LexS.V. MUZUMDAR AND ORS. versus GUJARAT STATE FERTILIZER CO. LTD. AND ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
S.V. MUZUMDAR AND ORS.
A
v.
GUJARAT STATE FERTILIZER CO. LTD. AND ANR.
APRIL 25, 2005
[ARIJIT PASAYAT AND S.H. KAPADIA, JJ.]
B
Negotiable Instruments Act, 1881 :
ss. 141(1) and 141(2)-Applicabi/ity of-Complaint uls 138 of the Act
and ss. 420 and 114 of Penal Code filed against a company and its employees C
and Directors-Application by employees and Directors for dropping the
proceedings contending that at the alleged time, they were not in-charge and/
Q
or responsible to the company-Rejected by trial court as also by High Court-
Held, whether a person is in charge or responsible to the company for conduct
of its business and whether allegations are sufficient to attract culpability as D
also whether requirements for application of deeming provision under sub-
s. (2) of s.141 exist or not, are the questions to be adjudicated at the trial-
High Court rightly rejected appellants' petition-However, trial court may
consider the applications of appellants. if any, filed under s.205 of the Code
for dispensing with their personal attendance-Code of Criminal Procedure,
1973-s. 20s.
E
Respondent No. 1 filed a complaint against a company and its
employees and Directors, for committing offences under s.138 of the
Negotiable Instruments Act, 1881 and ss.420 and 114 of the Indian Penal
Code. Appellants, employees and Directors of the said company, filed an
application before the Chief Judicial Magistrate to drop the proceedings. F
The application was rejected. The appellants approached the High Court
contending that there was no material to show that at the time of
commission of alleged offences, they were in charge and/or responsible to
the company for the conduct of the business as required under s.141(1)
of the Act; and that the deeming provision under sub -s.(2) of s.141 was G
also not applicable. The High Court rejected both the pleas and held that
the controversy was to be adjudicated at the trial. Aggrieved, the '
employees and Directors of the company filed the present appeal.
Besides the arguments on merits, it was contended for the appellants,
857
H
858
SUPREME COURT REPORTS
{2005) 3 S.C.R.
__.
A that identical issues are pending consideration in some cases before a larger
Bench of the Supreme Court and, therefore, the instant appeal should also
be tagged with those cases.
Dismissing the appeal, the Court
B
HELD : 1.1. The prayers before the courts below essentially were
to drop the proceedings on the ground that the allegations would not
constitute a foundation for action in terms of s.141 of the Negotiable
-
Instruments Act, 1881. These questions have to be adj'-dicated at the trial.
, Whether a person is in charge of or is responsible to the company for
c
conduct of business is to be adjudicated on the basis of materials to be
placed by the parties. (861-G-H; 862-A)
..__
t.2. Sub-s. (2) of s.141 is a deeming provision which operates in
:
certain specified circumstances. Whether the requirements for application
of the deeming provision exist or not is again a matter for adjudication
~
D during trial. Similarly, whether the allegations contained are sufficient to
attract culpability. and whether or not the· evidence to be led would
establish the accusations are matters for adjudication at the trial. Proviso
to sub-s.(1) of s.141 enables the. accused to prove his innocence by
discharging the burden which lies on him. (862-A-B; E-F)
E
2. The High Court was justified in rejecting the petition filed by the
appellants. The larger Bench is considering issues referred to it. The
decision to be rendered by the larger Bench obviously would govern the
trial. As rightly submitted by the respondents in these appeals, there is
no challenge to the validity of any provision and grievance essentially
F
related to the prayer for dropping the proceedings. Therefore, there is no
substance in the plea for tagging these matters with those pending before
the larger Bench. (862-F-G)
3. Taking into account the fact that the cases have been pending for
nearly a decade, it is directed that the matter be taken up by the trial court
G on the date fixed. If the appellants file applications in terms of s.205 of
the Code of Criminal Procedure, 1973 for dispensing with their pers(?nal
attendance, the trial court. will take note of the same and dispense with
the personal attendance by stipulating conditions in terms of s.205(2) of
-...;..·------
the Code. It has to be borneExcerpt shown. Read the full judgment & AI analysis in Lexace.