Engineer Sirajul Islam Vs. Md. Nazrul Islam, (Muhammad Khurshid Alam Sarkar, J.)

Case No: Criminal Miscellaneous Case No. 48507 of 2017

Judge: Md. Rezaul Haque, J And Muhammad Khurshid Alam Sarkar, J.

Court: High Court Division,

Advocate: Mr. A.S.M. Shahriar Kabir with Ms. Zareen Rahman and Mrs. Shamima Akhter, Advocates,Mr. Sheikh Awsafur Rahman with Mr. K.M. Sagir, Advocates, Mr. A.Z.M. Mohiuddin with Mr. Mir Mohammad Awlad Hossain, Advocates ,

Citation: 2019(1) LNJ

Case Year: 2018

Appellant: Engineer Sirajul Islam and another, Md. Nazrul Islam and others

Respondent: The State and another

Subject: Code of Criminal Procedure (V of 1898) Section 561A

Delivery Date: 2019-11-24

HIGH COURT DIVISION

(criminal miscellaneous jurisdiction)

Md. Rezaul Haque, J

And

Muhammad Khurshid Alam Sarkar, J.

 

Judgment on

30.05.2018

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Engineer Sirajul Islam and another

. . .Accused -Petitioners

(In the Crl. Misc.  Case Nos. 48507,     48508,49931, 49932 and 54700 of 2017 )

Md. Nazrul Islam and others

---Accused -Petitioners

(In the Crl. Misc. Case Nos. 27457, 28148 and 36067 of 2017)

-Versus-

The State and another

. . . Complainants-Opposite-Parties

Code of Criminal Procedure (V of 1898)

Section 561A

Negotiable Instruments Act (XXVI of 1881)

Sections 138 and 140

Since the learned Advocate for the accused-petitioners has made out a prima facie case of abusing of the process of the Court in taking cognizance of offence under Sections 138 & 140 of the NI Act against these petitioners, on the ground of non-disclosure of any offence in the petition of complaints, we are of the view that the petitioners are competent to directly invoke the inherent jurisdiction of this Court, ignoring the forum of revision. . . . (17)

Code of Criminal Procedure (V of 1898)

Section 200

From a plain reading of Section 200 of the CrPC, it appears that in order to take cognizance, the prior requirement is to have a prima facie satisfaction by the Magistrate as to commission of an offence by the accused. In articulating it, all that may be said are that upon receiving a petition of complaint when the Magistrate decides to examine the complaint, s/he is statutorily bound to primarily satisfy her/himself as to commission of an offence and only after being prima facie satisfied that an offence might have been committed, the Magistrate acquires her/his competency, in other words s/he becomes authorized by the aforesaid statutory provision, to take cognizance.         . . . (19)

Negotiable Instruments Act (XXVI of 1881)

Section 138

For constituting of an offence under Section 138 of the NI Act, a series of steps are required to be taken and exhausted, namely (i) there should be a cheque issued by a person/company, (ii) the said cheque should be placed to the concerned bank within 6 months of the time inscribed in the cheque or within the validity period of the cheque, (iii) the cheque should be dishonored, (iv) a demand/legal notice should be issued by the payee to the drawer of the cheque within thirty days from the date of receipt of the information as to dishonoring of the cheque, (v) after receiving the demand/legal notice by the drawer of the cheque either by hand/registered post or by publication in the daily national newspaper, the payee should wait for thirty days to see whether the payment is made by the drawer of the cheque and (vi) if the payment is not made within the aforesaid period, then, the offence is constituted and, accordingly, a payee becomes in a position to file a criminal case.     . . . (21)

Negotiable Instruments Act (XXVI of 1881)

Section 140

While Sub-Section (1) of Section 140 of the NI Act makes provision for proceeding against the persons (the words employed in the statute are- “shall be liable to be proceeded against”) who are in charge of , and was responsible to, the company at the time of committing the offence in addition to the company herself, its Proviso makes defensive provision; by dint of which a category of the accused, who have been named in sub-Section (1) of Section 140 of the NI Act, may not be liable to the punishment. Thus, from a minute reading of the Proviso to Section 140 of the NI Act, it appears to us that defence may be taken by the accused-directors to escape from the punishment; but not to get released from the accusation of commission of offence. On the other hand, the category of person stated in sub-Section (2) of Section 140 of the NI Act may be proceeded against only after obtaining any proof as to their consent/ connivance/negligence. It follows that although Section 140 of the NI Act, as a whole, speaks about three categories of accused persons, namely (1) the company, (ii) every person who was in charge of, and responsible to, the accused-company at the time of commission of offence and (iii) any director, manager, secretary or other officer of the accused-company who has consented to, or connived with, commission of any offence under the NI Act, including the offence under Section 138 of the Act, however, only the first two categories of the persons namely, (i0 the company and (ii) every persons who are in charge of , and responsible to, the company, may be proceeded against on the basis of other “deemed guilt”; and in order to proceed against the third category of person/s, a “proved guilt” is required.              . . . (24)

Negotiable Instruments Act (XXVI of 1881)

Section 140

These three persons have been arraigned as accused without disclosing specific allegation against them, but merely on the basis of ‘deemed guilt’. From a minute perusal of the provision of Section 140 (1) of NI Act, all that we understand is that firstly the company, being a juristic person, herself and, secondly, every person who are conducting the business of the company, being in a charge of the company and responsible to the company, would be deemed guilty of commission of any offence under Section 138 of the NI Act. Admittedly, these three accused-petitioners are the directors of the accused-company with the identities of the Chairman, Deputy Managing Director and Director (operation) and, undeniably, they all are the members of the Board of Directors (BOD) of the accused company and, accordingly, they are supposed to be in charge of, and responsible to, the company for the conduct of the business of the company. Section 140 of the NI Act provides that when the offender is a company, every person, who at the time when the offence was committed was in charge of and was responsible to the company for the conduct of the business of the company, shall also be deemed to be guilty of the offence along with the company. Since a company, being a juristic person, operates through the BoD consisting of the Chairman, Managing Director, Joint/Deputy Managing Director and other Directors, the members of the BoD normally be impleaded as accused for their ‘deemed guilt’ along with the company when there arises an occasion by anybody to file a criminal case against the company.      . . . (25 and 26)

