Paragraph numbers below are the court’s original numbering, recovered from the source text.
18. Referring to this Court's earlier decisions in K.P. G. Nair v. Jindal ··r Menthol India Ltd., [2001] 10 SCC 218 and Monaben Ketanbhai Shah and c Anr. V. Stqte of Gujarat and Ors., [2004] 7 sec 15, it was stated: "18. To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person 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 the respondent falls within the 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."
19. In terms of Section 138 of the Act, a complaint petition alleging an offence thereto must demonstrate that the following ingredients exist that: ,-.,_.. (i) a cheque was issued; (ii) the same was presented; S.M.S. PHARMACEUTICALS LTD. v. NEETA BHALLA [S.B. SINHA, J.] 871 ….. ·-r (iii) but, it was dishonoured; (iv) a notice in tenns of the said provision was served on the person sought to be made liable; and (v) despite service of notice, neither any payment was made nor other obligations, if any, were complied with within fifteen days B from the date of receipt of the notice.
20. The liability of a Director must be determined on the date on which – -.{ the offence is committed. Only because Respondent No. 1 herein was a party to a purported resolution dated 15.02.1995 by itself does not lead to an inference that she was actively associated with the management of the affairs c of the Company. This Court in this case has categorically held that there may be a large number of Directors but some of them may not associate themselves in the management of the day to day affairs of the Company and, thus, are not responsible for conduct of the business of the Company. The avennents must state that the person who is vicariously liable for commission of the offence of the Company both was incharge of and was responsible for the D r conduct of the business of the Company. Requirements laid down therein must be read conjointly and not disjunctively. When a legal fiction is raised, the ingredients therefor must be satisfied.
21. If the complaint petition is read in its entirety, the same would show that the only person who was actively associated in the matter of obtaining E loan, signing cheques and other affairs of the company which would lead to commission of the alleged offence was the accused No. 2. By reason of the purported resolution dated 15.02.1995, whereupon strong reliance has been placed by Mr. Mishra, only the accused No. 2 was authorized to do certain acts on behalf of the Company. The cheques were issued on 15.08.1996, i.e., F after a period of 17 months from the date of the said resolution. As is evident from the averments made in the complaint petition, the cheques represented the amount of interest payable for a total period of 15 days only calculated at the rate of 25% per annum on the amount of deposit, viz., rupees two crores.
22. The High Court has gone into the matter at some length. The High _,,.. Court found that the resolution by itself did not constitute an offence even assuming that the same bore the signature of Respondent No. 1 (although the genuineness thereof was disputed). x_,, [2007) 2 S.C.R.
23. On a plain reading of the averments made in the complaint petition, –t- we are satisfied that the statutory requirements as contemplated under Section 141 of the Act were not satisfied.
24. This aspect of the matter has recently been considered by this Court in Sabitha Ramamurthy & Anr. v. R.B.S. Channabasavaradhya, (2006) 9 B SCALE 212, wherein it was held: "A bare perusal of the complaint petitions demonstrates that the statutory requirements contained in Section 141 of the Negotiable r Instruments Act had not been complied with. It may be true that it is c not necessary for the complainant to specifically reproduce the wordings of the section but what is required is a clear statement of fact so as to enable the court to arrive at a prima facie opinion that the accused are vicariously liable. Section I 4 I raises a legal fiction. By reason of the said provision, a person although is not personally liable for commission of such an offence would be vicariously liable therefor. Such vicarious liability can be inferred so far as a company registered or incorporated under the Companies Act, 1956 is concerned only if the requisite statements, which are required to be averred in the complaint petition, are made so as to make the accused therein vicariously liable for the offence committed by the company. Before a person can be made vicariously liable, strict compliance of the statutory requirements would be insisted … "
25. Yet again in Saro) Kumar Poddar v. State (NCT of Delhi) and Anr., (2007) 2 SCALE 36, the said legal principle was reiterated stating: "Apart from the Company and the appellant, as noticed hereinbefore, the Managing Director and all other Directors were also made accused. The appellant did not issue any cheque. He, as noticed hereinbefore, had resigned from the Directorship of the Company. It may be true that as to exactly on what date the said resignation was accepted by the Company is not known, but, even otherwise, there is no averment in the complaint petitions as to how and in what manner the appellant was responsible for the conduct of the business of the Company or otherwise responsible to it in regard to its …__ functioning. He had not issued any cheque. How he is responsible for dishonour of the cheque has not been stated. The allegations made in paragraph 3, thus, in our opinion do not satisfy the requirements ·y S.M.S. PHARMACEUTICALS LTD. v. NEETA BHALLA (S.B. SINHA, J.] 873 ….. -r of Section 141 of the Act."
26. A faint suggestion was made that this Court in Saroj Kumar Poddar (supra) has laid down the law that the complaint petition not only must contain averments satisfying the requirements of Section 141 of the Act but must also show as to how and in what manner the appellant was responsible for the conduct of the business of the company or otherwise responsible to B it in regard to its functioning. A plain reading of the said judgment would show that no such general law was laid down therein. The observations were made in the context of the said case as it was dealing with a contention that although no direct averment was made as against the appellant of the said case fulfilling the requirements of Section 141 of the Act but there were other c averments which would show that the appellant therein was liable therefor.
