Tuesday, March 31, 2020 | ePaper

Negotiable Instruments Act, 1881

Managing Director is responsible for acts done in the company name

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High Court Division :
(Criminal Miscellaneous Jurisdiction)
AKM Abdul Hakim J  
SM Mozibur Rahman J
Didarul Alam ………..Petitioner    
State and others……..Opposite-Parties.
Judgment
March 28th, 2017
Negotiable Instruments Act (XXVI of 1881)
Section 140
A company being a juristic person, all its deeds and functions are the result of the acts of Managing Director. A Managing Director of the company is responsible for acts done in the name of the company. The accused-petitioner was Managing Director of the company at the time of offence committed or done within his knowledge. He is responsible for the conduct of the business of the company and in such situation when the Managing Director of the company is made party, there is no necessity for making the company as party………………………………(22)
Code of Criminal Procedure (V of 1898)
Section 561A
The petitioner caused wasting of money and time of the complainant party, and also reached undesirable tax on the court's valuable but limited time. This being the situation, we feel it necessary to pay off the petitioner by their own coin. Considering, the conduct of the petitioner as vexatious aimed at delaying the sessions case, the opposite-party No.2 should be awarded with cost for loss………………………………… (26)
M Anwar Hossain vs Md Shafiqul Alam (Chand), 1999 BLD (AD) 166 = 51 DLR (AD) 218 ref.
Anabilananda Roy Advocate-For the Petitioner.
Md Harun-Ar-Rashid DAG with Shah Abdul Hatem AAG and MA Kamrul Hasan Khan, AAG-For the State-Opposite Party No.1.
Md Ziauddin, Advocate-For the Opposite-Party No. 2.
Judgment
AKM Abdul Hakim J : On an application under Section 561A of the Code of Criminal Procedure filed by the petitioners, this Rule was issued calling upon the opposite parties to show cause as to why the proceeding of Sessions Case No. 2612 of 2013 arising out of CR Case No.2730 of 2011 under Section 138 of the Negotiable Instruments Act, 1881 now pending in the Additional Metropolitan Sessions Judge, 2nd Court, Chittagong should not be quashed and/or passed such other or further order or orders as to this court may seem fit and proper.
2. In this application the proceeding under Section 138 of the Negotiable Instruments Act, 1881 has been challenged mainly on the ground that the complaint petition was filed after expiry of 1 (one) month on which the cause of action arises under Section 138 (l)(c) read with Section 141 (b) of the Negotiable Instruments Act, 1881.
3. Added-Opposite party No.2 as complainant filed a petition of complaint under Section 138 of Negotiable Instruments Act on 28-11-2011 alleging, inter alia, that the accused-petitioner is the Managing Director of the Al-Kowsar Properties Ltd. That the accused petitioners took a huge amount of money from the complainant as a loan for investing in their said company and for repayment of the loan amount the accused-petitioner made an agreement on 4-6-2011 and later issued a cheque of Islami Bank Bangladesh Ltd., Chokbazar Branch, Chittagong bearing No. IBG 2743389 dated 31-8-2011 for Taka 3,33,000 (Three lac thirty three thousand) only with joint signature and same was presented to the concerned bank on 5-9-2011 and the said cheque was dishonoured on the same date for insufficient fund. In view of the dishonour, the complainant send a legal notice to the petitioner on 21-9-2011 for payment of the said amount, which was received by the Managing Director of the company on 29-9-2011 and Chairman of the company on 27-9-2011 but no step was taken by the accused-petitioners to pay the said money. Hence the complainant was constrained to file the present case on 28-11-2011.
4. Upon receipt of the complaint, the learned Metropolitan Magistrate Chittagong took cognizance of the offence under Section 138 of the Negotiable Instruments Act, 1881 and thereby issued summons upon the accused persons to face the trial.
5. The Chief Metropolitan Magistrate, Chittagong transmitted the case record to the Court of Metropolitan Sessions Judge, Chittagong which was renumbered as Sessions Case No. 2612 of 2013 and subsequently the case was sent to the Additional Metropolitan Sessions Judge, Second Court, Chittagong for trial. It appears that the accused petitioners were on bail.
6. Thereafter, the accused petitioners filed an application under Section 265C of the Code of Criminal Procedure for discharging them from the case and ultimately charge was framed on 31-3-2014 against the accused petitioner under Section 138 of the Negotiable Instruments Act and fixed on 27-4-2014 for examination of witnesses.
7. Being aggrieved by and dissatisfied with the said proceedings the petitioner moved this court by filing an application under Section 561A of the Code of Criminal Procedure and obtained the present rule and stay.
8. Mr. Anabilananda Roy, the learned Advocate for the accused-petitioner submits that the complainant opposite party filed the present case in not complying the provisions of Clause (b) of Section 141 of the Negotiable Instruments Act that is the complaint petition not having been filed within one month of the date on which the cause of action arose under Clause (c) of the proviso to Section 138(1) of the Act. Thus cognizance should not be taken upon such complaint.
9. He further submits that in the present case the cheque was issued on 31-8-2011 with joint signature of the petitioner which was presented for encashment on 5-9-2011 but same was dishonoured on the same date, whereupon the complainant issued separate legal notice on 21-9-2011 upon the accused petitioner for payment of the cheque amount within 30 days and the accused petitioner received the legal notice on 29-9-2011. Therefore, the cause of action arose on 27-9-2011 under Clause (c) of the proviso of the Section 138. Admittedly the petition of complaint was filed on 28-11-2011 which is not filed within the statutory period of one month as provided under Section 141 clause (b) read with proviso to Section 138(1) of the Negotiable Instruments Act, 1881. Thus the taking of cognizance was illegal and, therefore the proceeding is liable to be quashed. He finally submits that admittedly the accused-petitioner as the Managing Director of company jointly signed the cheque with the Chairman of company but the company has not been implicated as accused, thus the present proceeding without implicating the principal accused, the cheque in question being issued on behalf of the company, the impugned proceeding is not sustainable in law.