Md. Shamim Vs. The State, 10 ALR (HCD) 2017 (2) 286; Darul Ihsan University Vs. Bangladesh, 8 ALR 2016(2) 55; Standard Chartered Bank Vs. State of Maharashtra, (2016) 6 SCC 62; Gunmala Sales (P) Ltd (2015) 1 SCC 103; AK Singhania Vs. Gujrat State Fertilizer Co. Ltd (2013) 16 SCC 630; Aneeta Hada Vs. Godfather Travels and Tours Pvt. Ltd (2012) 5 SCC 661; National Smal Industries Vs. Harmeet Singh Paintal, 2010, SCC 330; KK Ahuja Vs. KK Vora (2009) 10 SCC 48; Everest Advertising Pvt. Ltd Vs. State (Govt. of Net of Delhi) (2007) 5 SCC 54; SMS Pharmaceuiticals Ltd. Vs. Neeta Bhalla (2005) 8 SCC 89; Monaben Ketanbhai Shah Vs. State of Gujrat (2004) 7 SCC 15; Securities and Exchange Commission Vs. Runa N Alam, 57 DLR (AD) 161; Nizam Uddin Mahmood Vs. Abdul Hamid H Bhuiyan 1 ADC 274; Eusof Babu Vs. State 68 DLR (AD) 298 and Kamar Uddin Vs. The State 12 ALR 2018 (1) 171 ref.

Mr. A.S.M. Shahriar Kabir with

Ms. Zareen Rahman and

Mrs. Shamima Akhter, Advocates

. . . For the petitioners

(In all the cases)

Mr. Sheikh Awsafur Rahman with

Mr. K.M. Sagir, Advocates

(In the Criminal Miscellaneous Case Nos. 48507)

Mr. A.Z.M. Mohiuddin with

Mr. Mir Mohammad Awlad Hossain, Advocates

. . . For opposite party No. 2

(In the Criminal Miscellaneous Case Nos. 48508,49931, 49932, 54700 ,27457, 28148 and 36067 of 2017)

JUDGMENT

Muhammad Khurshid Alam Sarkar, J: All the Rules are taken up together for hearing and disposed of by a single Judgment, as they involve common questions of facts and laws.

2.             The Rules, in all these cases, were issued in identical terms and, therefore, mentioning of the terms of only one Rule should suffice the purpose of adjudication of all the Rules. In Criminal Miscellaneous Case No. 48507 of 2017, Rule was issued in the following terms:

“Let a Rule be issued calling upon the opposite parties to show cause as to why the proceedings of Sessions Case No. 1861 of 2017, arising out of C.R. Case No. 737 of 2016, under Sections 138/140 of the Negotiable Instruments Act, 1881, so far as it relates to the accused-petitioners, now pending before the Additional Metropolitan Sessions Judge, 1st Court, Dhaka should not be quashed.”

3.             The above-mentioned Sessions Case together with a number of other Sessions Cases have arisen out of a bunch of CR Cases filed under Sections 138 and 140 of the Negotiable Instruments Act, 1881 (shortly, the NI Act) by three companies, namely, (i) M. I. Cement Factory Ltd, (ii) Crown Cement Concrete and Building Products Ltd and (iii) GPH Ispat Ltd, who are sister-concerns to each other, (hereinafter referred to as the complainant-companies or the complainants) against the Project Builders Ltd, a private limited company, its Chairman, Managing Director, Deputy Managing Director and Director (hereinafter referred to as the accused-company or the accused-petitioners or the accused) alleging, inter alia,  that the accused-company had issued some cheques in favour of the complainant-companies, but the said cheques have been dishonoured and, thereafter, when the complainants issued legal notice within the statutory period, none of the accused from the accused-company came forward to take any step for payment of the cheques. After examining the complainants of the respective cases under Section 200 of the Criminal Procedure Code, 1898 (CrPC), cognizance was taken by the competent Magistrates against all the accused and, when the cases were sent for trial to the concerned Court, the trial Court framed charges against all the accused.

4.             At the time of framing charges, three accused, who  happens to be the Chairman, Deputy Managing Director and Director of the accused company, filed applications under Section 265C of the CrPC, mainly contending that (i) no allegations against these three accused have been made in any of the petitions of complaint and, thus, the said petitions of complaint having not disclosed any offence, taking cognizance against these three accused was illegal and (ii) because of merely holding the posts of the Chairman, Deputy Managing Director and Director, these three petitioners cannot be made accused under Sections 138 and 140 of the NI Act, as they did not issue the cheques in question, nor were they in charge/responsible for the conduct of the business of the accused-company. After hearing the applications under Section 265C of the CrPC, when the trial Court rejected the same and framed charge against these three accused, they approached this Court invoking its inherent power under Section 561A of the CrPC challenging the proceedings and hence these Rules.

5.             Mr. A.S.M. Shahriar Kabir, the learned Advocate appearing for all these accused-petitioners, takes us through the petitions of complaint and points out that no averment has been made therein by the complainants against these accused-petitioners. He submits that since no allegation has been made in the petitions of complaint against these three accused, there cannot be any criminal case against them. By placing the provisions of Section 200 CrPC, he submits that it is the statutory requirement for the Magistrate to have a satisfaction that the allegation disclosed in the petition of complaint against any accused comes within the purview of any offence. He argues that the learned Magistrate took cognizance of offence under Sections 138 & 140 of the NI Act against these accused without having his satisfaction for taking cognizance. To clarify his above argument, he submits that it is difficult to comprehend not only for a lay person but even for a person of extra ordinary prudence, as to what basis or as to under what reference/ information the learned Magistrate has taken cognizance against these three accused in absence of any statements in the petitions of complaint against these accused. He goes on to profess that in the absence of any averments in the petition of complaint when a Magistrate takes cognizance against any accused, the accused does not get any opportunity to see as to what the offence/allegation has been brought against her/him.

