19. Second Appeal - Law prevails over Truth

In a decision[1] over s.100 of CPC, his lordship Hon. Dalveer Bhandari, J has referred 54^th report of the Law Commission of India, submitted in 1973, wherein the Law Commission has said that it may be permissible to point out that a search for absolute truth in the administration of justice, however, laudable, must in the very nature of things be put under some reasonable restraint. In other words, a search for truth has to be reconciled with the doctrine of finality. In judicial hierarchy finality is absolutely important because that gives certainty to the law. Even in the interest of litigants themselves it may not be unreasonable to draw a line in respect of the two different categories of litigation where procedure will say at a certain stage that questions of fact have been decided by the lower courts and the matter should be allowed to rest where it lies without any further appeal. This may be somewhat harsh to an individual litigant; but, in the larger interest of the administration of justice, this view seems to us to be juristically sound and pragmatically wise. According to the said report, any rational system of administration of civil law should recognize that litigation in civil cases should have two hearings on facts - one by the trial court and one by the court of appeal.

The question could perhaps be asked, why the litigant who wishes to have justice from the highest Court of the State should be denied the opportunity to do so, at least where there is a flaw in the conclusion on facts reached by the trial court or by the court of first appeal. The answer is obvious that even litigants have to be protected against too persistent a pursuit of their goal of perfectly satisfactory justice. An unqualified right of first appeal may be necessary for the satisfaction of the defeated litigant; but a wide right of second appeal is more in the nature of a luxury.[2]

“It may be relevant to recall the statement of Douglas Payne on "Appeals on Questions of Fact" reported in (1958) Current Legal Problem 181.He observed that the real justification for appeals on questions of this sort is not so much that the law laid down by the appeal court is likely to be superior to that laid down by a lower court as that there should be a final rule laid down which binds all future courts and so facilitates the prediction of the law. In such a case the individual litigants are sacrificed, with some justification, on the altar of law-making and must find such consolation as they can in the monument of a leading case.”[3]

The predecessors of the High Courts in their civil appellate jurisdiction were the Sadar Divani Adalats. The right of appeal to the Sadar Divani Adalat was very wide initially, but came to be severely curtailed in the course of time. The "Cornwallis Scheme", for example, made provision for two appeals in every category of cases, irrespective of its value. By 1814, this was reduced to one appeal only. Only in cases of Rs.5,000 or over, there could be two appeals; one to the Provincial Court of Appeal and second to the Sadar Divani Adalat. As Lord Hastings observed, - "The facility of appeal is founded on a most laudable principle of securing, by double and treble checks, the proper decision of all suits, but the utopian idea, in its attempt to prevent individual injury from a wrong decision, has been productive of general injustice by withholding redress, and general inconvenience, by perpetuating litigation.”[4]

Even prior to amendment, the consistent position has been that the courts should not interfere with the concurrent findings of facts. The Judicial Committee of the Privy Council as early as in 1890 stated that there is no jurisdiction to entertain a second appeal on the ground of an erroneous finding of fact, however, gross or inexcusable the error may seem to be and they added a note of warning that no Court in India has power to add to, or enlarge, the grounds specified in Section 100. Now, after 1976 Amendment, the scope of Section 100 has been drastically curtailed and narrowed down. The High Courts would have jurisdiction of interfering under Section 100 C.P.C. only in a case where substantial questions of law are involved and those questions have been clearly formulated in the memorandum of appeal. At the time of admission of the second appeal, it is the bounden duty and obligation of the High Court to formulate substantial questions of law and then only the High Court is permitted to proceed with the case to decide those questions of law. The language used in the amended section specifically incorporates the words as "substantial question of law" which is indicative of the legislative intention. It must be clearly understood that the legislative intention was very clear that legislature never wanted second appeal to become "third trial on facts" or "one more dice in the gamble". The effect of the amendment mainly, according to the amended section, was:

(i) The High Court would be justified in admitting the second appeal only when a substantial question of law is involved; (ii) The substantial question of law to precisely state such question; (iii) A duty has been cast on the High Court to formulate substantial question of law before hearing the appeal; (iv) Another part of the Section is that the appeal shall be heard only on that question.

His lordship Bhandari, J. observed that the fact that, in a series of cases, the Supreme Court was compelled to interfere was because the true legislative intendment and scope of Section 100 C.P.C. have neither been appreciated nor applied. In this case the supreme Court (through Hon. Bhandari,J.), adopting rather a legalistic approach made a self critics by observing that “A class of judges while administering law honestly believe that, if they are satisfied that, in any second appeal brought before them evidence has been grossly misappreciated either by the lower appellate court or by both the courts below, it is their duty to interfere, because they seem to feel that a decree following upon a gross misappreciation of evidence involves injustice and it is the duty of the High Court to redress such injustice. We would like to reiterate that the justice has to be administered in accordance with law.”[5]

Now, is it wrong to say that, the Truth has to give way to the Law ?

