KIRSHNA TEXPORT & CAPITAL MARKETS LTD.versusILAA. AGRAWAL & ORS

                        [2015) 6 S.C.R. 284


A                     KIRSHNA TEXPORT &
                     CAPITAL MARKETS LTD.
                                 v.
                     ILAA. AGRAWAL & ORS
B              (Criminal Appeal No.1220 OF 2009)
                           MAY 06, 2015
    [PINAKI CHANDRA GHOSE AND UDAY UM ESH LALIT,JJ.]
C          Negotiable Instruments Act, 1881: ss.138, 141 -
    Whether notice u/s. 138 is mandatorily required to be sent to
    the directors of a company before a complaint could be filed·
    against such directors along with the company- Held: There
    is no requirement in the Act that in such eventuality the
    directors are to be individually issued separate notices u/
0
    s. 138 since the persons who are in charge of affairs of
    company and running the affairs must naturally be aware of
    the notice of demand u/s. 138 issued to such company -
    Therefore, no notice is additionally contemplated to be given
E   to such directors - Notice.

          Allowing the appeal and remitting the matter to
    the High Court, the Court

         HELD: 1. The notice under Section 138 is required
F to be given to "the drawer" of the cheque so as to give
  the drawer an opportunity to make the payment and
  escape the penal consequences. There is nothing in
  Section 138 which may even remotely suggest issuance
  of notice to anyone other than the drawer. Section 141
G states that if the person committing an offence under
  Section 138 is a Company, every director of such
  Company who was in charge of and responsible to that
  Company for conduct of its business shall also be
H deemed to be guilty. The reason for creating vicarious
                               284
KRISHNA TEXPORT & CAPITAL MARKETS LTD. v. ILA 285
            A. AGRAWAL & ORS.

liability is plainly that a juristic entity i.e. a Company     A
would be run by living persons who are in charge of its
affairs and who guide the actions of that Company and
that if such juristic entity is guilty, those who were so
responsible for its affairs and who guided actions of such
juristic entity must be held responsible and ought to be       B
proceeded against. Section 141 again does not lay down
any requirement .that in such eventuality the directors
must individually be issued separate notices under
Section 138. The persons who are in-charge of the affairs
of the Company and running its affairs must naturally          C
be aware of the notice of demand under Section 138 of
the Act issued to such Company. It is precisely for this
reason that no notice is additionally contemplated to be
given to such directors. The opportunity to the 'drawer'
                                                               0
Company is considered good enough for those who are
in charge of the affairs of such Company. If it is their
case that the offence was committed without their
knowledge or that they had exercised due diligence to
prevent such commission, it would be a matter of               E
defence to be considered at the appropriate stage in the
trial and certainly not at the stage of notice under Section
138. [paras 13, 14] [298-G-H; 299-A-F]

        2. If the requirement that such indiyidual F
notices to the directors must additionally be given is
read into the concerned provisions, it will not only be
against the plain meaning and construction of the
provision but will make the remedy under Section 138
wholly cumbersome. In a given case the ordinary lapse G
or negligence on part of the Company could easily be
rectified and amends could be made upon receipt of a
notice under Section 138 by the Company. It would be
unnecessary at that point to issue notices to all the
directors, whose names the payee may not even be H
286        SUPREME COURT REPORTS               [2015] 6 S.C.R.


A     aware of at that stage. Under Second proviso to Section
      138, the notice of demand has to be made within 30
      days of the dishonour of cheque and the third proviso
      gives 15 days time to the drawer to make the payment
      of the amount and escape the penal consequences.
B     Under clause (a) of Section 142, the complaint must be
      filed within one month of the date on which the cause
      of action arises under the third proviso to Section 138.
      Thus, a complaint can be filed within the aggregate
      period of seventy five days from the dishonour, by
C     which time a complainant can gather requisite
      information as regards names and other details as to
      who were in charge of and how they were responsible
      for the affairs of the Company. ";"j,., summary remedy
      created for the benefit of a drawee of a dishonoured
0
      cheque will.thus be rendered completely cumbersome
      and capable of getting frustrated. Section 138 of the
      Act does not admit of any necessity or scope for
      reading into it the requirement that the directors of the
E     Company in question must also be issued individual
      notices under Section 138 of the Act. Such directors
      who are in charge of affairs of the Company and
      responsible for the affairs of the Company would be
      aware of the receipt of notice by the Company under
F     Section 138. [paras 15, 16] [299-G-H; 300-A-G]

