Supreme Court on Sentencing

Sasikala vs State of Andhra Pradesh

Grounds for making Directors of Company Liable u/s 141 of NI Act

S.M.S. Pharmaceuticals Ltd. Vs :Neeta Bhalla and Anr.

Supreme Court
 AIR 2005 SC 3512

Reference made by two judge bench for determination of the following questions by a larger Bench :

"(a) whether for purposes of Section 141 of the Negotiable Instruments Act, 1881, it is sufficient if the substance of the allegation read as a whole fulfill the requirements of the said section and it is not necessary to specifically state in the complaint that the persons accused was in charge of, or responsible for, the conduct of the business of the company.

(b) whether a director of a company would be deemed to be in charge of, and responsible to, the company for conduct of the business of the company and, therefore, deemed to be guilty of the offence unless he proves to the contrary.

(c) even if it is held that specific averments are necessary, whether in the absence of such averments the signatory of the cheque and or the Managing Directors of Joint Managing Director who admittedly would be in charge of the company and responsible to the company for conduct of its business could be proceeded against."

 In view of the above discussion, our answers to the questions posed in the Reference are as under:

(a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied.

(b) The answer to question posed in sub-para (b) has to be in negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases.

(c) The answer to question (c ) has to be in affirmative. The question notes that the Managing Director or Joint Managing Director would be admittedly in charge of the company and responsible to the company for conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as Managing Director or Joint Managing Director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under Sub-section (2) of Section 141.

"To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a persons can be subjected to criminal process. A liability under Section 141 of the Act is sought to be fastened vicariously on a person connected with a Company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of the Act contains the requirements for making a person liable under the said provision. That respondent tails within parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141 he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of Section 141. Even a non director can be liable under Section 141 of the Act. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial."

Act may be declared unconstitutional with passage of time

Malpe Vishwanath Acharya and Ors.

Vs.

State of Maharashtra and Anr.

Supreme Court, 3 judge

AIR1998SC602

A legislation which, when enacted, was justified on considerations of necessity and expediency may, with the passage of time, become arbitrary and unreasonable in changing circumstances.

There is considerable judicial authority in support of the submission of learned counsel for the appellants that with the passage of time a legislation which was justified when enacted may become arbitrary and unreasonable with the change in circumstances. In the State of Madhya Pradesh v. Bhopal Sugar Industries,

MANU/SC/0099/1964 : [1964]52ITR443(SC) dealing with a question whether geographical classification due to historical reasons would be valid this Court at page 853 observed as follows :

"Differential treatment arising out of the application of the laws so continued in different regions of the same reorganised, State, did not therefore immediately attract the clause of the Constitution prohibiting discrimination. But by the passage of time, considerations of necessity and expediency would be obliterated, and the grounds which justified classification of geographical regions for historical reason may cease to be valid. A purely temporary provision which because of compelling forces justified differential treatment when the Reorganisation Act was enacted cannot obviously be permitted to assume permanency, so as to perpetuate that treatment without a rational basis to support it after the initial expediency and necessity have disappeared.

Issues regarding BRTS Corridor in Bhopal & Indore

CIVIL APPEAL NO. 11307 OF 2016 [Arising out of SLP [C] No.30998 of 2010]

Ravindra Ramchandra Waghmare …. Appellant Vs. Indore Municipal Corporation & Ors. ….Respondents

http://supremecourtofindia.nic.in/FileServer/2016-11-29_1480419496.pdf

Courts cannot legislate and act beyond the lis

State of Uttar Pradesh Vs Subhash Chandra Jaiswal and Others
CIVIL APPEAL NO.11381OF 2016 (Arising out of S.L.P.(C) No.26961 of 2016)

Supreme Court judgement. (http://supremecourtofindia.nic.in/FileServer/2016-12-08_1481196550.pdf)

"A court cannot take steps for framing a policy. As is evincible, the directions issued by the High Court and the queries made by it related to various spheres which, we are constrained to think, the High Court should not have gone into. It had a very limited lis before it. Be it stated, the directions may definitely show some anxiety on the part of the learned Judges, but it is to be remembered that directions are not issued solely out of concern. They have to be founded on certain legally justifiable principles that have roots in the laws of the country. "

"A Judge should not perceive a situation in a generalised manner. He ought not to wear a pair of spectacles so that he can see what he intends to see. There has to be a set of facts to express an opinion and that too, within the parameters of law.

"Having noted the aforesaid submissions, it is necessary to state that it is expected that the High Courts while dealing with the lis are expected to focus on the process of adjudication and decide the matter. The concept, what is thought of or experienced cannot be ingrained or engrafted into an order solely because such a thought has struck the adjudicator. It must flow from the factual base and based on law. To elaborate, there cannot be general comments on the investigation or for that matter, issuance of host of directions for constituting separate specialized cadre managed by officials or to require an affidavit to befiled whether sanctioned strength of police is adequate or not to maintain law and order or involvement of judicial officers or directions in the like manner. To say the least, some of the directions issued are not permissible and all of them are totally unrelated to the case before the High Court. We are constrained to say that the High Court should have been well advised to restrict the adjudicatory process that pertained to the controversy that was before it."

Courts cannot grant relief not prayed for

Cases:
Bharat Amratlal Kothari vs Dosukhan Samadkhan Sindhi, AIR 2010 SC 475,

Krishna Priya Vs University of Lucknow (1984) 1 SCC 307
Courts cannot, ignoring and keeping aside the norms and principles governing grant of relief, grant relief not even prayed for by the party.

Om Prakash vs Ram Kumar (1991) 1 SCC 441: A party cannot be granted a relief which is not claimed, if the circumstances of the case are such that the granting of such  relief would result in serious prejudice to the interested party.

General Motors (India) Pvt ltd Vs Ashok Ramnik Lal Tolat (2015) 1 SCC 429: The order of the NCDRC in granting punitive damages to the complainant therein was set aside on the ground that such relief was neither sought in the complaint nor before the state commission.

Sahara India Commercial corporation ltd vs Mukamala Natraja Rao IV (2014) CPJ 172 (NC): A direction to hand over maintenance and control over the common facilities was held to be beyond the relief sought in the pleadings of the complaint.

The Computeronics International Limitrd vs Infinite Computer Solu Pvt Ltd & Ors 2007 (34) PTC 189 (Del) & K.P.M. Aboodbucker vs K. Kunhamoo AIR 1985 Mad 587:

Where no relief could be granted to a party in the main suit itself, it is not permissible to grant any interim relief, to be operative till the disposal of the matter.

Principles of Anticipatory Bail

Case: Bhadresh Bipinbhai Seth Vs State of Gujarat & Anr.
Supreme Court
Criminal Appeal Nos. 1134-1135 of 2015.

Also discussed: Gurbaksh Singh Sibbia vs State of Punjab (1980) 2 SCC 565