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[1] CIVIL APPEAL NO.742 OF 2001, Narayanan Rajendran and another v. Lekshmy Sarojini & Others, decided on 12/02/2009.

[2] Ibid, Para 56 .

[3] Ibid, Para 58.

[4] Ibid, Para 59.

[5] Ibid, Para 65.

18. Non supply of documents - prejudice theory

In many cases on behalf of employee a ground is taken that during inquiry proceedings, certain documents were not supplied to him and thus the inquiry proceedings are bad in Law as there is non compliance of principles of natural justice. In this regard our judiciary is of view that the delinquent employee has to show as to what prejudice has been caused to him in absence of those documents.

In State of U.P. Vs. Ramesh Chandra Mangalik[1] the supreme court observed:-
" Learned counsel for the appellant has further submitted that particular documents copies of which are said to have not been supplied are not indicated by the respondent much less in the order of the High Court nor their relevance has been pointed out. The submission is that the delinquent will also have to show as to in what manner any particular document was relevant in connection with the inquiry and what prejudice was caused to him by non-furnishing of a copy of the document. In support of this contention, reliance has been placed upon a case reported in Chandrama Tewari v. Union of India.[2] It has been observed in this case that the obligation to supply copies of documents is confined only to material and relevant documents which may have been relied upon in support of the charges. It is further observed that if a document even though mentioned in the memo of charges, has no bearing on the charges or if it is not relied upon or it may not be necessary for cross-examination of any witness, non-supply of such a document will not cause any prejudice to the delinquent. The inquiry would not be vitiated in such circumstances. In State of Tamil Nadu v. Thiru K.V. Perumal and others[3] relied upon by the appellant, it is held that it is for the delinquent to show the relevance of a document a copy of which he insists to be supplied to him. Prejudice caused by non-supply of document has also to be seen. In yet another case relied upon by the learned counsel for the appellant State of U.P. v. Harendra Arora and another[4], it has been held that a delinquent must show the prejudice caused to him by non-supply of copy of document where order of punishment is challenged on that ground.”

Similarly, in Syndicate Bank & Ors. Vs. Venktesh Gururao Kurati[5], the Supreme Court observed that:

"In our view, non-supply of documents on which the Enquiry Officer does not rely during the course of enquiry does not create any prejudice to the delinquent. It is only those documents, which are relied upon by the Enquiry Officer to arrive at his conclusion, the non-supply of which would cause prejudice being violative of principles of natural justice. Even then, the non-supply of those documents prejudice the case of delinquent officer must be established by the delinquent officer. It is well settled law that the doctrine of principles of natural justice are not embodied rules. It cannot be put in a straitjacket formula. It depends upon the facts and circumstances of each case. To sustain the allegation of violation of principles of natural justice, one must establish that prejudice has been caused to him for non-observance of principles of natural justice."

Therefore it must be shown that any material or document, copy of which has not been supplied to the respondent, was used against him and a prejudice was caused to him. Where it is not shown by the employee that any particular document which may have been made use of by the Inquiry Officer for establishing the charges leveled against him, copies of which or inspection thereof may not have been allowed to the him by the Department, he can not say that any prejudice has been caused to him.

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[1] (2002) 3 SCC 443

[2] 1987 (Supp) SCC 518

[3] (1996) 5 SCC 474

[4] (2001) 6 SCC 392

[5] 2006 AIR SCW 680

17. CrPC s.154 and 156(3)-Judicial guidelines

Recently a single judge of Allahabad High Court took serious note of lax attitude of police in registering FIRs and issued certain guidelines to the police officers and also to the magistrates regarding registration of FIR and investigation into the matter. The court even recommended for disciplinary action against police officers who do not register a genuine FIR. The court observed:

" It is true that for an orderly society, the importance of an effective and efficient police force dedicated to the public service is of utmost importance and is the necessity of the time. It is a matter of common knowledge that the people run from pillar to post after occurrence of a serious crime for mere registration of the report but the concerned police authorities failed to realize trauma and harassment of such people and simply ignore the observance of their statutory duty despite of the same being declared mandatory and is the law of the land settled by the Apex Court. Crime detection and adjudication are two separate though inseparable wings of justice delivery system. The former is the basic obligation of the police and latter is in the hands of judiciary. Though the Code provides for an alternative remedy of approaching the Superintendent of Police and thereafter to the Magistrate concerned under Section 156 (3) but such remedy instead of providing any solace and relief to the harried lot, on the contrary is adding to their sufferance due to persistent lackluster attitude of Police compelling a common man to run from one authority to another for a simple cause of registration of an information constituting commission of a cognizable offence, so that the police may make investigation according to the procedure prescribed in the Code. "