         8. Raman & Ors. Vs. Mis. Shasun Chemicals and
      Drugs Ltd. 2006 Cril. L.J. 4552 - overruled

       Girish Chandra Pandey Vs. Kanhaiya/al Chandak and
G Ors. 1999 ALL MR (CRI) JOURNAL 3; Jain Associates and
  Ors. Vs. Deepak Chawdhary & Co. 80 (1999) DLT 654; K.
  Pannir Se/van vs. MMTC and Anr (2000) Cr. L.J. 1002;
  Ranjit Tiwari vs. Narender Nayyar 191 (2012) DLT 318 -
H referred to.
 KRISHNA TEXPORT & CAPITAL MARKETS LTD. v. ILA 287
             A. AGRAWAL & ORS.

     N. K. Wahi v Shekhar Singh (2007) 9 SCC 481 : 2007 A
(3) SCR 883 - distinguished

    Kanai Lal Sur v. Paramnidhi Sadhukhan (1958) SCR
360 ; Nasiruddin and others v. Sita Ram Agarwal (2003) 2
SCC 577:2003 (1) SCR 634- relied on                      B

                  Case Law Reference
 2006 Cril. L.J. 4552       overruled     Para 4
 1999 ALL MR (CRI) JOURNAL 3referred to.  Para 4
 80 (1999) DLT 654          referred to.  Para 4             C
 (2000) Cr. L.J. 1002       referred to.  Para 4
 191 (2012) DLT 318         referred to.  Para 4
 2007 (3) SCR 883           distinguished Para 8
 (1958) SCR 360             relied on     Para 10
 2003 (1) SCR 634           relied on     Para 11            D

      CRIMINAL APPELLATE JURISDICTION : Criminal
Appeal No. 1220 of 2009

       From the Judgment and Order dated 06.05.2008 of E
the High Court of Judicature at Bombay in Criminal
Application No. 2174 of 2007

      AjitAnekar, SatyajitA., lndu Sharma fortheAppellant.

      Shree Prakash, Ashok Bhatia, Shekhar Kumar,            F
Aniruddha P. Mayee, Charudatta Mahindrakar, Selvin Raja,
Asha Gopalan Nair for the Respondents.

      The Judgment of the Court was delivered by
                                                             G
       UDAY UMESH LALIT, J. - 1. This appeal by Special
Leave is directed against the order dated 6.5.2008 passed
by the High Court of Judicature at Bombay rejecting Criminal
Application No. 2174 of 2007 preferred by the appellant for
leave to appeal.                                             H
2BB       SUPREME COURT REPORTS                [2015) 6 S.C.R.


A         2. On 14.09.1996 a notice under Section 13B of the
  'Negotiable Instruments Act, 1BB1 '(hereinafter referred to as
  "the Act") was issued on behalf of the appellant to M/S Inda
  French Bio Tech Enterprises Ltd ('the Company' for short).
  The notice stated that a cheque bearing No. 364776 dated
B B.9.1996 drawn by the Company on Dena Bank, New Marine
  Lines, Mumbai in favour of the appellant was returned on
  10.9.1996 with endorsement "funds insufficient". The notice
  therefore called upon the addressee to make the payment
  of the cheque amount within 15 days of the receipt of such
C notice. No reply was sent to the aforesaid notice dated
  14.9.1996.

          3. The appellant thereafter filed Complaint Case No.
  243/S/1996 before the Additional Chief Metropolitan
D Magistrate, 5th Court at Dadar, Mumbai against the Company,
  Mr. K.J. Bodiwala, the Chairman and Managing Director of
  the Company and 11 other directors including respondents
  1 and 2. In so far as the directors are concerned, it was
  averred that they were in-charge of the business of the
E Company and its day to day affairs and were liable. During
  the pendency of said complaint case, the process issued
  against Accused Nos. 3 to 5, 7, 9 to 13 was recalled and
  due to the death of Mr. Bodiwala the proceedings as against
F him also abated, which left the Company and the present
  respondents 1 and 2 namely Ms. Ila A. Agrawal and Mr.
  Prafulla Ranadive, Accused Nos. 6 and B respectively in the
  array of accused.

