JUDGMENT
This revisional application is for quashing the proceeding being case No. C-2067 of 1989 under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the N.I Act) pending before the learned Judicial Magistrate, 9th Court, Alipore. The facts relevant for the appreciation of the points raised in the instant revision may be briefly stated as follows:
In discharge of its liability, a company named Ambitious General Finance and Housing Company (P) Ltd., issued a cheque No. 018455 drawn by its director on 10 September 1989 for Rs. 15,000/- in favour of the complainant Subhas Chandra Mondal who is the Opposite Party in the instant revision. Though the complainant presented it to the bank for payment on 10 September 1989 but it bounced and the bank's intimation in this regard was sent to the complainant on 12 September 1989. The cheque was presented to the bank for payment for second time but it also bounced this time. Then the cheque was presented to the bank for payment for the third time on 16 Nov. 1989. This time it also bounced and the bank's intimation in this regard was received by the complainant on 17 Nov. 1989. The said company also issued in discharge of its liability another cheque No. 018456 drawn by its director on 20 September 1989 for Rs. 10,000/- in favour of the complainant. This cheque was presented to the bank for payment for the first time on 22 September 1989 for the second time on 27 September 1989 and for the third time on 9 Nov.' 89. But the cheque bounced all the times. For the dishonour on presentation for the third time the complainant received the bank's intimation in this regard on 10 Nov.' 89. The complainant is said to have sent a notice in writing demanding payment of the amounts of the cheque on 18 November 1989 as required under Section 138 (b) of the N.I Act and the accused persons are said to have received the said notice on 22 November 1989. The instant proceeding under section 138 of the N.I Act was started on presentation of a petition of complaint by the complainant on 21 December 1989 and it gave rise to Case No. 2067/89 now pending before the learned Judicial Magistrate, 9th Court, Alipore.
2. The accused Nos. 1 to 3 have filed the instant revisional application for quashing the aforesaid proceeding.
3. Mr. Deb, the learned advocate appearing for the petitioners has submitted that cheque No. 018455 dated 10.9.89 for Rs. 15,000/- was presented to the bank for payment on 10.9.89 and returned unpaid and that the bank's intimation in this regard was given to the payee i.e the complainant-opposite party on 12 September 1989. He has also submitted that the cheque No. 018456 dated 20 Sept. 1989 for Rs. 10,000/- was presented to the bank for payment on 22 Sept. 1989 and returned unpaid and that the bank's intimation in this regard was given to the payee i.e complainant-opposite party on 23 Sept. 1989. He has argued that as the notice in writing demanding payment of the amounts of the said dishonoured cheques was not given in the instant case within fifteen days of the receipt of information by the complainant from the bank regarding the return of the cheques as unpaid, as required under Sec. 138 (b) of the N.I Act, the instant case under Sec. 138 of the N.I Act is not maintainable. He has also argued that by subsequent presentation and dishonour of the cheques the said period of limitation cannot be saved. He has further argued that the company Ambitious General Finance and Housing Company (P) Ltd. is the principal offender, that the accused persons, being its director and officer are only vicariously liable and that as the principal offender has not been impleaded as an accused, the instant proceeding should fail and should be quashed. He has also argued that the learned Magistrate took cognizance mechanically without applying his judicial mind inasmuch as there, are no allegations in the complaint that the petitioners were the persons, who at the time the offence was committed, were in charge of and were responsible to the company for the conduct of its business.
4. Mr. Pal, learned advocate appearing for the opposite party has argued that in order to attract the provision of Sec. 138 of the N.I Act, the cheques are to be presented to the bank within a period of six months from the date on which they were drawn or within the period of its validity, whichever is earlier as provided under clause (a) of Sec. 138 of the N.I Act, that the cheques in question were valid for six months from the dates when they were drawn, that though the said cheques bounced twice, still at the request of the accused persons the cheque No. 018455 dated 10 Sep., 1989 and the cheque No. 018456 dated 20 Sep., 1989 were presented to the bank for payment for the third time respectively on 16 November, 1989 and 9 November 1989 well within the period of their validity and that by presentation of the cheques to the bank for payment for third time within the period of validity of the cheques, the payee or the holder in due course, at best, can be said to have waived the right that accrued to him on dishonour of the cheques on the first and second presentation to the bank for payment. He has argued that though the cheques in question were presented to the bank for payment for the third time, they were so presented well within the period of their validity, that the cheques were again dishonoured on 16 November, 1989 and 9 November 1989 and that the complainant received the bank's intimations in this regard on 17 November 1989 and 10 November, 1989 and issued the notice in writing demanding payment of money on 18 November, 1989 within fifteen days from the date of receipt of the bank's intimations, as enjoined by clause (b) of Sec. 138 of the N.I Act. So he has submitted that the notice under Sec. 138 (b) of the N.I Act is valid and legal and that the instant proceeding is maintainable. He has also argued that the company is not a necessary party in the instant proceeding and that there are sufficient averments in the complaint against the accused persons and that the learned Magistrate has rightly taken cognizance on application of his mind to the allegations made in the complaint against the accused persons. So, he has submitted that the instant revisional application should be dismissed and stay order should be vacated.