" The Subordinate Courts are already heavily burdened with the huge number of such cases where the people having approached the Police authorities in vain, then had approached the Magistrate concerned under Section 156 (3). Even this Court is now being burdened for the only reason that the information has not been registered by the Police under Section 154 of the Code. What normally ought to have been an exception has turned out to be a routine exercise. A very large number of applications are being filed under Section 156 (3) of the Code before the Magistrates concerned and consequential proceedings are coming frequently to this Court also. Huge time is consumed only in such matters though it could have been utilized for other matters of substance and that too only for the reason that the police has shown blatant slackness in observance of its statutory obligations. It appears that the police is conveniently omitting to remind itself that its fundamental and basic duty is to prevent occurrence of any crime and if it has already occurred, to investigate and detect the crime so as to bring the accused to justice. The first step in this regard is as soon as the information of a cognizable offence is received, it must register the same and thereafter to proceed to investigate the matter in accordance with law. "

" This Court also take judicial notice of the fact that the tendency developed with the police authorities in refusing to register F.I.R. is not for any valid reason, as said above, but perhaps for administrative reasons namely to show to the higher authorities improvement of law and order in the area within their jurisdiction on the ground that number of F.I.R. registration has got down drastically comparing to the corresponding past or in respect to the period when some other police officers were posted thereat. It appears that the State Government and the higher authorities of the police department, while assessing the performance of a police Officer-in-Charge of a police station, take into consideration whether FIR's have reduced comparing to the predecessor in office as a major factor to judge the position of law and order. The basic data taken into account by the State Government or the higher authorities of the police department is the number of F.I.R. of cognizable offence registered in the concerned police station. Probably this has led the tendency in the concerned police authorities to refuse recording of F.I.R. and thereby creating artificially good record showing reduction in crime rate due to lesser recording of F.I.R. It totally ignores the fact that due to none registration of F.I.R. in a large number of cases, pertaining to cognizable offence, the people are compelled to approach the Magistrate by filing applications under Section 156 (3) of the Code. This demonstrates that the declaration of law by the Apex Court as well as this Court that police is under a statutory obligation to register F.I.R. has gone down on blind eyes with the police authorities as well as the Government. The situation has not shown any improvement in the method of functioning of the police authorities in such matters despite of repeated observations by the Court. "

" The Court cannot overlook the fact that criminal justice system in the State is already over burdened. A large number of vacancies of judicial officers in subordinate courts are lying for one or the other reason. Mere inaction on the part of police authorities in observance of their statutory duty and/or faulty system of investigation is adding further to the already over burdened justice system. This has gone to an extent that the people who are arrested in the early younger age are still awaiting for their trial etc. though have attained advanced old age. In many of the matters, large number of accused have died but the court proceedings could not have been completed and even not commenced in some of the cases. In many others the trial etc. suffers due to death of material witnesses due to prolonged time taken in the Courts. At this stage, it would be prudent to notice some of the observations/directions of the Apex Courtin Lalita Kumari Vs. Government of Uttar Pradesh and others 2008 (7) SCC 164. Paras 4 and 5 the Apex Court held :
It is a matter of experience of one of us (B.N. Agrawal,J.) while acting as Judge of the Patna High Court, Chief Justice of the Orissa High Court and Judge of this Court that inspite of law laid down by this Court, the police authorities concerned do not register FIRs unless some direction is given by the Chief Judicial Magistrate or the High Court or this Court. Further, experience shows that even after orders are passed by the Courts concerned for registration of the case, the police does not take the necessary steps and when matters are brought to the notice of the inspecting Judges of the High Court during the course of inspection of the Courts and Superintendents of Police are taken to task, then only FIRs are registered. In a large number of cases investigations do not commence even after registration of FIRs and in a case like the present one, steps are not taken for recovery of the kidnapped person or apprehending the accused person with reasonable dispatch. At times it has been found that when harsh orders are passed by the members of the judiciary in a State, the police becomes hostile to them, for instance, in Bihar when a bail petition filed by a police personnel, who was the accused was rejected by a member of the Bihar Superior Judicial service, he was assaulted in the courtroom for which contempt proceeding was initiated by the Patna High Court and the erring police officials were convicted and sentenced to suffer imprisonment.