6.             He continues to submit that the consequence of taking of cognizance of any offence against an accused person by a Magistrate is kind of harassment for the said accused, given the procedural cumbersomeness to get discharged from or acquittal of a criminal case in our country. In elaborating his above count of submissions, he submits that when summon is issued by a Magistrate upon taking cognizance of an offence against any person, the said accused is duty bound to face the proceedings before the Court at the cost of losing his valuable time from his professional, personal and family life on top of spending money in dealing with the case. He submits that without looking at the averments of the petition of complaint and, thereby, without being satisfied as to the nature of allegation brought by a complainant against an accused, if cognizance is taken against any person, it amounts to abusing the process of the Court. He argues that since no allegation was made in the petitions of complaint against these three accused-petitioners, taking cognizance against them by the Magistrate and continuation of the said proceedings are clearly abuse of the process of the Court and, accordingly, as per him, the instant proceedings are liable to be quashed. In support of his above submissions, the learned Advocate for the accused-petitioners refers to and relies on a long list of case-laws of Indian jurisdiction and a few of our jurisdiction. 

7.             Another submission was pressed into service by the learned Advocate for the accused for quashing two of the cases out of these bundle of the cases, in which the company was not impleaded as accused, on the ground that since the company is the principal offender and the rest accused are the abettors, the said two cases cannot continue for non-impleadment of the principal offender.

8.             On the question of maintainability of these petitions under Section 561A of the CrPC, he submits that since the accused-petitioners are questioning the very birth of these proceedings on top of challenging the Order passed by the trial Court in disposing of the applications under Section 265C of the CrPC, the accused-petitioners’ direct approach before this Court by invoking its inherent power,  instead of seeking revision of the Order passed by the trial Court, is well within the parameter of the law.

9.             By making the above submissions, the learned Advocate for the accused-petitioners prays for quashing the proceedings in question and, thereby, for making all the Rules absolute.

10.          Per contra, Mr. K.M. Sagir, the learned Advocate appearing for one set of the complainant-opposite parties, refers to the ‘cause title’ of the petitions of complaint and submits that the accused-petitioners have been impleaded in all these cases as the Chairman, Deputy Managing Director and Directors of the company and in view of the admitted fact that the cheques have been issued on behalf of the company, therefore, all the directors,  irrespective of their portfolio in the accused-company, are liable for the offence committed by the accused-company. The learned Advocate for the complainants thereafter takes us through the averments made by the complainants in their applications under Section 265C of the CrPC and, by referring to paragraph 4 thereof in particular, submits that these accused-petitioners have admitted the fact that they are the directors of the company and the cheques were issued as the security-instruments in favour of the complainants against the supply of goods, but due to the failure of the supply of agreed goods by the complainants the payments were not made. By pointing out to the above statements, the learned Advocate for the complainants submits that the accused-petitioners after admitting the fact that as the directors of the accused-company, they have the knowledge about the transactions between the complainant-companies and the accused-company, they cannot escape their liability to pay off the money to the complainant-companies. In an effort to substantiate the above count of submissions, the learned Advocate for the complainants places the provisions of Sections 17, 18 and 58 of the Evidence Act, 1872 (Evidence Act) and submits that when a fact is admitted by any party through making any statement, there is no legal requirement to prove the said statement by examining any witnesses before the trial Court.

11.          The learned Advocate for the complainants, thereafter, takes us through the Articles and Memorandum of Association of the accused-company and by referring to Clause 48  of the Articles of Association of the said accused-company, he contends that it is clearly inscribed therein that all the directors of the company shall be liable for paying off any debt or any other liability of the company and, therefore, the accused-petitioners being the directors of the accused-company are liable to pay off the amount of money which fell due and, by not paying off the said money, in other words by not honoring the cheques as the directors of the accused-company, the accused-petitioners, have committed an offence under Section 138 read with Section 140 of the NI Act and, accordingly, they have been rightly impleaded as the accused in these cases as per the provisions of law.

12.          Mr. A.Z.M. Mohiuddin, the learned Advocate appearing for another group of complainant-opposite parties, while joins his voice with Mr. KM Sagir by making the same arguments, however, he adds that the ground of ‘abusing of the process of Court’ taken by the accused-petitioners, in fact, is applicable in favour of the complainants, for, these accused-petitioners are abusing the provisions of inherent power of this Court by filing the instant frivolous applications under Section 561A CrPC for the sole purpose of delaying the trial of these cases.

13.          By making the above submissions and referring to a number of case-laws of our jurisdiction and that of foreign jurisdiction, the learned Advocates for the complainants pray for discharging the Rule with a direction upon the trial Court to expeditiously dispose of all the cases.

14.          Having heard the learned Advocates for both the sides and upon going through the applications under Section 561A of the CrPC as well as their counter-affidavits along with their annexures and the relevant laws and decisions, it appears to us that the fallowing questions are to be examined; (i) whether the accused-petitioners are competent to approach this Court directly under Section 561A of the CrPC, (ii) whether the learned Magistrate committed any illegality in taking cognizance against these accused-petitioners and (iii) whether the cases in which the company has not been made a party, are liable to be quashed.

15.          Since the question of maintainability of these Rules has been raised on the ground of directly invoking the forum of inherent power of this Court following rejection of the petitioners’ applications under Section 265C of the CrPC, let us pick up the said preliminary/technical issue on priority basis. From the record it transpires that in all the Sessions cases, the accused-petitioners had filed applications under Section 265C of the CrPC before the trial Court for discharging them and the same were rejected and, against the said rejection Orders, the petitioners’ usual route of approaching this Court is its revisional jurisdiction, if the accused-petitioners’ grievance is centered around the legality and propriety of the Order passed by the trial Court. However, it is the submission of the accused-petitioners that they, instead of opting for the forum of revision, have preferred to invoke the inherent power of this Court on the ground that they are challenging the proceedings itself; they are not challenging solely the Order of the trial Court. Let us now consider the above submissions.

