MANNALAL CHAMARIA AND ANR. v. STATE OF WEST BENGAL AND ANR. INSC 196

Name of the case: MANNALAL CHAMARIA AND ANR. v. STATE OF WEST BENGAL AND ANR.

Facts: Heritage Herbs had made an offer for collecting money from the market with a view to allot land to the intending investors. On the basis of the offer made, Pradip Sarkar invested an amount of Rs.1,50,000/- and Heritage Herbs issued three receipt-cum-allotment letters for three plots of land to Pradip Sarkar. At the time of handing over the receipt-cum-allotment letters, Pradip Sarkar was also handed over three cheques of Rs. 61,000/- each post dated to 29th October, 2000. These cheques were issued by Heritage Herbs and were signed by Raj Kumar Chamaria as Chairman of the said concern. All the three cheques were dishonored by the concerned bank. This led Pradip Sarkar issued a notice and initiated proceedings against Heritage Herbs and Raj Kumar Chamaria under the provisions of Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. During the pendency of the proceedings Raj Kumar Chamaria died on 10th December 2003. 28th April 2004 - Pradip Sarkar moved an application for impleading the appellants as accused persons. The application was allowed, and the appellants were impleaded as accused persons by the concerned Magistrate and summons issued to them. The appellants preferred Criminal Revision Petitions in the Calcutta High Court, which dismissed the petitions. The appellants have challenged the order of the Calcutta High Court. The contention of appellants is that no specific allegations were made against them either in the complaint as originally filed on 31st March, 2001 or in the amended complaint filed on 28th April 2004.

Issues The alleged failure (and consequential effect) of Pradip Sarkar to specifically state in his complaint filed under Sections 138 and 141 of the Negotiable Instruments Act, 1881 that the appellants/accused persons were in charge of and responsible for the conduct of the business of M/s. Heritage Herbs Ltd. of which they were said to be Directors.

Holding: The complaint against the appellants deserves dismissal. A contrary view taken by the High Court cannot be accepted. Accordingly, the appeals are allowed and the order passed by the High Court is set aside.

Rationale: In A.K.Singhania vs. Gujarat State Fertilizer Company Ltd. it was decided that it is necessary for a complainant to state in the complaint that the person accused was in charge of and responsible for the conduct of the business of the company. Although, no particular form for making such an allegation is prescribed, and it may not be necessary to reproduce the language of Section 138 of the Negotiable Instruments Act, 1881, but a reading of the complaint should show that the substance of the accusation discloses that the accused person was in charge of and responsible for the conduct of the business of the company at the relevant time. From the averment made in the complaint, which is reproduced above, it can safely be said that there is no specific or even a general allegation made against the appellants.