On the other hand, there are innumerable cases that where the complainant is a practical person, FIRs are registered immediately, copies thereof are made over to the complainant on the same day, investigation proceeds with supersonic jet speed, immediate steps are taken for apprehending the accused and recovery of the kidnapped persons and the properties which were the subject-matter of theft or dacoity. In the case before us allegations have been made that the Station House Officer of the police station concerned is pressurizing the complainant to withdraw the complaint, which, if true, is a very disturbing state of affairs. We do not know, there may be innumerable such instances. "

The court said that:

It is high time now that this Court must endeavor to find out some ways to make the police authority adhere to their statutory duties. The time perhaps has ripened when this Court in exercise of its inherent power must look into this disease in a more serious manner and find out ways by issuing appropriate directions to the concerned authorities, which may result in compelling the police authorities either to observe their statutory duties faithfully or to face consequences.The Court issued following guidelines:

(i) When a Police Officer-in-Charge of the police station or any other police Officer, acting under the directions of the Officer-in-Charge of police station refuses to register an information disclosing a cognizable offence, the informant may either approach the Superintendent of Police under Section 154 (3) or the Magistrate concerned under section 156 (3) of the Code.

(ii) If the Informant approaches the Superintendent of Police, who finds that the refusal of registration of F.I.R. by the police Officer-in-Charge of the police station was unjust or for reasons other than valid, and where he directs for investigation, he shall initiate disciplinary proceedings against the Officer-in-Charge of the police station for such non observance of statutory obligation treating the same to be a serious misconduct justifying a major penalty and complete the proceedings within three months from the date he passes an order for investigation into the matter.

(iii) Where, the informant approaches the Magistrate concerned under Section 156 (3) of the Code and the Magistrate ultimately finds that information discloses a cognizable offence and direct the police to proceed for investigation, he shall cause a copy of the order sent to Superintendent of Police/Senior Superintendent of Police (hereinafter referred to as the S.P/S.S.P) of the concerned district and such S.P./S.S.P. shall cause a disciplinary inquiry into the matter to find out the person guilty of such dereliction of duty i.e. failure to discharge statutory obligation i.e. registration of an information disclosing cognizable offence treating the said failure as a serious misconduct justifying major penalty and shall complete the disciplinary proceedings within three months from the date of receipt of the copy of the order from the concerned Magistrate. After completing the disciplinary proceedings, the S.P./S.S.P. concerned shall inform about the action taken against the concerned police Officer-in-Charge of the police station to the Magistrate concerned within 15 days from the date of action taken by him but not later than four months from the date of receipt of the copy of the order from the Magistrate concerned.

(iv) The Magistrate concerned shall review the cases in which the copy of the orders passed under Section 156 (3) of the Code has been sent to concerned S.P./S.S.P. quarterly and when it is found that the concerned S.P./S.S.P. has also failed to comply with the above directions of this Court, he shall sent a copy of his order along with the information about non- compliance of this Court's order/direction by the concerned S.P./S.S.P. to the Director General of Police, U.P., Lucknow and the Principal Secretary (Home), U.P., Lucknow who shall look into the matter and take appropriate action as directed above against the police Officer-in-Charge of the police station concerned as well as the S.P./S.S.P. concerned for his inaction also into the matter within three months and communicate about the action within next one month to the Magistrate concerned. The Principal Secretary (Home), U.P., Lucknow and the Director General of Police, U.P. Lucknow shall also submit a report regarding number of the cases informed by the concerned Magistrate in a calender year and also the action taken, by them as directed above by the end of February of every year to the Registrar General of this Court.

(v) Besides above, non compliance of the above directions of this Court shall also be treated to be a deliberate defiance by the concerned authorities above mentioned constituting contempt of this Court and may be taken up before the Court concerned having jurisdiction in the matter, whenever it is brought to the notice of this Court.

The Registrar General of this Court is directed to send a copy of this order forthwith to the Principle Secretary (Home), U.P. Lucknow, the Director General of Police, U.P. Lucknow so that they may issue necessary instructions in respect of the compliance of the various directions contained in the judgement to the concerned S.P./S.S.P. of the concerned districts of the State of U.P. and also to the various Police Officers-in-Charge of the concerned police stations apprising them about the directions of this Court and for compliance thereof."

(see, Roop Ram v. State of UP, Criminal Revision No 2308/2009, Allahabad High Court)

16. Prosecution of Company under s 138, N.I. Act

Section 141 of the The Negotiable Instruments Act deals with offences by companies. Today, on 06/07/2009, the Supreme Court in A.K. Ahuja v V.K. Vora held that: “The criminal liability for the offence by a company under section 138, is fastened vicariously on the persons referred to in sub-section (1) of section 141 by virtue of a legal fiction. Penal statutes are to be construed strictly. Penal statutes providing constructive vicarious liability should be construed much more strictly. When conditions are prescribed for extending such constructive criminal liability to others, courts will insist upon strict literal compliance. There is no question of inferential or implied compliance. Therefore, a specific averment complying with the requirements of section 141 is imperative.”

Relevant portions of the section 141 are extracted below :

"141. Offences by 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:

xxxxx

(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."