16.          It is the settled principle of our jurisdiction that the very filing of a criminal case, in other words, the entire criminal proceedings, may be challenged by an accused at any stage. The said stage may be immediate after filing of the case in the police station/Court or during investigation/inquiry of the case or may be at any phase of the trial or may be at any point of time after pronouncement of the Judgment. If the accused, at any point of time before pronouncement of the Judgment, can primarily satisfy this Court that the allegation brought against her/him does not constitute any offence or it is ex-facie preposterous or mala fide or apparently the proceeding is directed at harassing the accused, or the same is nakedly an abuse of the process of Court or is barred by law or the trial Court does not have the jurisdiction to try the case, in any of the above situations, an application under Section 561A of the CrPC is entertainable despite availability of the appellate or revisional forum, as was held in the case of Syed Ehsan Abdullah Vs The State 2017(1) LNJ 135 upon revisiting scores of case laws of our jurisdiction and of foreign jurisdiction. An accused must bear in mind that normally this Court wishes to see that a criminal case is proceeded with as per the procedures enshrined in the CrPC and this Court is always loath in interfering with investigation or trial of a criminal case and, hence, usually no Rule shall be issued by this Court in a petition under Section 561A of the CrPC if the principles laid down hereinbefore are taken by the accused as stereotyped ground towards making rhetoric submission before this Court without specifically referring to factual aspect of the case from the FIR or police report or other prosecution materials. An accused must bear in mind the time-honored principle of this Court that only in exceptional circumstance, which is rarely found in practice, this Court would be inclined to issue Rule in a petition under Section 561A CrPC during a criminal case’s investigation or trial; this Court would not issue a Rule in a 561A petition as a matter of routine-work inasmuch as power of this Court under Section 561A CrPC is required to be used by this Court very sparingly in the rarest of rare cases towards examining the ground taken by the petitioner for quashing a criminal case, subject to the condition that the accused shall assist this Court in expeditiously disposing of the Rule without squandering any time, lest when the Rule is discharged the victim of the offence is denied justice because of the delay due to issuance of the Rule by this Court. Even, at any stage after the pronouncement of the Judgment and Order of conviction and sentence, be the stage is of appellate or direct-revisional or post-appellate revisional, if the accused can satisfy this Court that having no other alternative forum, s/he ‘has come in clean hands’ before the High Court Division ‘as a bonafide petitioner’ and the case is one of no evidence or the trial Court did not have jurisdiction to try the case or the Judgment suffers from malice in law, then, this Court is competent to issue a Rule towards examining the prayer of the accused to see whether the Judgment and Order of conviction and sentence in question should be quashed, as was held in the case of Md. Shamim Vs The State 10 ALR (HCD) 2017(2) 286. 

17.          In the cases in hand, the learned Advocate for the accused-petitioners has submitted that since the cognizance have been taken in all these cases against these three accused-petitioners in violation of the settled principles of law, continuation of these proceedings amounts to abuse of process of the Court. Therefore, it is their case that all these criminal cases must be nipped in the bud without letting them proceeded with further. Since the learned Advocate for the accused-petitioners has made out a prima facie case of abusing of the process of the Court in taking cognizance of offence under Sections 138 & 140 of the NI Act against these petitioners, on the ground of non-disclosure of any offence in the petition of complaints, we are of the view that the petitioners are competent to directly invoke the inherent jurisdiction of this Court, ignoring the forum of revision.

18.          We may now embark upon the substantive issue, namely, whether the learned Magistrate committed any illegality in taking cognizance of the offence against these petitioners. For a proper adjudication of this issue, it would be useful if we quote the provisions of Section 200 of the CrPC, which runs as follows;

200. A Magistrate taking cognizance of an offence on complaint shall at once examine upon oath the complainant and such of the witnesses present, if any, as he may consider necessary and the substance of the examination shall be reduced to writing and shall be signed by the complainant and the witnesses, and also by the Magistrate:

19.          From a plain reading of Section 200 of the CrPC, it appears to us that in order to take cognizance, the prior requirement is to have a prima facie satisfaction by the Magistrate as to commission of an offence by the accused. In articulating it, all that may be said are that upon receiving a petition of complaint when the Magistrate decides to examine the complainant, s/he is statutorily bound to primarily satisfy her/himself as to commission of an offence and only after being prima facie satisfied that an offence might have been committed, the Magistrate acquires her/his competency, in other words s/he becomes authorized by the aforesaid statutory provision, to take cognizance.

20.          In these cases, the complainants were examined by the Magistrate and, thereafter, the cognizance was taken and, therefore, there is a fair scope of taking a presumption by this Court that the Magistrate took the cognizance against these accused having been satisfied as to the commission of offence from the complainants’ statements recorded under Section 200 CrPC in addition to the allegations stated in the petitions of complaint against the accused-petitioners, for, when in a petition of complaint the allegations against the accused appear to the Magistrate to be obscure and unclear, the Magistrate is always competent to get a clearer statement from the complainant in course of recording the complainant’s statements under Section 200 CrPC towards having her/his satisfaction as to the veracity of the allegation of commission of offence. In these cases, while the petitions of complaints state the title of the accused-petitioners in the company, a little bit more description of the accused as to being in charge of the accused-company and, also, how they are responsible to the accused-company for the conduct of the accused-company could have assisted the Magistrate to have a better picture about the nature of allegation against these accused-petitioners. Non-making of clearer allegation or specific averments about the accused or non-impleadment of a party in the petition of complaint, apparently, is the fault of the learned Advocate who poorly drafted the complaint-petitions. It is an area where the University Grants Commission (UGC) and Bangladesh Bar Council need to work on urgent basis. About the said issue this Court, in the case of Darul Ihsan University Vs. Bangladesh 8 ALR 2016 (2)55, delved deeply and had made some useful directions upon the aforesaid two statutory bodies for the purpose of improvement of legal education as well as legal profession with an aim of upholding the prestige of the Judiciary.

