Appellate Division (Criminal) :
Nazmun Ara Sultana J
Syed Mahmud Hossain J
Md Imman Ali J
Md Anwarul Haque J
Islami Bank Bangladesh Ltd.
……Petitioner
vs
Ferdous Khan @ Alamgir and another…….Respondents
Judgment
February 9th, 2014
Negotiable Instruments Act (XXVI of 1881)
Sections 138 and 140
The liability under Section 138 can be termed as a strict liability offence. Pursuant to Section 140, the person, who issued the cheque, whether on his own behalf or on behalf of a company of which he is in charge or for which he is responsible cannot escape liability under the Act . (10)
Morever, if for any reason whatsoever, let alone the omission of the company as an accused, the other persons who are in charge of the affairs of the company or have knowledge about the affairs of the company cannot escape from criminal liability if they are served with the notice. .. …. (11)
Punjab Ali Pramanik vs Mohd. Mokarram Hossain, 29 DLR (SC) 185 and Mohammad Eusof Babu vs State. Criminal Appeal Nos. 7-22 of 2011 [68 DLR (AD) 298] ref.
Md Nazril Islam, Senior Advocate, Instructed by Nurul Islam Bhuiyan Advocate-on-Record-For the Petitioner.
None Represented -For the Respondents.
Judgment
Md lmman Ali J. : The delay of 112 days in filing the criminal petition for leave to appeal is hereby condoned.
2. This criminal petition for leave to appeal is directed against the judgment and order dated 6-5-2010 passed by a Division Bench of the High Court Division in Criminal Miscellaneous Case No. 4883 of 2009 making the Rule absolute.
3. The facts relevant for disposal of the caseare that Islami Bank Bangladesh Ltd., Agrabad Branch, represented by its Principal Officer Abdul Wadud, as the payee, has filed a petition of complaint against one Ferdous Khan alias Alamgir under Section 138 of the Negotiable Instrument Act, 1881, (the Act alleging, inter alia, that the respondent is the Managing Director of Bagdad Exim Corporation Ltd. aprivate company limited by shares. On application of the respondent for loan, to run his business, the payee bank sanctioned loan against the name of the company of the respondent the sum of Taka 25,87,26,294.70 on 30-6-2007. When the bank asked to repay the loan, the respondent issued two cheques on 25-1-2008 and 25-2-2008 respectively, on behalf of Bagdad Exim Corporation Ltd., as its Managing Director, each cheque for Taka 2,40,28,588. These two cheques were deposited on 26-2-2008, but both were dishonoured on the same date due to insufficiency of fund. Thereafter, demand notice was sent on 2-3-2008 at the business address of the respondent by the lawyer of the bank and the respondent received the same on 10-3-2008 but the respondent did not pay the amount due under the cheques. Thereafter, on 8-5-2008 the bank filed a complaint petition under Section 138 of the Act against the respondents before the Chief Metropolitan Magistrate, Chittagong who took cognizance of the case, whereupon the CR Case No. 107 of 2008 was registered.
4. The respondent No. 1 voluntarily surrendered before the learned Magistrate on 28-10-2008 and obtained bail. At this stage the respondent filed Criminal Miscellaneous Case No. 4883 of 2009 under Section 561A of the Code of Criminal Procedure, wherein Rule was issued.
5. By the impugned judgment and order the Rule was made absolute thereby quashing the proceeding instituted under Sections 138 and 140 of the Negotiable Instruments Act. Hence the petitioner filed the instant criminal petition for leave to appeal before this Division.
6. Mr Muhammad Nazrul Islam, learned senior Advocate appearing on behalf of the petitioner submitted that the High Court Division failed to appreciate that the accused being the Managing Director of the company cannot avoid his liability to pay the amount due under the dishonoured cheques. He further submitted that the omission of the name of the company as accused is a simple case of defect of party which can be cured by adding the company as party at a later stage. He also submitted that the accused being the Managing Director and having signed the cheques as the authorized and competent person is liable under Section 138 read with Section 140 of the Negotiable Instruments Act.
7. We have considered the submissions made by the learned Advocate for the petitioner, perused the impugned judgment and order as well as other materials on record.
8. The liability under Section 138 of the Act can be termed as a strict liability where a cheque has been returned to the payee having been dishonoured by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account then the person, issuing the cheque is strictly liable. Section 140 of the Act provides that:
“If the offence under Section 138 is committal by a company, then every PERSON who, at the time the offence was committed, was in charge of, and WAS responsible to, lite 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. ”
9. The High Court Division quashed the proceedings against the Managing Director of the company, who signed the cheques on behalf of the company, as the company, being the principal, was not made an accused in the case.
10. The person, who issued the cheque, whether on his own behalf or on behalf of a company of which he is in charge or for which he is responsible cannot escape liability under the Act. In such circumstances, the proceeding against the accused cannot be quashed. The matter will be decided upon trial whether or not the omission of the company as accused is fatal to the prosecution of the Managing Director of the company, who issued the cheques on behalf of the company. The case referred to by the learned Judge of the High Court Division namely Punjab Ali Pramanik vs Mohd. Mokarram Hossain, 29 DLR (SC) 185 has no manner of application in the facts and circumstances of the instant case.
11. The point in issue was elaborately discussed and decided by this Division in Mohammad Eusof Babu vs State and another, Criminal Appeal Nos. 7-22 of 2011 [68 DLR (AD) 298]. One of us was a party in that decision. It was held that if for any reason the company is not prosecuted, the other persons who are in charge of the affairs of the company or have knowledge about the affairs of the company cannot escape from criminal liability if they are ” served with the notice.
In the light of the above discussion, the impugned judgement and order is set-aside and accordingly the criminal petition for leave to appeal is disposed of.