Explanation - For the purposes of this section, -

(a) "company means any body corporate and includes a firm or other

association of individuals; and

(b) "director" in relation to a firm, means a partner in the firm.

A three-Judge Bench of the Supreme Court considered the scope of section 141 of the Act in SMS Pharma (I) and held that it is necessary to specifically aver in a complaint under Sections 138 and 141 of the Act, that at the time when the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company and that in the absence of such averment, section 141 cannot be invoked . The Court held:

"What is required is that the persons who are sought to be made criminally liable under Section 141 should be at the time the offence was committed, in charge of and responsible to the company for the conduct of the business of the company. Every person connected with the company shall not fall within the ambit of the provision. It is only those persons who were in charge of and responsible for conduct of business of the company at the time of commission of an offence, who will be liable for criminal action. It follows from this that if a director of a Company who was not in charge of and was not responsible for the conduct of the business of the company at the relevant time, will not be liable under the provision. The liability arises from being in charge of and responsible for conduct of business of the company at the relevant time when the offence was committed and not on the basis of merely holding a designation or office in a company. Conversely, a person not holding any office or designation in a Company may be liable if he satisfies the main requirement of being in charge of and responsible for conduct of business of a Company at the relevant time. Liability depends on the role one plays in the affairs of a Company and not on designation or status. If being a Director or Manager or Secretary was enough to cast criminal liability, the Section would have said so. Instead of "every person" the section would have said "every Director, Manager or Secretary in a Company is liable"....etc.

The court held that : “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."

The court formulated the position as under:

(i) Managing Director/Joint Managing Director: By virtue of the office they hold, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they would fall under Section 141(1), even though there is no specific averment against them.

(ii) Person signing the cheque: The signatory of a cheque which is dishonoured, is clearly responsible for the act and will be covered under sub-section (2) of Section 141. Therefore, no special averment would be necessary to make him liable.

(iii) Director: The fact that a person is a director of a company is not by itself sufficient to make him 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 the 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 there is no deemed liability upon a director

Following above case and discussing several other cases the Apex Court in A.K. Ahuja v. V.K. Vora decidedtoday, on 6/7/2009 held that :

“The prevailing trend appears to require the complainant to state how a Director who is sought to be made an accused, was in charge of the business of the company, as every director need not be and is not in charge of the business of the company. If that is the position in regard to a director, it is needless to emphasize that in the case of non-director officers, there is all the more the need to state what his part is with regard to conduct of business of the company and how and in what manner he is liable.

Having regard to section 141, when a cheque issued by a company (incorporated under the Companies Act, 1956) is dishonoured, in addition to

the company, the following persons are deemed to be guilty of the offence and shall be liable to be proceeded against and punished :

(i) 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;

(ii) any Director, Manager, Secretary or other officer of the company with whose consent and connivance, the offence under section 138 has been committed; and

(iii) any Director, Manager, Secretary or other officer of the company whose negligence resulted in the offence under section 138 of the Act, being committed by the company.

While liability of persons in the first category arises under sub-section (1) of Section 141, the liability of persons mentioned in categories (ii) and (iii) arises under sub-section (2). The scheme of the Act, therefore is, that a person who is responsible to the company for the conduct of the business of the company and who is in charge of business of the company is vicariously liable by reason only of his fulfilling the requirements of sub- section (1). But if the person responsible to the company for the conduct of business of the company, was not in charge of the conduct of the business of the company, then he can be made liable only if the offence was committed with his consent or connivance or as a result of his negligence.”

Section 141 uses the words "was in charge of, and was responsible to

the company for the conduct of the business of the company". It is evident that a person who can be made vicariously liable under sub-section (1) of Section 141 is a person who is responsible to the company for the conduct of the business of the company and in addition is also in charge of the business of the company. There may be many directors and secretaries who are not in charge of the business of the company at all. The meaning of the words "person in charge of the business of the company" was considered by the Supreme Court in Girdhari Lal Gupta v. D.N. Mehta [1971 (3) SCC 189] followed in State of Karnataka v. Pratap Chand [1981 (2) SCC 335] and Katta Sujatha vs. Fertiliser & Chemicals Travancore Ltd. [2002 (7) SCC 655]. It was held that the words refer to a person who is in overall control of the day to day business of the company. This Court pointed out that a person may be a director and thus belongs to the group of persons making the policy followed by the company, but yet may not be in charge of the business of the company; that a person may be a Manager who is in charge of the business but may not be in overall charge of the business; and that a person may be an officer who may be in charge of only some part of the business.

Therefore, if a person does not meet the first requirement, that is being a person who is responsible to the company for the conduct of the business of the company, neither the question of his meeting the second requirement (being a person in charge of the business of the company), nor the question of such person being liable under sub-section (1) of section 141 does not arise. To put it differently, to be vicariously liable under sub-section (1) of Section 141, a person should fulfill the 'legal requirement' of being a person in law (under the statute governing companies) responsible to the company for the conduct of the business of the company and also fulfill the 'factual requirement' of being a person in charge of the business of the company.