21.          Secondly, the offence, which is alleged to have been committed by the accused-petitioners in these cases, is under Section 138 of the NI Act. For constituting of an offence under Section 138 of the NI Act, a series of steps are required to be taken and exhausted, namely, (i) there should be a cheque issued by a person/company, (ii) the said cheque should be placed to the concerned bank within 6 months of the time inscribed in the cheque or within the validity period of the cheque, (iii) the cheque should be dishonored, (iv) a demand/legal notice should be issued by the payee to the drawer of the cheque within thirty days from the date of receipt of the information as to dishonoring of the cheque, (v) after receiving the demand/legal notice by the drawer of the cheque either by hand/registered post or by publication in the daily national newspaper, the payee should wait for thirty days to see whether the payment is made by the drawer of the cheque and (vi) if the payment is not made within the aforesaid period, then, the offence is constituted and, accordingly, a payee becomes in a position to file a criminal case.

22.          In these cases, no question has been raised as to constitution of the offence, nor is any protest made as to commission of the said offence by the accused-company. In other words, it is an admitted position that an offence has been committed under Section 138 of the NI Act by the accused-company. In the light of the above admitted position of the accused-petitioners, they have no option other than to accept and concede that there were legal basis to have primary satisfaction of the learned Magistrate as to commission of an offence as well as to taking cognizance of the offence. The protest/objection/grievance of these three accused-petitioners is, thus, apparently not with regard to constitution or commission of offence: but with regard to indentifying the proper offenders. While these three accused-petitioners admit that the company and its Managing Director are the offenders and, accordingly, the cognizance-taking Magistrate ought to have taken cognizance against only those two accused, it is the case of the complainants that these three accused, being the directors of the accused-company, are also liable for commission of the aforesaid offence. With this scenario of these cases, we now need to adjudicate upon this contentious issue, namely, whether impleadment of these three accused merely on the basis of being the directors of the accused-company is legal.

23.          For a comprehensive examination of the issue, we should look at the provisions of Section 140 of the NI Act in tandem with the ratio laid down by the Apex Court of our country and that of the foreign jurisdiction. Section 140 of the NI Act makes the following provisions:

140. Offences of companies-(1) If the person committing an offence under Section 138 is a company, every person who, at the time 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:

Provided that nothing contained in this sub-Section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.

(2)   Notwithstanding anything contained in sub-Section (1), where any offence under this Act has been committed by a company and it is 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, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

(underlined by us)

24.          While Sub-Section (1) of Section 140 of the NI Act makes provisions for proceeding against the person (the words employed in the statute are - “shall be liable to be proceeded against”) who are in charge of, and was responsible to, the company at the time of committing the offence in addition to the company herself, its Proviso makes defensive provisions; by dint of which a category of the accused, who have been named in sub-Section (1) of Section 140 of the NI Act, may not be liable to the punishment. Thus, from a minute reading of the Proviso to Section 140 of the NI Act, it appears to us that defence may be taken by the accused-directors to escape from the punishment; but not to get released from the accusation of commission of offence. On the other hand, the category of persons stated in sub-Section (2) of Section 140 of the NI Act may be proceeded against only after obtaining any proof as to their consent/ connivance/ negligence. It follows that although Section 140 of the NI Act, as a whole, speaks about three categories of accused persons, namely, (1) the company, (ii) every person who was in charge of, and responsible to, the accused-company at the time of commission of offence and (iii) any director, manager, secretary or other officer of the accused-company who has consented to, or connived with, commission of any offence under the NI Act, including the offence under Section 138 of the Act, however, only the first two categories of the persons namely, (i) the company and (ii) every persons who are in charge of, and responsible to, the company, may be proceeded against on the basis of their ‘deemed guilt’; and in order to proceed against the third category of person/s, a ‘proved guilt’ is required.   

25.          Here in the cases at hand, these three persons have been arraigned as accused without disclosing specific allegation against them, but merely on the basis of ‘deemed guilt’. Now, let us see what are the legal requirements for impleading any person on the basis of the ‘deemed guilt’. From a minute perusal of the provisions of Section 140 (1) of NI Act, all that we understand is that firstly the company, being a juristic person, herself and, secondly, every persons who are conducting the business of the company, being in charge of the company and responsible to the company, would be deemed guilty of commission of any offence under Section 138 of the NI Act. Admittedly, these three accused-petitioners are the directors of the accused-company with the identities of the Chairman, Deputy Managing Director and Director (operation) and, undeniably, they all are the members of the Board of Directors (BoD) of the accused company and, accordingly, they are supposed to be in charge of, and responsible to, the company for the conduct of the business of the company.

26.          At this juncture, as a pertinent point, we may briefly acquaint with the role of BoD within the purview of the Company Act, 1994 (Company Act). Company is a juristic person and its Board of Directors acts as its body and mind. All the powers of management of the affairs of the company are vested in the BoD and, thus, the Board becomes the working organ of the company. The BoD is, therefore, considered to be the company’s supreme authority which consists of the directors of the company. That is how, the directors remain responsible for the company’s management, which includes taking/making loan and repayment thereof. For this reason, it is fairly reasonable for a person, who is having a transaction with a company, to presume that the directors of the company are in charge of the affairs of the company. If any restrictions of their powers are placed by the Memorandum or Articles of the company, it is for the directors to establish it at the trial. It is in that context that Section 140 of the NI Act provides that when the offender is a company, every person, who at the time when the offence was committed was in charge of and was responsible to the company for the conduct of the business of the company, shall also be deemed to be guilty of the offence along with the company. Therefore, when simply an allegation in the complaint would be made stating that the named accuseds are directors of the company, it would usher in the element of their acting for and on behalf of the company and of their being in charge of the company. In other words, the requirement of disclosing an offence against an accused-director of a company, in the cheque-dishonouring criminal cases, is to be taken to have been fulfilled by the complainant if the names of the directors are mentioned in the column of the accused and the supporting documents as to holding the post of director, such as the Articles & Memorandum of Association and Form XII of the accused-company, are annexed to the complaint-petition. It leads us to hold that since a company, being a juristic person, operates through the BoD consisting of the Chairman, Managing Director, Joint/Deputy Managing Director and other Directors, the members of the BoD normally be impleaded as accused for their ‘deemed guilt’ along with the company when there arises an occasion by anybody to file a criminal case against the company.