5. First let me consider whether the instant case under Section 138 of the N.I Act is maintainable or not. In challenging the maintainability of the instant case, Mr. Deb learned advocate appearing for the petitioners has argued that the cheque No. 018455 dated 10 September, 1989 and the cheque No. 018456 dated 20 September, 1989 were presented to the bank for payment respectively on 10 September'89 and 22 September, 1989 and that the bank's intimation in this regard were given to the payee i.e the complainant-opposite party on 12 September, 1989 in respect of the cheque No. 018455 dated 10 September, 1989 and on 23 September, 1989 in respect of the other cheque. He has argued that since the notice in writing demanding payment of the amount of the said dishonoured cheques was not given within fifteen days of the receipt of the information by the complainant-opposite party from the bank regarding the return of the cheques as unpaid, as required under Section 138 (b) of the N.I Act, the instant case is not maintainable. He has submitted that subsequent presentation and dishonour of the cheques on such presentation, the said period of limitation cannot be saved or extended. Mr. Pal learned advocate for the opposite party has, on the other hand, argued that though the cheques in question bounced on first presentation to the bank for payment, still at the request of the accused persons and to give them an opportunity to pay the amounts, the said cheques were presented to the bank for the second time and also for the third time. He has further argued that as the cheques bounced on third presentation to the bank for payment on 16 Nov.' 89 and 9 Nov. 1989 well within the period of this validity, the complainant issued the notice in writing under Section 138 (b) of the N.I Act within fifteen days from the dates of receipt of the bank's intimations as to non-payment of cheques which were received on 17 November, 1989 and 10 November, 1989. As the said notice under Section 138 (b) of the N.I Act was issued within the fifteen days from the aforesaid dates of receipt of banks intimation, he has further argued that the notice under Section 138 (b) is valid and legal and that the instant proceeding is maintainable. Having heard the submission made on both sides and having considered the materials on record and also the provision of section 138 of the N.I Act, I am of the opinion that in the facts and circumstances of the case, the notice issued on 18 November, 1989 under Section 138 (b) of the N.I Act and received by the accused persons on 22 November, 1989 is a valid and legal notice and that the instant proceeding, therefore, is maintainable. To invoke the provision of S. 138 of the N.I Act, the payee or the holder in due course shall have to present the cheque for payment to the bank within a period of six months from the date on which it was drawn or within the period of its validity whichever is earlier as enjoined by clause (a) of Section 138 of the N.I Act. In the instant case the cheques were valid for six months from the dates when they were drawn and as such the period of their validity was six months from the date when they were drawn. Section 138 enjoins that the cheque must be presented to the bank within a period of six months or within the period of its validity whichever is earlier. It does not prohibit or forbid presentation of the cheque to the bank more than once for payment. Nor does it enjoin that such cheque should be presented to the bank for payment only once. So, I am of the opinion that the cheque may be presented to the bank for payment twice or thrice within the aforesaid period of six months or the period of its validity and it cannot be presented to the bank for payment beyond the said period of six months or the period of validity. Of course, when the cheque is presented to the bank for the first time for payment and is returned unpaid, it gives rise to a right in favour of the payee or the holder in due course to initiate a criminal proceeding under section 138 of the N.I Act against the drawer of the cheque. On such first presentation for payment and dishonour of the cheque on such presentation, the payee or the holder in the due course undoubtedly could have enforced his right against the drawer of the cheque. But when he waits and presents the cheque for the second or for the third time, he does so far the benefit of the drawer in order to give an opportunity to him to pay or deposit the amount of the cheque in the bank. But there can be no manner of doubt that when the payee or the holder in due course after the cheque had bounced on first presentation presents the cheque for the second time to the bank for payment, he must be held to have waived the right that had accrued in his favour when the cheque bounced on first presentation. Similarly when the payee or the holder in due course even after the cheque had been dishonoured for the second time presents the cheque to the bank for payment for the third time but within the period of six months from the date of drawal of the cheque or within the period of its validity, the payee or the holder in due course must be held to have waived the right that accrued in his favour when the cheques bounced for second time. In the instant case the cheques were presented to the bank for payment for the third time well within the period of six months from the dates when they were drawn and they were returned unpaid this time also. On such dishonour of the cheque after they had been presented for payment within the period of six months from the dates when they were drawn, a fresh right accrued in favour of the complainant-opposite party and he can certainly enforce that right by initiating a proceeding under Section 138 of the N.I Act. The bank's intimations in this regard in respect of the cheques in question were received on 10 Nov.' 89 and 17 November 1989. The notice in writing demanding payment of money under clause (b) of Section 138 of the N.I Act, was given on 18 November 1989 and the same appears to have been received by the accused persons on 22 November 1989. So the said notice appears to be valid and legal. In that view of the matter the instant case under Section 138 of the N.I Act appears to be maintainable. So, the first contention as raised on behalf of the petitioners fails.