Thus, the averment in a complaint that an accused is a director and that he is in charge of and is responsible to the company for the conduct of the business of the company, duly affirmed in the sworn statement, may be sufficient for the purpose of issuing summons to him. But if the accused is not one of the persons who falls under the category of 'persons who are responsible to the company for the conduct of the business of the company' (listed in para 14 above), then merely by stating that 'he was in charge of the business of the company' or by stating that 'he was in charge of the day to day management of the company' or by stating that he was in charge of, and was responsible to the company for the conduct of the business of the company', he cannot be made vicariously liable under section 141(1) of the Act.

The position under section 141 of the Act has been summarized by the Supreme Court in A.K. Ahuja case as under :

(i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix `Managing' to the word `Director' makes it clear that they were in charge of and are responsible to the company, for the conduct of the business of the company.

(ii)In the case of a director or an officer of the company who signed the cheque on behalf of the company, there is no need to make a specific averment that he was in charge of and was responsible to the company, for the conduct of the business of the company or make any specific allegation about consent, connivance or negligence. The very fact that the dishonoured cheque was signed by him on behalf of the company, would give rise to responsibility under sub-section (2) of Section 141.

(iii) In the case of a Director, Secretary or Manager (as defined in Sec. 2(24)

of the Companies Act) or a person referred to in clauses (e) and (f) of section 5 of Companies Act, an averment in the complaint that he was in charge of, and was responsible to the company, for the conduct of the business of the company is necessary to bring the case under section 141(1). No further averment would be necessary in the complaint, though some particulars will be desirable. They can also be made liable under section 141(2) by making necessary averments relating to consent and connivance or negligence, in the complaint, to bring the matter under that sub-section.

(iv)Other Officers of a company can not be made liable under sub-section (1) of section 141. Other officers of a company can be made liable only under sub-section (2) of Section 141, be averring in the complaint their position and duties in the company and their role in regard to the issue and dishonour of the cheque, disclosing consent, connivance or negligence.

In A.K. Ahuja (supra) the supreme court held that a Deputy General Manger is not a person who is responsible to the company for the conduct of the business of the company. He does not fall under any of the categories (a) to (g) listed in section 5 of the Companies Act (extracted in para 14 above). Therefore the question whether he was in charge of the business of the company or not, is irrelevant. He cannot be made vicariously liable under Section 141(1) of the Act. If he has to be made liable under Section 141(2), the necessary averments relating to consent/connivance/negligence should have been made.