27.          In summing up our above examination all that we wish to say that when the offence is committed by a company, the ‘deemed guilt’ is primarily attached to the members of the BoD in addition to the signatory of the cheque and the company inasmuch as after dishonoring of a cheque issued by a company, when the said company decides not to pay off the cheque-amount despite receiving demand/ legal notice, the said decision is to be seen and taken as a serious business of the company and for the said type of conduct of business of the company, it is quite commonsensical to deem that all the members of the BOD jointly and individually were aware of the said decision having foreseen its legal consequence and, thereby, they are to be deemed to be guilty for non-payment of the cheque amount.

28.          However, without facing rigour of trial of such an accusation, there is a way-out for a director of a company to obliterate her/his name from the list of the accused-person if s/he had specifically denied the liability of dishonouring the cheque by replying to the demand/legal notice upon enclosing the corroborating-papers/documents therewith in substantiating her aforesaid denial. Usually, upon receipt of the petition of complaint under Section 138 of the NI Act, the Magistrate would decide to take cognizance on the basis of averments made in the petition of complaint, statements recorded under Section 200 of the CrPC and the annexed papers, which include the dishonoured-cheque, bank-slip containing information as to dishonouring the cheque, the demand/legal notice with hand-acknowledgment/ registered receipt or notification in the daily national newspaper and the reply to the demand/legal notice. When a Magistrate would have the opportunity to peruse the reply to the demand/legal notice containing specific denial by a director as to absence of her/his knowledge about issuance/dishonouring of the cheque or her/his resignation from the company before issuance of the cheque, the Magistrate is duty bound to consider the same and, thereby, decide as to whether cognizance should be taken against the said accused-director, for, issuance of a demand/legal notice and a reply thereto are the essential components of constituting an offence under Section 138 of the NI Act. If the complainant claims before the Magistrate that no reply to the demand notice was made by the accused and, later on, at the stage of framing charge the accused can satisfy the trial Court that in spite of her/his reply detailing her/his non-involvement in the conduct of the business of the company upon appending document in its support, the complainant had not produced it before the Magistrate or despite of its production before the Court, the cognizance-taking Magistrate failed to consider it, in that scenario, the trial Court would be in a position to discharge her/him from the charge or, if s/he approaches this Court directly, this Court may quash the proceedings so for as it relates to the aforesaid accused who had clarified her/his position by replying to the demand/legal notice by denying any involvement in the conduct of the business of the company upon enclosing the authentic document/papers in substantiating the aforesaid claim. It is important to bear in mind that in the cases under Sections 138 and 140 of NI Act, the accused is entitled to seek discharge relying upon the contents of a reply to the demand/legal notice, for, the same is a prosecution material and, accordingly, the accused is also competent to approach this Court on the basis of the said material in addition to any other prosecution material, subject to the condition that the contents of the reply together with its annexed document are either conceded by the complainant or, if disputed by the complainant, it appears to the trial Court/this Court that the same does not require any formal proof through producing evidence before the trial Court.

29.          Given the fact that in all these cases, despite receiving legal notice by all the accused, none of them did make any reply claiming that they were not in charge of the company and not responsible to the company for issuance of cheques in question, nor is it their claim that despite making reply to the legal notice detailing their non-involvement in the transaction the cognizance-taking Magistrate failed to consider it, now, taking a stance by the accused-directors that they were unaware of issuance of the cheques or they have resigned from the accused-company shall amount to adopting defence requiring them to prove the same by adducing evidence before the trial Court. Moreover, all the accused-petitioners have made an admission in their applications under Section 265C of the CrPC as to having their personal knowledge in issuance of the cheques as well as reason for dishonouring the cheque. Hence, there is no scope for these accused-petitioners to escape the liability of commission of offence under Sections 138 & 140 of the NI Act and, therefore, they are bound to face the trial.

30.          So, from the scrutiny of the facts of these cases and side by side examining the provisions of Section 200 CrPC concurrently the provisions of Sections 138 & 140 of the NI Act, the irresistible conclusion to which we are to be arrived at is that there was no illegality in taking cognizance by the Magistrate against these three accused-directors under Sections 138 & 140 of the NI Act and, accordingly, the cases filed against them shall be proceeded with and these Rules are liable to be discharged.

31.          Despite the above resolution, this Court is yet required to deal with the cited case-laws of our jurisdiction and of the Indian jurisdiction, relying on which the learned Advocate for the petitioners has tried to make out a favourable case for the accused. The cases from the Indian jurisdiction are (i) Standard Chartered Bank Vs State of Maharashtra (2016) 6 SCC 62, (ii) Gunmala Sales (P) Ltd (2015) 1 SCC 103 (iii) AK Singhania Vs Gujrat State Fertilizer Co. Ltd (2013) 16 SCC 630 (iv) Aneeta Hada Vs Godfather Travels and Tours Pvt Ltd (2012) 5 SCC 661, (v) National Small Industries Vs Harmeet Singh Paintal 2010 (3) SCC 330, (vi) KK Ahuja Vs KK Vora (2009) 10 SCC 48, (vii) Everest Advertising Pvt Ltd Vs State (Govt. of Net of Delhi) (2007) 5 SCC 54, (viii) SMS Pharmaceuticals Ltd. Vs Neeta Bhalla (2005) 8 SCC 89 and (ix) Monaben Ketanbhai Shah Vs State of Gujrat (2004) 7 SCC 15 and the cases from our jurisdiction are (i) Securities and Exchange Commission, Vs. Runa N Alam, 57 DLR(AD) 161 (ii) Nizam Uddin Mahmood Vs Abdul Hamid Bhuiyan 1 ADC 274 and (iii) Eusof Babu Vs State 68 DLR(AD) 298.

32.          From a plain reading of all the cases referred to from the Indian jurisdiction, it is our understanding that in the cited cases there was no dispute about commission of an offence under Section 138 of the NI Act by the company and its director/s. So, in the cited cases, offence was there, the offenders were there and the offenders were named as the company and its BoD. But the Indian Supreme Court took the view that unless the complainant makes any averment about the responsibility of the director in the transaction in question, no cognizance is to be taken and no summon/warrant to be issued against the said director. In other words, the Indian Supreme Court laid down a principle that for taking cognizance of an offence under Sections 138 & 140 of the NI Act against a director of a company, there must be a specific allegation in the complaint-petition against a director specifying the accused-director’s nature of responsibility and duties in the said company.

