.NO.C-10-1032 (5), CONTONMENT WARD, QUILON-691 001, KERALA, RESIDING AT VAYALIL VEEDU, NEENDAKARA P.O., SHAKTHIKULANGARA, KOLLAM – 619 582.** **3. SHRI SHAJI B.JOHN, S/O.BABY JOHN, DIRECTOR, M/S.KING FISHERIES LTD., BLDG.NO.C-10-1032(5), CONTONMENT WARD, QUILON-691 001, QUILON P.O., KERALA, NOW, RESIDING AT VII AB, INFRA WHITE HALL, K.C.ABRAHAM MASTER ROAD, PANAMPILLY NAGAR, KOCHI – 682 036.** **4. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM ERNAKULAM P.O., KOCHI- 682 031.** **R, BY ADV. PUBLIC PROSECUTOR R,R1-3 BY ADV. SRI.ASHIK K.MOHAMMED ALI** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 07-07-2014, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** ## **Crl.MC.No. 4175 of 2010 ( )** ## **APPENDIX** ## **PETITIONER'S ANNEXURES :** |**ANNEXURE A**|**:**|**PHOTOCOPY OF COMPLAINT DATED 30-1-1997 IN C.C**| |---|---|---| |||**NO.358 OF 1998 ON THE FILE OF THE COURT OF**| |||**ADDITIONAL CHIEF JUDICIAL MAGISTRATE (ECONOMICS**| |||**OFFENCES), ERNAKULAM.**| |**ANNEXURE B**|**:**|**PHOTOCOPY OF RESOLUTION PASSED AT THE MEETING OF**| |||**THE BOARD OF DIRECTORS OF THE IST RESPONDENT**| |||**COMPANY ON 3-1-1996.**| |**ANNEXURE C**|**:**|**PHOTOCOPY OF AGREEMENT ENTERED INTO BETWEEN THE**| |||**PETITIONER AND IST RESPONDENT COMPANY ON 6-2-1996**| |||**REFERRED TO IN THE CRIMINAL MISCELLANEOUS CASE.**| |**ANNEXURE D**|**:**|**PHOTOCOPY OF PETITION, C.M.P NO.3352/2010 DATED**| |||**17-8-2010 IN C.C NO.358/1998 ON THE FILE OF THE**| |||**COURT OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE**| |||**(ECONOMICS OFFENCES), ERNAKULAM.**| |**ANNEXURE E**|**:**|**PHOTOCOPY OF OBJECTION FILED BY THE ACCUED IN C.M.P**| |||**NO.3352/2010 DATED 17-8-2010 IN C.C NO.358/1998 ON**| |||**THE FILE OF THE COURT OF ADDITIONAL CHIEF JUDICIAL**| |||**MAGISTRATE (ECONOMICS OFFENCES), ERNAKULAM.**| |**ANNEXURE F**|**:**|**PHOTOCOPY OF ORDER DATED 30-09-2010 IN C.M.P**| |||**NO.3352/2010 IN C.C NO.358/1998 ON THE FILE OF THE**| |||**COURT OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE**| |||**(ECONOMICS OFFENCES), ERNAKULAM.**| **RESPONDENT'S ANNEXURES :** **NIL.** ## **//TRUE COPY//** **P.A TO JUDGE** **amk** ## **A.HARIPRASAD, J.** **------------------------------------------------** **Crl.M.C No.4175 of 2010** **-----------------------------------------------Dated this the 7[th] day of July, 2014.** ## **O R D E R** Aggrieved by the order passed by the trial court dismissing a petition under Section 319 Cr.P.C filed by the complainant (Annexure F order), the complainant has come up before this court under Section 482 Cr.P.C. The complainant initiated action against the first respondent company and one K.B.Panicker alleging offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (in short ' the N.I Act'). Subsequently, the second accused namely K.B.Panicker expired. Then the complainant approached the court below with a petition under Section 319 Cr.P.C to implead respondents 2 and 3 in the complaint. 2. Facts in brief, are as follows : Complainant/petitioner is a financial services company and the first accused is also an incorporated company. It is represented by its Managing Director. The deceased second ## **Crl.M.C No.4175 of 2010 2** accused was the authorized signatory of the first accused company. It is alleged that the accused company through the deceased second accused issued a cheque for Rs.25,00,000/- to the petitioner company. When it was presented for collection, the cheque was dishonoured due to 'stoppage of payment' by the drawer. In spite of sending a lawyer notice under Section 138 (b) of N.I Act, the accused persons neither paid off the liability nor sent reply. Hence the complaint was lodged. 3. Heard the learned counsel for the petitioner and the learned counsel for the contesting respondents. 4. On going through the impugned order (Annexure F), it is seen that the learned Magistrate considered the rival contentions urged before him in detail. Admittedly, the offence alleged herein is done by a company. Section 141 of N.I Act deals with offences by companies. Section 141(1) is quoted hereunder for clarity : ## **Crl.M.C No.4175 of 2010 3** _**“141. Offences by companies.** - (1) If the person committing an offence under section 138 is 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 the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly :_ _Provided that nothing contained in this sub-section shall render any person liable to punishment 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 :_ _Provided further that where a person is nominated as a Director of a company by virtue his or of holding any office employment in the Central Government or State Government or a financial_ ## **Crl.M.C No.4175 of 2010 4** _corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter."_ 5. On a careful reading of the provisions, it is discernible that if a person wants to implicate a company in an offence under Section 138 of N.I Act, it must be averred that the accused persons, who represented the company at the time of the offence where in charge of and where responsible to the company for the conduct of business of the company. Besides, the company will also be deemed to have committed the offence. Annexure A is the complaint. Learned counsel for the contesting respondents took me through the averments in the complaint. Nowhere in Annexure A1 complaint, it is mentioned that the parties now sought to be added as additional respondents were ever involved in the day-to-day administration of the company. **Crl.M.C No.4175 of 2010 5** 6. In answer to this argument, learned counsel for the petitioner drew my attention to two decisions of the Apex court in _**K.K.Ahuja v. V.K Vora and Another ((2009)10 S.C.C 48)**_ and _**National Small Industries Corporation Limited v. Harmeet Singh Paintal and Another**_ ( _**(2010)3 S.C.C 330)**_ . Both these decisions following the decision in _**S.M.S pharmaceuticals Ltd. v. Neeta Bhalla ((2005)8 S.C.C 89)**_ laid down the proposition of law that if the accused is a Managing Director or a Joint Managing Director, then it is not necessary to make specific averments in the complaint and by virtue of their decision, they are liable to be proceeded with. In this case, the Managing Director is shown in the original complaint itself as the person representing the company. He is now sought to be impleaded in his personal capacity. Learned counsel for the contesting respondents submitted that no statutory notice contemplated under Section 138(b) of the N.I Act has been issued to the ## **Crl.M.C No.4175 of 2010 6** persons now sought to be impleaded. It is indubitable that issuance of a notice is a condition precedent for implicating a person in an offence punishable under Section 138 of N.I Act. Further, none of the averments in the complaint will go to show that the persons now sought to be impleaded were dealing with the day-to-day affairs of the company. The court below rightly considered all the points and declined the prayer to add the respondents 2 and 3 as additional accused by invoking jurisdiction under Section 319 Cr.P.C. I find no illegality or impropriety in the impugned order. In the result, Crl.M.C is dismissed. All pending interlocutory applications will stand dismissed. **A.HARIPRASAD, JUDGE.** amk