15. Administrative Tribunals – whether covered under Art. 227?

In Nagendra Nath Bora vs. Commissioner of Hills Division and Appeals, AIR 1958 SC 398, that under Article 226, the power of interference may extend to quashing an impugned order on the ground of a mistake apparent on the face of the record. But under Article 227 of the Constitution, the power of interference is limited to seeing that the Tribunal functions within the limits of its authority. In Gujarat vs. Vakhatsinghji Vajesinghji Vaghela, AIR 1968 SC 1481, the Supreme Court held, that Article 227 of the Constitution of India gives the High Court the power of superintendence over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction. It is held that this jurisdiction cannot be limited or fettered by any act of the State Legislature. It is held that the supervisory jurisdiction extends to keeping the subordinate Tribunals within the limits of the authority and to seeking that they obey the law. Same view was expressed in Bathutmal Raichand Oswal vs. Laxmibai R. Tarta, (1975) 1 SCC 858, and in State through Special Cell, New Delhi vs. Navjot Sandhu, (2003) 6 SCC 641, With regard to the power of the High Court in withdrawing a case from the Tribunal for deciding it by itself by exercising its power under Article 227, the Supreme Court in Thakur Jugal Kishore Sinha Vs. Sitamarhi Central Coop. Bank Ltd., (1967) 3 SCR 163, held that Article 227 is of wider ambit; it does not limit the jurisdiction of the High Court to the hierarchy of Courts functioning directly under it under the Civil Procedure Code and Criminal Procedure Code but it gives the High Court power to correct errors of various kinds of all Courts and Tribunals in appropriate cases. Needless to add that errors as to the interpretation of the Constitution is not out of the purview of Article 227 although the High Court could not, under the powers conferred by this Article, withdraw a case to itself from a Tribunal and dispose of the same, or determine merely the question of law as to the interpretation of the Constitution arising before the Tribunal. Aforesaid decisions have been relied on by the Supreme Court In State of West Bengal & Ors v. Samar Kumar Sarkar decided today, on 14/07/2009 where it has been held that: “Under Article 227, the High Court has been given power of superintendence both in judicial as well as administrative matters over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction. It is in order to indicate the plentitude of the power conferred upon the High Court with respect to Courts and the Tribunals of every kind that the Constitution conferred the power of superintendence on the High Court. The power of superintendence conferred upon the High Court is not as extensive as the power conferred upon it by Article 226 of the Constitution. Thus, ordinarily it will be open to the High Court, in exercise of the power of superintendence only to consider whether there is an error of jurisdiction in the decision of the Court or the Tribunal subject to its superintendence.’ In this case the high court had passed an order withdrawing the case from the Administrative Tribunal as under: "In our view, with great respect, the learned Tribunal having found no time on earlier occasions, should have placed, at least on a particular date, this matter at the top of the list so that the matter could have been heard. In our order dated 16th August, 2007, it was observed that in the event the learned Tribunal could not hear out this matter, this Court will, in exercise of its power under Article 227 of the Constitution of India withdraw the same and hear out the matter, as the learned Tribunal has failed to decide the matter. Accordingly, we are of the view that the learned Tribunal has failed to decide the matter. We are not oblivious of the position of law that this Court cannot try the above matter at the first instance in view of the judgment of Supreme Court rendered in the case of L.Chandra Kumar vs. Union of India - A.I.R. 1997 SC 1125. But this Court having superintending power cannot remain passive institution when learned Tribunal abdicates its legal, if not constitutional duty. When a subordinate Court or Tribunal fails or neglects absolutely to function, it can be concluded without any hesitation that extra ordinary situation has arisen that endanger due process of law. In such situation to disclose constitutional obligation to the citizens of India, this Court has power, in our opinion, not only to withdraw the case of this nature, but to try the same. The word "Superintendence" is of wide connotation. It has inclusive meaning which inter alia are to oversee, monitor so that things is done or act is accomplished with logical conclusion and finally in case of failure to take upon itself to do and accomplish what ought to have been done by person or forum subordinate to it. Hence, we direct the Registry of the learned Tribunal to transmit all the original records of O.A.No. 912 of 2003 (Samar Kr. Sarkar vs. State of W.B. and Ors.) to this Court, for taking a decision in this matter. The records shall be transmitted to this Court by special messenger, cost of which shall be paid by the applicant and this shall be brought to this Court within fortnight from the date of service of copy of this order." The Supreme Court though did not accept the contention that the High Court has no power of superintendence over the Administrative Tribunals but allowed the appeal and set aside the order of High Court on the ground of propriety and held that it would have been proper if the High Court in exercising its jurisdiction under Article 227 had directed the Tribunal to dispose of the matter expeditiously, instead of transferring the matter to itself.

14. Reservation – not a fundamental right

In C. A. Rajendran v. Union of India, (1968) 1 SCC 721 : (AIR 1968 SC 507) it was clearly laid down by the five Judge Bench that Article 16(4) was only an enabling provision, that Article 16(4) was not a fundamental right and that it did not impose any constitutional duty. It only conferred a discretion on the State. The supreme court held: “Our conclusion therefore is that Article 16(4) does not confer any right on the petitioner and there is no constitutional duty imposed on the government to make reservation for Scheduled Castes and Scheduled Tribes, either at the initial stage or at the stage of promotion. In other words, Article 16(4) is an enabling provision and confers discretionary power on the State to make a reservation of appointment in favour of backward class of citizens which, in its opinion, is not adequately represented in the services of the State.”

The above principle was reiterated in two three Judge Bench judgments in P and T SC/ST Employees' Welfare Association v. Union of India (1988) 4 SCC 147 : (AIR 1989 SC 139 : 1989 Lab IC 1045); and in SBI SC/ST Employees Welfare Association v. State Bank of India (1996) 4 SCC 119 : (1996 AIR SCW 2138 : AIR 1996 SC 1838 : 1996 Lab IC 1612). In fact, as long back as in 1963, in M. R. Balaji v. State of Mysore, 1963 Suppl (1) SCR 439 (at p. 474) : (AIR 1963 SC 649 at p. 664) which was decided by five learned Judges, the Court said the same thing in connection with Articles 15(4) and Article 16(4). Stating that Articles 15(4) and 16(4) were only enabling provisions, Gajendra-gadkar, J. (as he then was) observed :

"In this connection, it is necessary to emphasise that Article 15(4) like Article 16(4) is an enabling provision, it does not impose an obligation, but merely leaves it to the discretion of the appropriate Government to take suitable action, if necessary."

A three Judge Bench in Jagdish Lal v. State of Haryana, (1997) 6 SCC 538 : (1997 AIR SCW 2257 : AIR 1997 SC 2366 : 1997 Lab IC 2301) took a view that. the right to promotion was a statutory right while the rights of the reserved candidates under Article 16(4) and Article 16(4A) were fundamental rights and in that behalf, it followed Ashok Kumar Gupta v. State of U. P., (1997) 5 SCC 201 where a similar principle had been laid down. In these two cases the earlier constitution bench decisions in C A Rajendran and M.R. Balaji and other larger bench decisions referred above, were not brought to the notice of the court.

