Judgment:
ORDER
C.Y. Somayajulu, J.
1. The point for consideration in this petition is whether a person who manages the affairs of proprietary concern can be made liable along with the proprietor of the sole proprietary concern, for the offence under Section 138 of the Negotiable Instruments Act, 1881 (the Act), by invoking the aid of Section 141 of the Act.
2. Private complainant filed by the first respondent against the mother of the petitioner (A1), who is the proprietrix of Kousalya Enterprises, and the petitioner (A2), alleging that Kousalya Enterprises, which was appointed as the distributor of the poultry feed products being manufactured by it, became indebted to it to a tune of more than Rs. 21,00,000/- while it was being managed by the petitioner and that the cheques for Rs. 18,00,000/- got drawn by the petitioner through his mother on behalf of Kousalya Enterprises towards part payment of that debt, were dishonoured on presentation for payment, and that the petitioner and his mother (A1) in spite of statutory notice being issued to them failed to pay the amounts covered by the dishonoured cheques, and hence, are liable for punishment under Section 138 read with Section 141 of the Act read with Section 420, IPC was taken cognizance of the learned Magistrate after recording the sworn statement of the representative of the first respondent under Section 138 of the Act only but not under Section 420, IPC against the petitioner (A2) and his mother. This petition is filed to quash the proceedings against the petitioner (A2).
3. The contention of Sri C. Padmanabha Reddy, learned Senior Counsel for the petitioner, is that since the dishonoured cheques were issued by A1, mother of the petitioner who is the proprietrix of Kousalya Enterprises, a sole proprietary concern, and since theory of vicarious liability does not apply to criminal proceedings except as provided by a statute and since vicarious liability envisaged by Section 141 of the Act applies to Companies, firms and association of individuals but not to proprietary concerns, question of the petitioner being made vicariously liable for the bouncing of the cheques issued by the mother of the petitioner on the ground that he was managing the affairs of the proprietary concern of his mother does not arise, and so the proceedings against the petitioner are liable to be quashed. The contention of the learned counsel for the first respondent, is that, petitioner being a Government Servant and a Veterinary Doctor, is carrying on business in poultry feed in the name of his mother, who is an old aged woman, and had entered into all the transactions with the first respondent as the de facto-owner of the Kousalya Enterprises, and that the petitioner with a view to cheat the first respondent, got the cheques signed by his mother (A1) and in the facts and circumstances first respondent can, by invoking Section 141 of the Act, make the petitioner also liable for the offence under Section 138 of the Act committed by Al, who never even stepped into the shop and with whom first respondent did not deal personally. It is his contention that petitioner has been taking time in the trial Court for production of his mother (A1) on the ground that she, who is aged 76 years, is bed ridden and since the trial Court is refusing to grant, adjournments petitioner came up with this petition with a mala fide intention and so there are no grounds to quash the proceedings against the petitioner.
4. Documents produced by the first respondent along with the complaint, no doubt, disclose that petitioner is actually looking after the affairs of Kousalya Enterprises, which admittedly is the proprietary concern of his mother i.e. A1. But since the offence alleged is under Section 138 of the Act, which makes the drawer of the dishonoured cheque only liable for punishment prescribed therein, it is clear that for an offence under Section 138 only the drawer of the dishonoured cheque but nobody else can be made liable. If the bounced cheque is drawn on behalf of a company, in view of Section 141 of the Act the person who drew the cheque on behalf of the Company, along with the company and the directors and the other persons, who are in charge of the day to day affairs and business of that company can be made vicariously liable for punishment for the offence under Section 138 of the Act committed by the drawer of the cheque on behalf of the Company.
5. Though the heading of Section 141 of the Act reads 'offences by companies', as per the explanation to that Section 'Company' means 'any body corporate and includes a firm or other association of individuals; and 'director' in relation to a firm, means a partner in the firm.' Therefore, by virtue of the explanation, to Section 141 of the Act theory of vicarious liability is also extended to bodies corporate firms and associations of individuals only but not to sole proprietary concerns. Since Kousalya Enterprises, admittedly, is a proprietary concern, it cannot be said to be a Company, or a firm or a body corporate or an association of individuals, for to first respondent to invoke Section 141 of the Act to make the petitioner also liable on the ground that he is managing its affairs. It is well known that penal statute has to be strictly construed, and it is also well known while construing a Section no word can be added to or deleted from that Section. So by invoking Section 141 of the Act a person who is not either the drawer of the dishonoured cheque, or the proprietor but is in charge of the day to day affairs of a sole proprietary concern, cannot be made liable for an offence under Section 138 of the Act.
6. The other contention of the learned counsel for the first respondent is that since the complaint was filed under Section 420, IPC also, and since the allegations in the complaint prima facie disclose the fraud committed by the petitioner, the learned Magistrate ought to have taken cognizance of the complaint under Section 420. IPC against the petitioner and so a direction may be given to the learned Magistrate to take cognizance of the case under Section 420, IPC against the petitioner. No such direction can be given in a petition filed by an accused under Section 482, Cr. P.C. The remedy of the first respondent, who failed to question the order of the learned Magistrate not taking cognizance of the case under Section 420, IPC against the petitioner, is to file a fresh complaint against the petitioner for an offence Section 420, IPC, if so advised.
7. Hence, the petition is allowed and the proceedings in C.C. No. 1083 of 2004 against the petitioner are quashed.