          4. It was submitted by the appellant that separate
G notices to the directors were additionally issued but at the
  stage of evidence it turned out that such individual notices
  to the directors were with respect to dishonour of a different
  cheque. The facts as found therefore were that no individual
H notices were given to the director'>. The Metropolitan
  Magistrate by his judgment and order dated 30.4.2007
KRISHNA TEXPORT & CAPITAL MARKETS LTD. v. ILA 289
   A. AGRAWAL & ORS. [UDAY UMESH LAUT, J.)

convicted the Company but acquitted respondents 1 and 2 A
of t~e offence punishable under Section 138 of the Act.
Relying on the judgment of the Division Bench of Madras
High Court in B. Raman & Ors. Vs. Mis. Shasun Chemicals
and Drugs Ltd. reported in 2006 Cril. L.J. Page 4552, it
was observed that statutory notice under Section 138 of the B
Act was required to be issued to every Director and for non-
compliance of such mandatory requirement respondents 1
and 2 could not be proceeded against.

        5. The appellant being aggrieved filed Criminal          C
Application No. 2174 of 2007 in the High Court seeking leave
to prefer appeal against the judgment acquitting respondents
1 and 2. It was submitted that it was not necessary to serve
individual notice upon the directors and it was sufficient if
the notice was served on the Company. Reliance was placed        D
on the decision of a Single Judge of the Calcutta High Court
in the case of Girish Chandra Pandey Vs. Kanhaiyalal
Chandak and Ors. reported in 1999 ALL MR (CRI)
JOURNAL 3, wherein it was held that if the partnership firm
failed to give the amount within the stipulated time after       E
receipt of notice, each partner need not be served with a
separate notice individually. So also reliance was placed on
the decision of a Single Judge of Delhi High Court in the
case of Jain Associates and Ors. Vs. Deepak Chawdhary            F
& Co. reported in 80 (1999) DLT 654, wherein it was laid
down that Section 141 of the Act does not require that each
and every partner of the firm is required to be issued notice.

       Similar view was taken by High Court of Andhra
Pradesh in K. Pannir Se/van vs. MMTC and another G
reported in (2000) Cr. L.J. 1002 and by Delhi High Court in
Ranjit Tiwari vs. Narender Nayyar reported in 191 (2012)
DLT 318.

       6. The High Court, relying on the judgment of the         H
290         SUPREME COURT REPORTS                 [2015] 6 S.C.R.


A     Division Bench of Madras High Court B. Raman & Ors.
      (supra) observed that it was mandatory to have issued
      separate notices to the directors. The High Court concluded
      thus:-

 B      "If the legal fiction is created by Section 141 to make
        directors who are responsible for day to day affairs of
        the Company, punishable under Section 138, then it is
        necessary that they get an opportunity to rectify, the
        mistake or clarify matters after service of notice. So
C       before making the complaint against the directors,
        notice necessarily must be served on them. In my
        opinion without service of notice to accused Nos. 6 &
        8, vicarious liability of the offence under Section 138
        cannot be fixed upon them."
D
             7. At this stage the decision of the Division Bench of
      Madras High Court in B. Raman & others (Supra) may also
      be referred to. Para 2 of said decision sets out that the
      matter was referred to the Division Bench as a result of
E     divergent views taken by Single Judges of the Court. Paras
      25 and 26 of the decision are as under:-

        "25.Under Section 141 (1), the persons in charge of
        and responsible to the Company shall be deemed to
F       have committed the offence. Under sub section (2),
        even the persons, who are not stated to be in charge
        of and responsible to the Company, can be prosecuted,
        if it is alleged and proved that the offence has been
        committed with the consent or connivance of, or is
G       attributable to, any neglect on the part of any of those
        persons prosecuted. So, these Sections would provide
        that when there are Directors, who are responsible for
        the conduct of the business of the Company, and when
        there are other officers, with whose consent the offence
H       has been committed, the complainant shall make
KRISHNA TEXPORT & CAPITAL MARKETS LTD. v. ILA 291
   A. AGRAWAL & ORS. [UDAY UMESH LAUT, J.]