In Ajit Singh v. State of Punjab AIR 1999 SC 3471 a Five Judge Bench of the Supreme Court overruled the decisions in Jagdish Lal and Ashok Kumar Gupta and held that: “In view of the overwhelming authority right from 1963, we hold that both Articles 16(4) and 16(4A) do not confer any fundamental rights nor do they impose any constitutional duties but are only in the nature of enabling provision vesting a discretion in the State to consider providing reservation if the circumstances mentioned in those Articles so warranted. We accordingly hold that on this aspect Ashok Kumar Gupta, Jagdishlal and the cases which followed these cases do not lay down the law correctly.”

13. S.125 CrPC– is desertion a defence only till divorce?

Sub-section (4) of Section 125, Cr. P.C. provides as under :-

"(4) No wife shall be entitled to receive an allowance from her husband under this section if she is living in adultery, or if, without any sufficient reason, she refuses to live with her husband, or if they are living separately by mutual consent."

Explanation (b) to sub-section (1) of s. 125 of Cr.P.C. provides as under :-

"Explanation.- For the purposes of this Chapter-

(a) ...........................................

(b) "wife" includes woman who has been divorced by, or has obtained a divorce from her husband and has not remarried."

In Rohtash Singh, Petitioner v. Smt. Ramendri AIR 2000 SC952 the husband had filed a petition for divorce on the ground of desertion by wife. During the pendency of the suit for divorce, the respondent wife had filed an application for maintenance under Section 125 of the Code of Criminal Procedure in 1993. In 1995 the suit for divorce was decreed. The application of wife for maintenance was allowed by the Family Court, Meerut in 1997 in spite of the fact that the judgment by which a decree for divorce was passed in favour of the petitioner on the ground of respondent's desertion was brought to the notice of the Family Court. The judgment passed by the Family Court, Meerut was challenged by the petitioner in a Revision filed in the High Court but the Revision was dismissed. Against this judgment the husband filed SLP before the Supreme Court. It was contended that a decree for divorce having been passed under Section 13 of the Hindu Marriage Act on the ground of desertion by the respondent, an order for maintenance could not have been passed in favour of the respondent on account of sub-section (4) of Section 125, Cr. P.C.

The Supreme Court held that wife against whom a decree for divorce has been passed on account of her deserting the husband can claim Maintenance Allowance under Section 125, Cr. P.C. and the plea of desertion by wife cannot be treated to be an effective plea in support of the husband's refusal to pay her the Maintenance Allowance. After decree for divorce is passed she is under no obligation to live with the husband but though marital relations come to an end by the divorce granted by family Court under S. 13 of Hindu Marriage Act, the respondent continues to be wife within meaning of S. 125, Cr. P.C. on account of Expln. (b) to sub-sec (1) of S. 125 which provides that a woman who has been divorced by her husband on account of a decree passed by the Family Court under the Hindu Marriage Act, continues to enjoy the status of a wife for the limited purpose of claiming Maintenance Allowance from her ex-husband. As a wife, she is entitled to maintenance unless she suffers from any of the disabilities indicated in Section 125(4). In another capacity, namely, as a divorced woman, she is again entitled to claim maintenance from the person of whom she was once the wife. A woman after divorce becomes a destitute. If she cannot maintain herself or remains unmarried, the man who was, once, her husband continues to be under a statutory duty and obligation to provide maintenance to her. However since the decree of divorce was passed on the ground of desertion by wife, she would not be entitled to Maintenance for any period prior to the passing of the decree under Section 13 of the Hindu Marriage Act. The court held that :

“Claim for maintenance under the first part of Section 125, Cr. P.C. is based on the subsistence of marriage while claim for maintenance of a divorced wife is based on the foundation provided by Explanation (b) to sub-section (1) of Section 125, Cr. P.C. If the divorced wife is unable to maintain herself and if she has not remarried, she will be entitled to Maintenance Allowance. The Calcutta High Court had an occasion to consider an identical situation where the husband had obtained divorce on the ground of desertion by wife but she was held entitled to Maintenance Allowance as a divorced wife under Section 125, Cr. P.C. and the fact that she had deserted her husband and on that basis a decree for divorce was passed against her was not treated as a bar to her claim for maintenance as a divorced wife. (See : Sukumar Dhibar v. Smt. Anjali Dasi, 1983 Cri LJ 36 (Cal)). The Allahabad High Court also, in the instant case, has taken a similar view. We approve these decisions as they represent the correct legal position.”