Negotiable Instrument act
pkm
(Querist) 30 August 2009
This query is : Resolved
In K.K. Ahuja Vs V.K. Vora & Anr. Hon’ble Supreme Court had given decision on July 06, 2009 under Section 138 of N.I. act. The judgment is reproducing below. Hon’ble court has defined vicarious liability under section 141 sub sections (1) & (2).In the para 6 of the judgment, as per section 141 (2) signatory of the cheque is liable though he may not be Director of the company. He may be an employee of the company performing his duties. The decision is quite elaborative. In my opinion the hon’ble court has failed to clarify on one aspect viz. what will be the position of an employee if after issuance of cheque, the Managing Director or Senior Authority instructs the bank to “Stop Payment” the cheque.
The basic question is whether employee is liable under section 138 on cheque signed by him on behalf
of the company, when the said cheque is instructed for “Stop Payment” by the Managing Director or the Senior Authority of the company after issuance.
If the answer is in affirmative, whether this is not against the natural justice to an employee. Because
for the act of senior authority a junior employee is liable & the senior employee is exempted under the section 138 of N.I.act. If junior employee is liable along with Managing Director whether this is not a channel through which another case like “ satyam” can be created. Whether industrial growth of India will not hamper if employee do not sign the cheque ?
I will be happy if expert opinion is given on the above point. The said judgment is as follows ;
Reportable
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NOS.1130-31 OF 2003
K.K. Ahuja ... Appellant
Vs.
V.K. Vora & Anr. ... Respondents
JUDGMENT
R. V. RAVEENDRAN, J.
The question as to who can be said to be persons "in-charge of, and was responsible to the company for the business of the company" referred to in section 141 of the Negotiable Instruments Act, 1881 (for short 'the Act') arises for consideration in this appeal by special leave by a complainant.
2. The appellant filed two complaints (Crl. Comp.No.58/2001 and59/2001) in the Court of the Metropolitan Magistrate, Delhi, against M/s.Motorol Speciality Oils Ltd. (`the Company' for short) and eight others under section 138 of the Act. The first complaint was in regard to dishonour of five cheques (each for Rs.5,00,000/-, all dated 28.2.2001). The second complaint was in regard to dishonour of three cheques (for Rs.3 lakhs, 3 lakhs and 10 lakhs dated 31.10.2000, 30.11.2000 and 20.12.2000 respectively). The cheques were alleged to have been drawn in favour of the appellant's proprietary concern (M/s Delhi Paints & Oil Traders) by the company represented by its Chairman. In the said complaints, the appellant had impleaded nine persons as accused, namely, the company (A-1), its Chairman (A-2), four Directors (A-3 to A-6) as also its Vice-President (Finance), General Manager and Deputy General Manager (A-7, A-8 and A-9 respectively). In the complaint the complainant averred that "at the time of the commission of offence, accused 2 to 9 were in-charge of and responsible for the conduct of day to day business of accused No.1" and that therefore they were deemed to be guilty of offence under section 138 read with section 141 of the Act and section 420 of the Indian Penal Code. The appellant also alleged that respondents 2 to 9 were directly and actively involved in the financial dealings of the company and that the accused had failed to make payment of the cheques which were dishonoured. In the pre-summoning evidence, the appellant reiterated that accused 2 to 9 were responsible for the conduct of d