 averments to the said effect. In that context, the          A
 complainant has to start the process of getting back
 the cheque amount from those persons, who represent
 the Company, in order to avoid the filing of the
 Complaint against them. In the said process, he has
 to necessarily make a demand from those persons,            B
 who are part and parcel of the drawer. Only when the
 process fails, the cause of action, as envisaged in
 Section 138, would arise against them, to enable the
 complainant to approach the Court, within the stipulated
 time. So, _the starting of the process is, the service of   c
 notice on the persons, who represent the Compony,
 the drawer of the cheque.

  26. The object of the notice is to give a chance to the
  drawer of the cheque to rectify his omission and also      D
  to protect an honest drawer. Service of notice of
  demand in Clause (b) of the proviso to Section 138 is
  a condition precedent for filing a complaint under
  Section 138. By sending a notice to the Company as
  well as the persons in charge of and responsible fore      E
  the conduct of the business of the company, he can
  make a demand, asking them to pay the amount. Some
  may reply that they are not in charge of and responsible
  for the conduct of the business of the Company. Some
                                                             F
  may reply that they are not connected with the
 Company in any way and some may rectify the
  omission, by making efforts to pay the amount to the
 payee, in the name of the Company, in that event, the
  complainant may either drop the action of filing the       G
 Complainant or, in the event of non-payment of the
 cheque amount, he may choose the persons, who are
 really responsible fore the commission of offence and,
 then, initiate prosecution against them."
                                                             H
     8. It was submitted by Mr. Ajit Anekar, learned
292             SUPREME COURT REPORTS                   (2015] 6 S.C.R.


A Advocate for the appellant that Section 138 does not
  contemplate issuance of separate notices to the directors
  and that no such requirement ought to be read into said
  Section. Mr. Shree Prakash Sinha and Mr. Ashok Bhatia,
  learned Advocates appearing for respondents relied upon
B the decision of the Division Bench of Madras High Court in
  B. Raman & others (Supra). It was submitted that though
  the issue whether such separate notices are mandatorily
  required to be given to the Directors had not squarely arisen,
  paras 10 & 11 of the decision of this Court in N.K. Wahi v
C Shekhar Singh1 did speak of such notices. We quote said
  paras 10 & 11 :-

            "10. In order to bring application of Section 138 the
            complaint must show:
D
            1 That Cheque was issued;
            2. The same was presented;
            3. It was dishonored on presentation;
E
            4. A notice in terms of the provisions was served on
            the person sought to be made liable;

            5. Despite service of notice, neither any payment was
F           made nor other obligations, if any, were complied with
            within fifteen days from the date of receipt of the notice.

            11. Section 141 of the Act in terms postulates
            constructive liability of the Directors of the company or
            other persons responsible for its conduct or the
G
            business of the company."

              9. The question, therefore, is whether notice under
      Section 138 of the Act is mandatorily required to be sent to
      the directors of a Company before a complaint could be filed
H
      1
          (2007)9 sec 481
KRISHNA TEXPORT & CAPITAL MARKETS LTD. v. ILA 293
   A. AGRAWAL & ORS. [UDAY UMESH LAUT, J.]

against such directors along with the Company. At the outset A
we must consider whether the decision of this Court in N.K.
Wahi (supra) had considered and concluded that it is
obligatory to issue separate notices to the Directors in
addition to the Company, before initiating any proceedings
against them. We have perused the decision and find that B
no such issue had arisen for consideration in that case. We,
therefore, proceed to consider the question. Before we
deal whh the matter, Sections 138 and 141 of the Act may
be quoted:-
                                                                 c
  "138. Dishonour of cheque for insufficiency, etc.,
  of funds in the accounts