33.          In our way of examination of the issue, however, we failed to pursue ourselves with the Indian Supreme Court’s ratio, for, in our view though there may be absence of clearer description about the responsibility of the accused-director in the petition of complaint due to poor drafting of the learned Advocate, however, since the Magistrate is empowered to obtain clearer version form the complainant in recording statements under Section 200 CrPC in addition to the contents of the complaint-petition, the requirement of making specific averments is met up when the Magistrate gains her/his primary satisfaction as to commission of offence, not only from the complaint-petition but also from the statements made under Section 200 CrPC, in conjunction with the papers annexed to the petition of complaint.

34.          Secondly, if the Magistrate takes cognizance and issues summons against the accused-director despite non-making clearer description about the responsibility of the said accused-director, then, as per the Indian Supreme Court’s view, the order of issuance of summons is liable to be quashed. But nothing has been said by the Indian Supreme Court about the next step available for the complainant, given that the offence under Section 138 of the NI Act having been duly constituted remains intact following quashing the Magistrate’s Order of issuance of summon/warrant. When an accused is discharged from or acquitted of the accusation of a criminal charge by a trial Court, the status of a criminal offence becomes non-est. Also, when a criminal case is quashed by this Court on the ground of non-disclosure of any offence, irrespective of the said case’s stage - be it at the investigation stage or trial or post-trial stage, the offence is wiped out. But, if a criminal case is quashed merely on the ground of procedural illegality, be it happens after completion of its trial or during trial or at the investigation stage, the High Court Division’s duty is to express its view as to what would be the next step for the informant/complainant following quashment of the impugned order/proceedings. Latterly, this Court in the case of Md. Kamar Uddin Vs The State 12 ALR 2018(1) 171 quashed the proceedings of the criminal case under Section 500 of the Penal Code on the ground of procedural illegality, as the mandatory requirement of Section 198 of the CrPC that the case must be filed by the aggrieved person/power of attorney holder, was not observed. Thereafter, this Court in its concluding Paragraph made a statement to the effect that the aggrieved person, or a person in favour of whom a power of attorney is executed by the aggrieved person, shall be at liberty to file a fresh complaint before the Magistrate. The reason behind is that when this Court quashes a criminal case on the ground of procedural illegality, the offence does not get destroyed.

35.          Although there is no time limitation for filing most of the criminal cases, there is a requirement under Section 141(b) of the NI Act that the complaint must be made within one month of the date on which the cause of action arises under clause (c) of the Proviso to Section 138 of the NI Act. Given the fact that in all the cited-cases from Indian Jurisdiction the offence under Section 138 of the NI Act having been duly constituted, the complaint was lodged within the prescribed time of one month and, furthermore, from the nature of the quashment order passed by the Indian Supreme Court, it appears to us that it, in effect, has quashed the Order of issuance of summon against the accused-director by simply using the wordings “the proceedings are quashed”. With the above conclusion, the Indian Supreme Court did not bar the complainant to go back to the Magistrate concerned with a prayer for reexamining the complainant on oath, so that the complainant may make clearer statements under Section 200 CrPC about the responsibility of the accused-director in the company in addition to the contents of the complaint-petition, nor did the Indian Supreme Court impose any restriction/ prohibition upon the concerned Magistrate to go for Judicial Inquiry towards obtaining clearer picture about the responsibility of the accused-director from the JWs and, thereby, decide to take or not to take cognizance of the offence against the accused-director.

36.          Let us now look at the cases of our Appellate Division referred to by the learned Advocate for the petitioner. In the cases of Securities and Exchange Commission Vs Runa N Alam 57 DLR(AD) 161, when the High Court Division quashed the proceedings against the Chairman of the company on the ground that since the Enquiry Committee formed by the Security and Exchange Commission (SEC) did not find any involvement of the Chairman of the company in alleged commission of offence under Section 17 of the Securities and Exchange Ordinance, 1969, the Chairman of the company ought not to have been proceeded against under Section 27 of the said Ordinance (which is a verbatim provision to Section 140 of the NI Act), the Appellate Division upon setting aside the Order of the High Court Division held that the Chairman of the company requires to prove before the trial Court as to whether she was responsible to/in charge of the company or not. In the case of Nizamuddin Mahmud Vs Abdul Hamid Bhuiyan 1 ADC 274, there was no issue regarding impleadment of any director of the company as the accused of the said case, as the case was between two private individuals. However, from Paragraph 20 of the case, the following concluding portion of the Judgments “in view of the non-disclosure of the date as to receipt of notice by the accused and failure to mention any legal cause of action in the petition of complaint, we are of the view the proceeding can not be allowed to continue”, was cited by the learned Advocate in an endeavour to make out a case that since no allegation has been disclosed against these accused-directors, these cases also cannot be continued. The facts and legal issues of the afore-cited case being completely dissimilar to that of these cases, there is no scope to apply the dictum of the said case. Moreover, the aforesaid dictum has subsequently been overruled by the Appellate Division in course of reviewing the said Judgment, which has been reported as Nizamuddin Mahmood Vs Abdul Hamid Bhuiyan 60 DLR(AD) 195.

37.          Thus, the Indian supreme Court’s cases and also our Appellate Division’s case do not help these accused-directors in getting quashed these criminal cases filed against them under Sections 138 and 140 of the NI Act and, therefore, they are required to face the trial of the charges framed against them by the trial Court.