6. Next let me consider whether the accused persons who are the director and officers of the company — Ambitious General Finance Housing Company (P) Ltd. can be proceeded against without the company being impleaded as an accused though the said company is the principal offender inasmuch as it issued the cheques in question drawn on its behalf by its director. Mr. Deb has argued that as the company has not been impleaded as an accused in this proceeding, the accused persons cannot be proceeded against and that the instant proceeding must, therefore, fail. In support of his view, he has referred to a decision of the Supreme Court in the case of State of Madras v. C.V Parekh reported in AIR 1971 Supreme Court 447. In that case four accused persons including the two respondents before the Supreme Court namely, C.V Parekh and A.C Parekh were prosecuted under Section 120-B of the Indian Penal Code read with sections 7 and 8 of the Essential Commodities Act and clause (5) of Iron and Steel (Control) Order. All these accused persons were convicted and in convicting the aforesaid two respondents, the Magistrate relied on section 10 of the Essential Commodities Act, 1955. However, on appeal the High Court acquitted the said two respondents and the State of Madras filed the appeal before the Supreme Court against that order of acquittal. It was urged before the Supreme Court on behalf of the appellant that the two respondents were in charge of, and were responsible to, the company for the conduct of the business of the company and, consequently they must be held responsible for the sale and for this contravening the provision of clause (5) of the Iron and 158 Steel (Control) Order. This argument was not accepted by the Supreme Court on the ground that it ignored the first condition for the applicability of section 10 to the effect that the person contravening the order must be company itself. The Supreme Court has observed as follows:
“In the present case, there is ho finding either by the Magistrate by the High Court that the sale in contravention of clause (5) of the Iron and Steel (Control) Order was made by the company. In fact, the Company was not charged with the offence at all. The liability of the persons in charge of the Company only arises when the contravention is made by the Company itself. Since, in this case, there is no evidence and finding that the Company contravened clause (5) of the Iron and Steel (Control) Order the two respondents could not be held responsible”.
7. Relying upon such observation of the Supreme Court Mr. Deb has argued the Company is the principal offender and that unless the Company is tried together with the accused persons in the same proceeding the accused persons who are only vicariously liable for the offence committed by the Company cannot be proceeded against in the instant proceeding. But aforesaid decision of the Supreme Court has been subsequently clarified and explained in the case of Sheoratan Agarwal v. State of Madhya Pradesh reported in (1984) 4 S.C.C 352 which has been referred to by the learned advocate appearing on behalf of the opposite party. The provisions of section 10 of the Essential Commodities Act which are similar to the provisions of section 141 of the N.I Act came up for consideration before the Supreme Court in the said reported case. Relying upon the decision in the case of State of Madras v. C.V Parekh (Supra), it was urged before the Supreme Court that the petitioners, the Managing Director and the Production Manager of the Company could not be prosecuted unless the Company itself was prosecuted. In rejecting the aforesaid argument the Supreme Court observed as follows:
“We do not think that the language of section 10 of the Essential Commodities Act justifies the submission made on behalf of the petitioners that if it is alleged that the person contravening the order made under the Essential Commodities Act is a company, the prosecution of directors, the officers, and the servants of the company or other persons is precluded unless the company itself is prosecuted. We are afraid the submission made on behalf of the petitioners proceeds upon misunderstanding of the decision of this Court in State of Madras v. C.V Parekh.”
8. In analysing the provisions of section 10 of the Essential Commodities Act, the Supreme Court further observed as follows.