      Where any cheque drawn by a person on an
  account maintained by him with a banker for p~yment            D
  of any amount of money to another person from out of
  that account for the discharge, in whole or in part, of
  any debt or other liability, is returned by the bank unpaid,
  either bec~use of the amount of money standing to
  the credit of that account is insufficient to honour the       E
  cheque or that it exceeds the amount arranged to be
  paid from that account by an agreement made with
  that bank, such person shall be deemed to have
  committed an offence and shall without prejudice to
  any other provisions of this Act, be punished with             F
  imprisonment for "a term which may extend to two year",
  or with fine which may extend to twice the amount of
  the cheque, or with both:

  Provided that nothing contained in this section shall          G
  apply unless-

  (a) The cheque has been presented to the bank within
  a period of six months from the date on which it is drawn
  or within the period of its validity, whichever is earlier.    H
294      SUPREME COURT REPORTS                   [2015] 6 S.C.R.


A     (b) The payee or the holder induce course of the
      cheque, as the case may be, makes a demand for the
      payment of the said amount of money by giving a notice,
      in writing, to the drawer, of the cheque, "within thirty
      days" of the receipt of information by him from the bank
B     regarding the return of the cheques as unpaid, and

      (c) The drawer of such cheque fails to make the
      payment of the said amount of money to the payee or,
      as the case may be, to the holder in due course of the
c     cheque, within fifteen days of the receipt of the said
      notice.

      Explanation: For the purpose of this section, "debt or
      other liability" means a legally enforceable debt or other
D     liability..

      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
E     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 proceeded against and
F     punished accordingly;

      Provided that nothing contained in t~::i sub-section shall
      render any person liable to punishment if he proves
      that the offence was committed without his know1edge,
      or that he had exercised all due diligence to prevent
G
      the commission of such offence.

      "Provided further that where a person is nominated as
      a Director of a Company by virtue of his holding any
      office or employment in the Central Government or
H
      State Government or a financial corporation owned or
    KRISHNA TEXPORT & CAPITAL MARKETS LTD. v. ILA 295
       A. AGRAWAL & ORS. [UDAY UMESH LAUT, J.]

      controlled by the Central Government or the State            A
      Government, as the case may be, he shall not be liable
      for prosecution under this Chapter.

      (2) Notwithstanding anything contained in sub-section
      (1 ), where any offence under this Act has been              B
      committed by a Company and it is proved that the
      offence has been committed with the consent or
      connivance of, or is attribute to, any neglect on the
      part of, any director, Manager, secretary, or other office
      of the Company, such director, manager, secretary or         C
      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 purpose
      of this section. -
                                                                   D
      (a) "Company" means any body corporate and includes
      a firm or other association of individuals; and

      (b) "Director", in relating to a firm, means a partner in
      the firm."                                                   E
      The expression "drawer" used in Section 138 has to
      be understood in the light of the definition in Section 7
      of the Act which is to the following effect :-

      " .. The maker of a bill of exchange or cheque is called     F
      the "drawer"; the person thereby directed to pay is called
      the 'drawee."

           10. Since the High Court has read into Section 138
of the Act the requirement that separate notices ought to be G
given to the directors, without which they cannot be made
vicariously liable, the principles concerning interpretative
function of the Court may be adverted to. In Kanai Lat Sur
v. Paramnidhi Sadhukhan 2 it was observed,
2
    (1958) SCR 360
                                                                   H
296           SUPREME COURT REPORTS                 [2015] 6 S.C.R.


A        "In support of his argument Mr. Chatterjee has naturally
         relied on the observations made by Barons of the
         Exchequer in Heydon's case. Indeed these
         observations have been so frequently cited with
         approval by courts administering provisions of welfare
B        enactments that they have now attained the status of
         a classic on the subject and their validity cannot be
         challenged. However, in applying these observations
         to the provisions of any statute, it must always be borne
         in mind that the first and primary rule of construction is
c        that the intention of the Legislature must be found in
         the words used by the Legislature itself. If the words
         used are capable of one construction only then it would
         not be open to the courts to adopt any other hypothetical
         construction on the ground that such hypothetical
D
         construction is more consistent with the alleged object
         and policy of the Act. The words used in the material
         provisions of the statute must be interpreted in their
         plain grammatical meaning and it is only when such
E        words are capable of two constructions that the
         question of giving effect to the policy or object of the
         Act can legitimately arise. When the material words
         are capable of two constructions, one of which is likely
         to defeat or impair the policy of the Act whilst the other
F        construction is likely to assist the achievement of the
         said policy, then the courts would prefer.to adopt the
         latter construction. It is only in such cases that it
         becomes relevant to consider the mischief and defect
         which the, Act purports to remedy and correct."
G
             11 . In Nasiruddin and others v. Sita Ram AgarwaP
      this Court stated the law in the following terms:

         "37. The court's jurisdiction to interpret a statute can
         be invoked when the same is ambiguous. It is well
H
      ' (2003) 2   sec sn
 KRISHNA TEXPORT & CAPITAL MARKETS LTD. v. ILA 297
    A. AGRAWAL & ORS. [UDAY UMESH LAUT, J.]

   known that in a given case the court cari-lron out the             A
   fabric but it cannot change the texture of the fabric. It
   cannot enlarge the scope of legislation or intention
   when the language of the provision is plain and
   unambiguous. It cannot add or subtract words to a
   statute or read something into it which is not there. It           B
   cannot rewrite or recast legislation. It is also necessary
   to determine that there exists a presumption that the
   legislature has not used any superfluous words. It is
   well settled that the real intention of the legislation must
   be gathered from the language used ......... "                     c
        12. In Nathi Devi v. Radha Devi Gupta 4 a
Constitution Bench of this Court was called upon to consider,
inter alia, whether the expression, "where the landlord is a
widow and the premises let out by her, or by her husband, D
are required by her for her own residence" appearing in
Section 14-D of the Delhi Rent Control Act would include
every widow so as to entitle her to obtain immediate
possession of the premises owned by her. While holding
that the benefit under Section 14-D is available only to a E
widow, where premises are let out by her or by her husband,
this Court repelled the contention that a widow who had
acquired tenanted premises by sale or transfer could also
invoke the provisions of Section 14-D. During the course of F
its decision this Court observed:

    "The interpretative function of the court is to discover
    the true legislative intent. It is trite that in interpreting a
     statute the court must, if the words are clear, plain,
                                                                      G
     unambiguous and reasonably susceptible to only one
    meaning, give to the words that meaning, irrespective
    of the consequences. Those words must be expounded
    in their natural and ordinary sense. When the language
    is plain and unambiguous and admits of only one
                                                                      H
• (2003) 2 sec 577
298         SUPREME COURT REPORTS                   [2015] 6 S.C.R.


A        meaning, no question of construction of statute arises,
         for the Act speaks for itself. Courts are not concerned
         with the policy involved or that the results are injurious
         or otherwise, which may follow from giving effect to the
         language used. If the words used are capable of one
B        construction only then it would not be open to the courts
         to adopt any other hypothetical construction on the
         ground that such construction is more consistent with
         the alleged object and policy of the Act. In considering
         whether there is ambiguity, the court must look at the
c        statute as a whole and consider the appropriateness
         of the meaning in a .particular context avoiding absurdity
         and inconsistencies or unreasonableness which may
         render the statute unconstitutional."

D             13. With these principles in mind, we now consider
      the provisions in question. According to Section 138, where
      any cheque drawn by a person on an account maintained
      by him is returned by the Bank unpaid for reasons mentioned
      in said Section such person shall be deemed to have
E     committed an offence. The proviso to the Section stipulates
      three conditions on the satisfaction of which the offence is
      said to be completed. The proviso inter alia obliges the payee
      to make a demand for the payment of said amount of money
F     by giving a notice in writing to "the drawer of the cheque"
      and if "the drawer of the cheque" fails to make the payment
      of the said amount within 15 days of the receipt of said notice,
      the stages stipulated in the proviso stand fulfilled. The notice
      under Section 138 is required to be given to "the drawer" of
G     the cheque so as to give the drawer an opportunity to make
      the payment and escape the penal consequences. No other
      person is contemplated by Section 138 as being entitled to
      be issued such notice. The plain language of Section 138 is
      very clear and leaves no room for any doubt or ambiguity.
H     There is nothing in Section 138 which may even remotely
KRISHNA TEXPORT & CAPITAL MARKETS LTD. v. ILA 299
   A. AGRAWAL & ORS. [UDAY UMESH LAUT, J.]

