LexKIRSHNA TEXPORT & CAPITAL MARKETS LTD. versus ILAA. AGRAWAL & ORS
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A [2015) 6 S.C.R. 284 KIRSHNA TEXPORT & CAPITAL MARKETS LTD. v. ILAA. AGRAWAL & ORS B (Criminal Appeal No.1220 OF 2009) MAY 06, 2015 [PINAKI CHANDRA GHOSE AND UDAY UM ESH LALIT,JJ.] C Negotiable Instruments Act, 1881: ss.138, 141 - Whether notice u/s. 138 is mandatorily required to be sent to the directors of a company before a complaint could be filed· against such directors along with the company- Held: There is no requirement in the Act that in such eventuality the 0 directors are to be individually issued separate notices u/ s. 138 since the persons who are in charge of affairs of company and running the affairs must naturally be aware of the notice of demand u/s. 138 issued to such company - Therefore, no notice is additionally contemplated to be given E to such directors - Notice. Allowing the appeal and remitting the matter to the High Court, the Court HELD: 1. The notice under Section 138 is required F to be given to "the drawer" of the cheque so as to give the drawer an opportunity to make the payment and escape the penal consequences. There is nothing in Section 138 which may even remotely suggest issuance of notice to anyone other than the drawer. Section 141 G states that if the person committing an offence under Section 138 is a Company, every director of such Company who was in charge of and responsible to that Company for conduct of its business shall also be H deemed to be guilty. The reason for creating vicarious 284 KRISHNA TEXPORT & CAPITAL MARKETS LTD. v. ILA 285 A. AGRAWAL & ORS. liability is plainly that a juristic entity i.e. a Company A would be run by living persons who are in charge of its affairs and who guide the actions of that Company and that if such juristic entity is guilty, those who were so responsible for its affairs and who guided actions of such juristic entity must be held responsible and ought to be B proceeded against. Section 141 again does not lay down any requirement .that in such eventuality the directors must individually be issued separate notices under Section 138. The persons who are in-charge of the affairs of the Company and running its affairs must naturally C be aware of the notice of demand under Section 138 of the Act issued to such Company. It is precisely for this reason that no notice is additionally contemplated to be given to such directors. The opportunity to the 'drawer' 0 Company is considered good enough for those who are in charge of the affairs of such Company. If it is their case that the offence was committed without their knowledge or that they had exercised due diligence to prevent such commission, it would be a matter of E defence to be considered at the appropriate stage in the trial and certainly not at the stage of notice under Section 138. [paras 13, 14] [298-G-H; 299-A-F] 2. If the requirement that such indiyidual F notices to the directors must additionally be given is read into the concerned provisions, it will not only be against the plain meaning and construction of the provision but will make the remedy under Section 138 wholly cumbersome. In a given case the ordinary lapse G or negligence on part of the Company could easily be rectified and amends could be made upon receipt of a notice under Section 138 by the Company. It would be unnecessary at that point to issue notices to all the directors, whose names the payee may not even be H 286 SUPREME COURT REPORTS [2015] 6 S.C.R. A aware of at that stage. Under Second proviso to Section 138, the notice of demand has to be made within 30 days of the dishonour of cheque and the third proviso gives 15 days time to the drawer to make the payment of the amount and escape the penal consequences. B Under clause (a) of Section 142, the complaint must be filed within one month of the date on which the cause of action arises under the third proviso to Section 138. Thus, a complaint can be filed within the aggregate period of seventy five days from the dishonour, by C which time a complainant can gather requisite information as regards names and other details as to who were in charge of and how they were responsible for the affairs of the Company. ";"j,., summary remedy 0 created for the benefit of a drawee of a dishonoured cheque will.thus be rendered completely cumbersome and capable of getting frustrated. Section 138 of the Act does not admit of any necessity or scope for reading into it the requirement that
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