“If the contravention of the order made under Section 3 is a Company the person who must be held guilty and punished are (1) the Company itself, (2) the person who at the time of contravention was committed, was in charge of and was responsible to, the Company for the conduct of the business of the Company whom for short we shall describe as the person-in-charge of the company, and (3) any director, manager, Secretary or other officer of the company with whose consent or connivance or because of neglect attributable to whom the offence of the company has been committed, when for short we shall describe as an officer of the company. Any one or more or all of them may be prosecuted and punished. The company alone may be prosecuted. The person-in-charge only may be prosecuted. The conniving officer may individually be prosecuted. One, some or all may be prosecuted. There is no statutory compulsion that the person-in-charge or the officer of the company may not be prosecuted unless he be arraigned alongside the company itself. Section 10 indicates the persons who may be prosecuted where the contravention is made by the company. It does not lay down any condition that the person-in-charge or an officer of the company may not be separately prosecuted if the company itself is not prosecuted. Each or any of them may be separately prosecuted or along with the company. Section 10 lists the persons who may be held guilty and punished when it is a company that contravenes an order made under Section 3 of the Essential Commodities Act. Naturally before the person-in-charge or an officer of the company is held guilty in the capacity it must be established that there has been a contravention of the order by the company. That should be the axiomatic and that is all that the Court laid down in State of Madras v. C.V Parekh as a careful reading of that case will show and not that the person in charge or an officer of the company must be arraigned simultaneously along with the company it he is to be found guilty and punished.”
9. I have already stated that provision of section 10 of the Essential Commodities Act is similar to the provision of section 141 of the N.I Act. Relying upon the aforesaid decision of the Supreme Court in the case of Sheoratan Agarwal v. State of Madhya Pradesh (Supra). I hold that the accused persons being the director and officer of the company may be prosecuted in the instant proceeding even if the company itself has not been made an accused therein. In that view of the matter the second contention as raised on behalf of the petitioners also fails.
10. Next let me consider whether there are sufficient allegations in the petition of complaint against the accused persons for the prosecution under Section 138 of the N.I Act and whether the learned Magistrate took cognizance without applying his judicial mind to such allegations. In the petition of complaint the present petitioner have been made accused as a director and officer of the company. Under sub-section (1) of section 141 of the N.I Act if the persons committing an offence is a company then every person who at the time of 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. Sub-section (2) of Sec. 141 however, provides that notwithstanding anything contained in sub-section (1) where any offence under this Act has been committed by a company and where it has been proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, Secretary or other officer of the company, then such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. In the instant case prosecution has been launched against the accused persons as the director and officer of the company within the meaning of sub-section (2) of section 141. In paragraph 5 of the petition of complaint it has been alleged that the offence was committed due to neglect of the accused persons. A specific allegation of fraud and cheating has also been made against the accused persons in paragraph 7 of the petition of complaint. In support of his argument that there are no sufficient allegations against the accused persons to proceed against them, the learned advocate for the petitioners has referred to a decision in the case of Mahalderam Tea Estate Private Ltd. v. D.N Pradhan reported in 1978 Cal HN 336 and the decision in the case of Krishna Kumar Dalmia v. State reported in (1981) 2 Cal HN 301. But the facts of the reported case are distinguishable from the facts of the instant case. In the reported case the accused persons were prosecuted on the allegation that they were in charge of and responsible to the company for the conduct of its business at the time when the offence was committed. But in the instant case the accused persons have been prosecuted as the director and officer of the company as per provision of section 141 (2) of the N.I Act. There are specific allegation in the petition of complaint that the alleged offence was committed due to neglect of the accused persons and that there are also allegations as to fraud and cheating against the accused persons. So in my opinion, the decision in the aforesaid reported case cannot be made applicable to the instant case. As there are definite allegations against the accused persons inasmuch as the commission of alleged offence has been attributed to the neglect on the part of the accused persons the learned magistrate appears to be quite justified in taking cognizance against the accused persons on such allegation. As such it cannot be said that the learned Magistrate took cognizance mechanically without applying his mind to the allegation made in the petition of complaint. So, the third contention also fails.
11. All the contentions having failed, the instant revisional application must also fail.
12. The revisional application is dismissed. Stay order is vacated. The learned judicial Magistrate is directed to dispose of the case as expeditiously as possible. He, however, shall not be influenced by any observation of this Court regarding the merits of the case.
13. Let a copy of this order be sent to the learned Judicial Magistrate immediately.