27. We, therefore, are of the opinion that the judgment of the High Court cannot be faulted.
28. Another submission of Mr. Mishra was that the second application D was not maintainable. Such a question had not been raised before the High Court. Even otherwise, the High Court was not denuded from exercising its j inherent jurisdiction in a matter of this nature. The principles of res judicata are not attracted. Reliance placed by Mr. Mishra on Simrikhia v. Dolley Mukherjee and Chhabi Mukherjee and Anr., [1990] 2 SCC 437 is misplaced. The question which arose for consideration therein was as to whether despite E dismissal of an earlier application a second application would be maintainable which would virtually amount to review of the earlier order which would be contrary to the spirit of Section 362 of the Code of Criminal Procedure. It was held: —… "7. The inherent jurisdiction of the High Court cannot be invoked to F override bar of review under Section 362. It is clearly stated in Sooraj Devi v. Pyare Lal, that the inherent power of the court cannot be exercised for doing that which is specifically prohibited by the Code. The law is therefore clear that the inherent power cannot be exercised for doing that which cannot be done on account of the bar under G other provisions of the Code. The court is not empowered to review __,,. its own decision under the purported exercise of inherent power. We find that the impugned order in this case is in effect one reviewing the earlier order on a reconsideration of the same materials. The High Court has grievously erred in doing so. Even on merits, we do not find any compelling reasons to quash the proceedings at that stage." c
29. We have noticed the previous order passed by the High Court. The High Court gave liberty to Respondent No. I to agitate the matter once again. Respondent No. 1 merely took recourse thereto. Equally misplaced is the judgment of this Court in Rajinder Prasad v. Bashir and Ors., [2001] 8 SCC 522. Although therein it was held that when an earlier revision application under Section 397 of the Code of Criminal Procedure bas been dismissed, as not pressed, a second application under Section 482 thereof for grant of same relief should not have been entertained, this Court opined: "8. We are of the opinion that no special circumstances were spelt out in the subsequent application for invoking the jurisdiction of the High Court under Section 482 of the Code and the impugned order is liable to be set aside on this ground alone." 30. It is, therefore, r'l authority for the proposition that the High Court is not completely denuded of its power to exercise inherent jurisdiction for the second time. 31. Furthennore. this court therein also went into the merit of the matter. In this case, not only the merit of the matter had been gone into by the High Court as also by this Court, the questions raised in the petition had been referred to a larger Bench for obtaining an authoritative pronouncement. It is, therefore, too late in the day for the appellant to contend that the application under Section 482 of the Code of Criminal Procedure was not maintainable. 32. We may, however, notice that this Court in Superintendent and Remembrancer of Legal Affairs, West Bengal v. Mohan Singh and Ors., [1975] 3 sec 706 held that when there is a changed set of circumstances, a second application under Section 56 IA of the Code of Criminal Procedure would be maintainable stating: "2. The main question debated before us was whether the High Court had jurisdiction to make the order dated April 7, 1970 quashing the proceeding against Respondents I, 2 and 3 when on an earlier application made by the first respondent, the High Court had by its order dated December 12, 1968 refused to quash the proceeding. Mr Chatterjee on behalf of the State strenuously contended that the High Court was not competent to entertain the subsequent application of Respondents 1 and 2 and make the order dated April 7, 1970 quashing the proceeding, because that was tantamount to a review of its earlier order by the High Court, which was outside the jurisdiction of the x: —r 'y -.,, S.M.S. PHARMACEUTICALS LTD. v. NEETA BHALLA [S.B. SINHA, J.) 875 High Court to do. He relied on two decisions of the Punjab and Orissa A High Courts in support of his contention, namely, Hoshiar Singh v. State and Namdeo Sindhi v. Stale. But we fail to see how these decisions can be of any help to him in his contention. They deal with a situation where an attempt was made to persuade the High Court in exercise of its revisional jurisdiction to reopen an earlier order B passed by it in appeal or in revision finally disposing of a criminal proceeding and it was held that the High Court had no jurisdiction to revise its earlier order, because the power of revision could be exercised only against an order of a subordinate court. Mr Chatterjee also relied —.( on a decisiol). of this Court in U.J.S. Chopra v. State of Bombay where N.H. Bhagwati, J., speaking on behalf of himself and Imam, J., observed c that once a judgment has been pronounced by the High Court either in exercise of its appellate or its revisional jurisdiction, no review or revision can be entertained against that judgment and there is no provision in the Criminal Procedure Code which would enable the High Court to review the same or to exercise revisional jurisdiction D over the same. These observations were sought to be explained by Mr Mukherjee on behalf of the first respondent by saying that they ·r- should not be read as laying down any general proposition excluding the applicability of Section 561-A in respect of an order made by the j High Court in exercise of its appellate or revisional jurisdiction even if the conditions attracting the applicability of that section were satisfied E in respect of such order, because that was not the question before the Court in that case and the Court was not concerned to inquire whether the High Court can in exercise of its inherent power under Section 5 61 A review an earlier order made by it in exercise of its appellate or revisional jurisdiction … " 33. For the reasons aforementioned, we do not find any error whatsoever in the impugned judgment. The appeal is dismissed with costs. Counsel's fee assessed at Rs. I 0,000/-. N.J. Appeal dismissed.