10. Mr. Md. Ziauddin, the learned Advocate for the opposite party No. 2 submits that the complaint petition was filed on 28-11-2011 which is within one month as contemplated under Section 141 Clause, (b) of the Negotiable Instruments Act. He further submits that the accused-petitioner being the Managing Director of the company cannot avoid their liability to pay the amount due under this dishonoured cheque as per provision of Section 140 of the Negotiable Instruments Act. Accordingly, the learned Advocate prayed for discharge of the rule.
11. We have perused the application under Section 561 A along with the paper annexed with affidavit-in-opposition filed by the opposite party and considered the submissions of the learned Advocate for both the parties.
12. To appreciate the arguments of learned Advocate, the following provisions of Negotiable Instruments Act may be quoted:
"Section 138.-Dishonour of cheque for insufficiency, etc. of funds in the account-
(1) Where any cheque…………………………………………….
Provided that nothing contained in this Section shall apply unless-
(a)    â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦
(b)    â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦
(c)    the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within (thirty days) of the receipt of the said notice.
141. Cognizance of offences-Not with-standing anything contained in the Code of Criminal Procedure, 1898 (Act V of 1898)-
(a) no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque:
(b) such complaint is made within month of the date on which the cat of action arises under Clause (c) the proviso to Section 138;
(c) no court inferior to that of a Court ( Sessions shall try any offence punishable under Section 138."
13. Now the first question that arises for determination in the present case is when the limitation starts under Section 141 (b) of the Negotiable Instruments Act, 1881, to file a complaint for the offence committed under Section 138 of the said Act.
14. From the plain reading of Sections 138 (l)(c) and 141(b) of the Negotiable Instruments Act, it is manifest that there is 30 days time for payment of the amount due under the cheque from the date of receipt of notice regarding dishonour issued by payee. Therefore the opposite party No. 2 have to wait for 30 days anticipating payment of the amount by the petitioners. After expiry of the said 30 days, if the petitioner did not pay the amount, cause of action starts from the 31 days on wards. The limitation to file a complaint petition as prescribed under Section 141 (b) of the Act is one month. The period of limitation, therefore, starts from 3 I days after receipt of the notice by the petitioner.
15. On the critical analysis of the facts and circumstances of the case, especially with the point of limitation it appears from the complaint petition that the cheque was issued on 31-8-2011 for payment of Taka 3,33,000 (Three lac thirty three thousand) only with joint signature of the Accused-petitioners and it was dishonoured on 5-9-2011 on the ground of insufficiency of the fund. So, the cheque was bounced within six months from the date of issuance of the cheque. It further appears that as per Proviso (b) of sub-section (1) of Section 138 the complainant opposite party No. 2 also made a demand for the payment of the said amount by giving registered notice on 21-9-2011 in writing to the accused petitioner within 30 days after the cheque is returned unpaid on 5-9-2011 and the accused petitioner being the Managing Director received the said legal notice on 29-9-2011. Thus the complainant opposite party No.2 has fulfilled two conditions out of the above mentioned three conditions. The third condition is whether the opposite party has filed the case within one month of the cause of action arises on 27-9-2011 under Clause (c) sub-Section (I) of Section 138 of the Negotiable Instruments Act and the complainant filed the case on 28-11-2011 that is after 62 days from the date of receipt of the notice (inclusive the date receipt of notice).
16. The learned Advocate for the accused petitioner strongly submits that the date of receipt notice has to be included in computing the period of 30 days for payment of money plus another 30 days including the last date of making payment. According to the submissions of the learned Advocate, if the date of receipt and last date of payment are inclusive, then it comes to 62 days on 26-11-20 II but complaint was filed on 28-11-2011. Against such manner of computation, the learned Advocate for the opposite party No. 2 submits that computation of limitation period in every stage shall start running from the following date of the date on which specified time expired. It is contended that the date of receipt of the legal notice and expiry date for paying money of the dishonoured cheque shall be excluded for the purpose of computation as contemplated under Section 138 and 141 of the Negotiable Instruments Act and those date cannot be inclusive. In this respect, reliance may be placed on the decision in the case of SM Anwar Hossain vs Md Shafiqul Alam (Chand) reported in 1999 BLD (AD) 166 = 51 DLR (AD) 218. It appears from the said decision that the period of limitation shall start running after expiry of specified period for the purpose of ascertaining cause of action and last date of filing the case.
 (To be continued)

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