Nazmun Ara Sultana J
Syed Mahmud Hossain J
Md Imman Ali J
Md Anwarul Haque J
Islami Bank Bangladesh Ltd.
……Petitioner
vs
Ferdous Khan @ Alamgir and another…….Respondents
Judgment
February 9th, 2014
Negotiable Instruments Act (XXVI of 1881)
Sections 138 and 140
The liability under Section 138 can be termed as a strict liability offence. Pursuant to Section 140, the person, who issued the cheque, whether on his own behalf or on behalf of a company of which he is in charge or for which he is responsible cannot escape liability under the Act . (10)
Morever, if for any reason whatsoever, let alone the omission of the company as an accused, the other persons who are in charge of the affairs of the company or have knowledge about the affairs of the company cannot escape from criminal liability if they are served with the notice. .. …. (11)
Punjab Ali Pramanik vs Mohd. Mokarram Hossain, 29 DLR (SC) 185 and Mohammad Eusof Babu vs State. Criminal Appeal Nos. 7-22 of 2011 [68 DLR (AD) 298] ref.
Md Nazril Islam, Senior Advocate, Instructed by Nurul Islam Bhuiyan Advocate-on-Record-For the Petitioner.
None Represented -For the Respondents.
Judgment
Md lmman Ali J. : The delay of 112 days in filing the criminal petition for leave to appeal is hereby condoned.
2. This criminal petition for leave to appeal is directed against the judgment and order dated 6-5-2010 passed by a Division Bench of the High Court Division in Criminal Miscellaneous Case No. 4883 of 2009 making the Rule absolute.
3. The facts relevant for disposal of the caseare that Islami Bank Bangladesh Ltd., Agrabad Branch, represented by its Principal Officer Abdul Wadud, as the payee, has filed a petition of complaint against one Ferdous Khan alias Alamgir under Section 138 of the Negotiable Instrument Act, 1881, (the Act alleging, inter alia, that the respondent is the Managing Director of Bagdad Exim Corporation Ltd. aprivate company limited by shares. On application of the respondent for loan, to run his business, the payee bank sanctioned loan against the name of the company of the respondent the sum of Taka 25,87,26,294.70 on 30-6-2007. When the bank asked to repay the loan, the respondent issued two cheques on 25-1-2008 and 25-2-2008 respectively, on behalf of Bagdad Exim Corporation Ltd., as its Managing Director, each cheque for Taka 2,40,28,588. These two cheques were deposited on 26-2-2008, but both were dishonoured on the same date due to insufficiency of fund. Thereafter, demand notice was sent on 2-3-2008 at the business address of the respondent by the lawyer of the bank and the respondent received the same on 10-3-2008 but the respondent did not pay the amount due under the cheques. Thereafter, on 8-5-2008 the bank filed a complaint petition under Section 138 of the Act against the respondents before the Chief Metropolitan Magistrate, Chittagong who took cognizance of the case, whereupon the CR Case No. 107 of 2008 was registered.
4. The respondent No. 1 voluntarily surrendered before the learned Magistrate on 28-10-2008 and obtained bail. At this stage the respondent filed Criminal Miscellaneous Case No. 4883 of 2009 under Section 561A of the Code of Criminal Procedure, wherein Rule was issued.
5. By the impugned judgment and order the Rule was made absolute thereby quashing the proceeding instituted under Sections 138 and 140 of the Negotiable Instruments Act. Hence the petitioner filed the instant criminal petition for leave to appeal before this Division.
6. Mr Muhammad Nazrul Islam, learned senior Advocate appearing on behalf of the petitioner submitted that the High Court Division failed to appreciate that the accused being the Managing Director of the company cannot avoid his liability to pay the amount due under the dishonoured cheques. He further submitted that the omission of the name of the company as accused is a simple case of defect of party which can be cured by adding the company as party at a later stage. He also submitted that the accused being the Managing Director and having signed the cheques as the authorized and competent person is liable under Section 138 read with Section 140 of the Negotiable Instruments Act.
7. We have considered the submissions made by the learned Advocate for the petitioner, perused the impugned judgment and order as well as other materials on record.
8. The liability under Section 138 of the Act can be termed as a strict liability where a cheque has been returned to the payee having been dishonoured by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account then the person, issuing the cheque is strictly liable. Section 140 of the Act provides that:
“If the offence under Section 138 is committal by a company, then every PERSON who, at the time the offence was committed, was in charge of, and WAS responsible to, lite 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. ”
9. The High Court Division quashed the proceedings against the Managing Director of the company, who signed the cheques on behalf of the company, as the company, being the principal, was not made an accused in the case.
10. The person, who issued the cheque, whether on his own behalf or on behalf of a company of which he is in charge or for which he is responsible cannot escape liability under the Act. In such circumstances, the proceeding against the accused cannot be quashed. The matter will be decided upon trial whether or not the omission of the company as accused is fatal to the prosecution of the Managing Director of the company, who issued the cheques on behalf of the company. The case referred to by the learned Judge of the High Court Division namely Punjab Ali Pramanik vs Mohd. Mokarram Hossain, 29 DLR (SC) 185 has no manner of application in the facts and circumstances of the instant case.
11. The point in issue was elaborately discussed and decided by this Division in Mohammad Eusof Babu vs State and another, Criminal Appeal Nos. 7-22 of 2011 [68 DLR (AD) 298]. One of us was a party in that decision. It was held that if for any reason the company is not prosecuted, the other persons who are in charge of the affairs of the company or have knowledge about the affairs of the company cannot escape from criminal liability if they are ” served with the notice.
In the light of the above discussion, the impugned judgement and order is set-aside and accordingly the criminal petition for leave to appeal is disposed of.