suggest issuance of notice to anyone other than the drawer.         A

         14. Section 141 states that ifthe person committing
an offence under Section 138 is a Company, every director
of such Company who was in charge of and responsible to
that Company for conduct of its business shall also be              B
deemed to be guilty. The reason for creating vicarious liability
is plainly that a juristic entity i.e. a Company would be run by
living persons who are in charge of its affairs and who guide
the actions of that Company and that if such juristic entity is
guilty, those who were so responsible for its affairs and who       C
guided actions of such juristic entity must be held responsible
and ought to be proceeded against. Section 141 again does
not lay down any requirement Jhat in such eventuality the
directors must individually be issued separate notices under
Section 138. The persons who are in charge of the affairs           D
of the Company and running its affairs must naturally be
aware of the notice of demand under Section 138 of the Act
issued to such Company. It is precisely for this reason that
no notice is additionally contemplated to be given to such
directors. The opportunity to the 'drawer' Company is               E
considered good enough for those who are in charge of the
affairs of such Company. If it is their case that the offence
was committed without their knowledge or that they had
exercised due diligence to prevent such commission, it would        F
be a matter of defence to be considered at the appropriate
stage in the trial and certainly not at the stage of notice under
Section 138.

       15. If the requirement that such individual notices
to the directors must additionally be given is read into the G
concerned provisions, it will not only be against the plain
meaning and construction of the provision but will make the
remedy under Section 138 wholly cumbersome. In a given
case the ordinary lapse or negligence on part of the Company H
could easily be rectified and amends could be made upon
300      SUPREME COURT REPORTS                 (2015] 6 S.C.R.


A receipt of a notice under Section 138 by the Company. It
  would be unnecessary at that point to issue notices to all the
  directors, whose names the payee may not even be aware
  of at that stage. Under Second proviso to Section 138, the
  notice of demand has to be made within 30 days of the
B dishonour of cheque and the third proviso gives 15 days
  time to the drawer to make the payment of the amount and
  escape the penal consequences. Under clause (a) of Section
  142, the complaint must be filed within one month of the
  date on which the cause of action arises under the third
C proviso to Section 138. Thus a complaint can be filed within
  the aggregate period of seventy five days from the dishonour,
  by which time a complainant can gather requisite information
  as regards names and oth~rdetails as to who were in charge
  of and how they were responsible. for the affairs of the
0
  Company. But if we accept the logic that has weighed with
  the High Court in the present case, such period gets reduced
  to 30 days only. Furthermore, unlike proviso to clause (b) of
  Section 142 of the Act, such period is non-extendable. The
E summary remedy created for the benefit of a drawee of a
  dishonoured cheque will thus be rendered completely
  cumbersome and capable of getting frustrated.

          16. In our view, Section 138 of the Act does not admit
F of any necessity or scope for reading into it the requirement
  that the directors of the Company in question must also be
  issued individual notices under Section 138 of the Act. Such
  directors who are in charge of affairs of the Company and
  responsible for the affairs of the Company would be aware
G of the receipt of notice by the Company under Section 138.
  Therefore neither on literal construction nor on the touch
  stone of purposive construction such requirement could or
  ought to be read into Section 138 of the Act. Consequently
  this appeal must succeed. The order passed by the High
H Court is set aside. Since the matter was at the stage of
KRISHNA TEXPORT & CAPITAL MARKETS LTD. v. ILA 301
   A. AGRAWAL & ORS. [UDAY UMESH LAUT, J.]

considering application for leave to appeal and the merits of A
the matter were not considered by the High Court, we remit
the matter to the High Court for fresh consideration which
may be decided as early as possible. Concluding so, we
must record that the decision of the Division Bench of the
Madras High Court in B. Raman & Ors. Vs. Mis. Shasun B
Chemicals and Drugs Ltd. (supra) was incorrect and it
stands overruled. The appeal is allowed in these terms.

Devika Gujral                     Appeal allowed and matter
                                  remitted back to High Court.   c