38.          Now, the last issue, namely, whether a criminal case under Sections 138 & 140 can be filed without impleading the company as the principal accused, may be taken up for its adjudication. The answer has already been given by the Appellate Division in the case of Eusuf Babu Vs State 68 DLR (AD) 298 in greater details. Nonetheless, in briefly answering the above issue, it may be jotted down here that when an offence under Section 138 of the NI Act is committed by the company, the complainant is required to implead the company as accused no. 1, then the signatory of the cheque should be made accused no. 2, then the directors of the company and, thereafter, if there is any officer of the company, against whom it is proved through a Judicial Enquiry or other form of enquiry that s/he has consented to/connived with in commission of the offence. However, if the company is not impleaded as accused in the petition of complaint, but other class or classes accused were made accused following serving the demand notice upon them within time for payment of the cheque-amount, then, certainly legal cause of action to file a case under Sections 138 & 140 of the NI Act against the other person/s arose. In other words, if the offence under Section 138 of the NI Act have been duly constituted and the case was filed within time against the signatory of the cheque and/or the directors and/or the officers of the company, in that scenario, the case shall not fail for non-mentioning of the name of the company in the petition of complaint, subject to the condition that the charge must be framed against the company and, on behalf of the company, the members of the BoD shall answer the charge. The rationale behind is that had the company been arrayed as the accused, it was the director/s of the company who had to face the trial by answering the charge/s framed against the company.

39.          Before parting with the Judgment, we find it pertinent to observe here that the dishonor of cheque is a regulatory offence and the same has been created to serve the public interest in ensuring the reliability of the cheques. The intent of legislature was to provide a strong criminal remedy in order to deter the worryingly high incidence of dishonour of cheques but the incidence of dishonour of cheques had not reduced because the law has not been implemented with same seriousness with which it was enacted, nor the courts are ensuring that the trial of these cases take place in a summary manner as desired by the Legislature without putting complainant and accused on equal footing. Today, complainant gets more harassed than the accused in pursuing a complaint under Section 138 NI Act, because of the fact that every summoning order is assailed on one or the other ground and the complainant is forced to contest the legality of orders of the Magistrates in cases under Section 138 at the very initial stage putting complainant to a greater disadvantage. In all cases, complainants are not the companies rather in most of the cases complainants are individuals and they have to fight an unequal legal battle against companies, who have enough funds to spend on litigation and charge it to the company account.

40.          Given the propensity of the accused-directors of the companies to invoke inherent power of this Court on this or that ground, mostly, in an attempt to frustrate the trial of the cases under Section 138 read with 140 of the NI Act, this Court, as a part of its Constitutional obligation under Article 109 of the Constitution, finds it to be a demand of this time to formulate some guidelines for the learned Judicial Magistrates who are assigned to take cognizance of the offence under Section 138 read with Section 140 of the NI Act, in an expectation that the accused-directors would not seek to find any fault in the performance of the Magistrates on the basis of which they usually approach this Court.

(1)    No complaint-petition under Section 138 read with Section 140 of the NI Act shall be entertained by a Magistrate unless the following conditions are fulfilled:

(i)                 The company must be named in the petition of complaint as the No. 1 accused.

(ii)               The signatory of the cheque shall be made accused No. 2 in the petition of complaint.

(iii)             If any director is arraigned as accused, the nature of responsibility of the said director with her/his designation/portfolio in the company must be made clearly.

(iv)              The petition of complaint must contain a statement to the effect that the accused-director/s are in charge of, and responsible to, the company for the conduct of the business of the company.

(v)                A copy of the Articles & Memorandum of Association and a copy of the Form XII of the accused-company must be annexed to the petition of complaint so as to satisfy the Magistrate that the   accused-director/s are in charge of the company at the material time of issuance/dishonoring of the cheque.

(vi)              Evidence must be enclosed to the complaint-petition to substantiate the fact that notice under clause (b) to Section 138(1) of the NI Act has been served in any of the three manners enshrined in Section 138 (IA) of the NI Act.

(vii)            A copy of the reply, if any, to the demand/legal notice for payment of the cheque-amount must be produced before the Magistrate.

(viii)          If the complainant claims that s/he has not received any reply to the demand/ legal notice, in that scenario, there must be a clearer statement in the complaint-petition about its non-receipt.

(2)    The Magistrate must not hesitate to ask the complainant to come back with fresh application containing the above-noted statements together with the aforesaid annexures/ documents.

(3)    If the Magistrate finds it to be an appropriate case to carry out a judicial enquiry about the nature of responsibility of the accused-director before taking cognizance, the Magistrate should take necessary step/s for heading towards judicial enquiry.

(4)    The Magistrate should follow the above directives in addition to the guidelines laid down in the case of Aleya Vs State 70 DLR 303 (Para-26).

41.          In the result, all the Rules are discharged without any order as to costs. The order of stay granted at the time of issuance of these Rules is recalled and, thereby, it stands vacated.

42.          The trial Court is directed to complete the trial within the shortest possible time, preferably within 6(Six) months. Meanwhile However, if any application under Section 540A CrPC for dispensing with personal attendance is made by the accused-directors the trial Court should consider the said application in a positive manner, so that if the accused succeed in proving at the trial that they were not in charge of the company, nor was responsible to the company for the conduct of the business of the company and resultantly, get acquitted of the charge, in that event, they  do not feel that they were put to harassment by compelling them to face the trial. However, in allowing the said application, the trial Court shall attach the conditions that their concerned lawyers shall remain present at the trial on their behalf and they shall appear before the trial Court as and when the trial Court orders, in particular at the stage of their examination under Section 342 CrPC.

43.          The Registrar of the High Court Division is directed to disseminate a copy of this Judgment to all the CMMs & CJMs who shall, thereafter, would distribute a Xerox copy to each of their Metropolitan Judicial Magistrates so that after being acquainted with the directives set out in this Judgment, they can apply the same during performance of their duty as cognizance-taking Magistrates.

44.          Office is directed to communicate a copy of this Judgment to the learned Additional Metropolitan Sessions Judge, 1st Court, Dhaka at once.

Ed.



Criminal Miscellaneous Case No. 48507 of 2017 With Criminal Miscellaneous Case No. 48508 of 2017 with Criminal Miscellaneous Case No. 49931 of 2017 with Criminal Miscellaneous Case No. 49932 of 2017 with Criminal Miscellaneous Case No. 54700 of 2017 with Criminal Miscellaneous Case No. 27457 of 2017 with Criminal Miscellaneous Case No. 28148 of 2017 with Criminal Miscellaneous Case No. 36067 of 2017.