Holding

A complaint must expressly state that the person was in charge of and responsible for the conduct of the business of the company at the time of the offence; mere directorship or participation in a resolution does not satisfy Section 141.

Summary

The appellant, S.M.S. Pharmaceuticals Ltd., filed a complaint under Sections 138 and 141 of the Negotiable Instruments Act alleging that a cheque issued by the respondent company was dishonoured. The complaint named the company, its Managing Director, and Director Neeta Bhalla, asserting that the directors were actively involved in the company's affairs based on a resolution dated 15‑02‑1995. The High Court quashed the complaint against Neeta Bhalla, holding that the allegations were vague and did not satisfy the statutory requirements of Section 141. On appeal, the Supreme Court examined whether a complaint must specifically aver that a person was "in charge of and responsible for the conduct of business" of the company at the time of the offence, and whether a director can be deemed liable merely by virtue of his position. The Court held that such specific averments are essential; mere directorship or participation in a resolution is insufficient. Consequently, the complaint against Neeta Bhalla failed to meet Section 141 requirements and the appeal was dismissed.

Issues considered

Whether a complaint under Section 141 of the Negotiable Instruments Act must specifically aver that the accused was in charge of and responsible for the conduct of the company's business at the time of the offence.
Whether a director is deemed to be in charge of and responsible for the company's conduct and thus liable under Section 141 unless he proves otherwise.
If specific averments are required, can the managing director or other officers be proceeded against in the absence of such averments against a particular director.

Legislation cited

Code of Criminal Procedures. 362, s. 397, s. 482, s. 561-A
Negotiable Instruments Act, 1881s. 138, s. 141

Subjects

Negotiable Instruments ActSection 141Director liabilityVicarious liabilityCheque dishonourCriminal Procedure CodeInherent jurisdictionComplaint requirements

Judgment

A S.M.S. PHARMACEUTICALS LTD.
v. -- -
'
NEETA BHALLA AND ANR.

FEBRUARY 20, 2007

B (S.B. SINHA AND MARKANDEY KA TJU, JJ.]

Negotiable Instruments Act, 1881-Sections 138 and 141-Dishonor of 'r
cheque-Offence by Company-Liability of Director-Director resigning two
years prior to issuance of cheque by Company-Held: Sufficient averment
c should be made against the Director in the complaint petition that the
Director was incharge of and was responsible for the conduct of the business
of the Company-Merely being a party to a purported resolution does not
show that the Director was actively associated with the management of the
affairs of the Company-Only the Managing Director was authorized to do
D certain acts on behalf of the Company-Thus statutory requirements under
'
section 141 not being satisfied, complaint against the DirectOr not
"-(
maintainable.

Respondent No. 1 Director ofa Company resigned on 15.04.1994. The
Company represented by its Managing Director issued cheques to the
E appellant company Dn 19.08.1996 for certain amount towards discharge of
its liability. The cheque was dishonoured for insufficient funds upon
presentation. Appellant issued notice to the company and its Directors.
Appellant filed a complaint petition against the Company, the Managing
Director, Respondent No. I and another Director alleging that its Directors
are actively involved in the Managment of the affairs of the Company as evident >
F
from the resolution dated 15.02.1995. Respondent no. I filed a petition for
discharge which was dismissed. Revision petition was also dismissed.
Application under section 482 Cr.P.C. was filed and the same was permitted
to be withdrawn. Another discharge application was filed and the same was
dismissed. Thereafter, application was filed for quashing of the criminal
G proceedings. High Court held that the ali·:gations in the complaint petition
against respondent No. I were vague and indefinite and did not satisfy the
>,...
requirements of section 141 of the Negotiable Instruments Act, 1881; and
thus, quashed the complaint against respondent no. I Hence the present appeal.

Division Bench of this Court referred the question with regard to the
H 862
S.M.S. PHARMACEUTICALS LTD. v. NEET A BHALLA 863
requirements of law for proceedings against the Directors of the Company A
for their purported constructive liability to the three Judge Bench of this
Court. Three Judge Bench answered the reference and referred the matter to
the Division Bench for determination on merit.

Dismissing the appeal, the Court
B
HELD: 1.1. Section 141 of the Negotiable Instruments Act, 1881 does
not say that a Director of a Company shall automatically be vicariously liable
for commission of an offence on behalf of the Company. What is necessary is
that sufficient averments should be made to show that the person who is sought
to be proceeded against on the premise of his being vicariously liable for C
commission of an offence by the Company must be incharge and shall also be
responsible to the Company for the conduct of its business. By reason of the
provision, a legal fiction has been created. (Paras 16 and 171 (869-E-F)

1.2. The liability of a Director must be determined on the date on which
the offence is committed. Only because respondent No. 1 was a party to a D
purported resolution dated 15.02.1995 by itself does not lead to an inference
that she was actively associated with the management of the affairs of the
Company. This Court in this case has categorically held that there may be a
)
large number of Directors but some of them may not associate themselves in
the mangement of the day to day affairs of the Company and, thus are not E
responsible for conduct of the business of the company. The averments must
state that the person who is vicariously liable for commission of the offence
of the Company both was iitcharge of and was responsible for the conduct of
the business of the Company. Requitrements laid down therein must be read
conjointly and not disjunctively. When a legal fiction is raised, the ingredients
therefor must be satisfied. [Para 20) (871-B-D) F

1.3. If the complaint petition is read in its entirety, the same would show
that the only person who actively associated in the matter of obtaining loan,
signing cheques and other affairs of the company which would lead to
commission of the alleged offence was the Managing Director. By reason of G
the purported resolution dated 15.02.1995 only the Managing Director was
authorized to do certain acts on behalf of the Company. The cheques were
issued on 15.08.1996, i.e., after a period of 17 months from the date of the
~aid resolution. As is evident from the averments made in the complaint
petition, the cheques represented the amount of interest payable on the amount
deposited. (Para 21) (871-E-G) H
864 SUPREME COURT REPORTS [2007] 2 S.C.R.

A , 1.4. On a Plain reading of the averments made in the complaint petition.
it i~ satisfied that the statutory requirements as contemplated under section --+
141 of the Act were not satisfied. Therefore, the judgment of the High Court
cannot be faulted. [Para 23] [872-Aj

· S.MS. Pharmaceuticals Ltd v. Neeta Bhalla & Anr., [2005] 8 SCC 89;
B K.P.G. Nair v. Jindal Menthol India Ltd., [2001] 10 sec 218; Monaben
Ketanbhai Shah and Anr. v. State of Gujarat and Ors., [2004] 7 SCC 15;
Sabitha Ramamurthy and Anr. v. R.B.S. Channabasavaradhya, (2006) 9
SCALE 212 and Saroj Kumar Poddar v. State (NCT of Delhi) and Anr., (2007)
2 SCALE 36, referred to.
c 2. With regard to the maintainabilityof the second application such a
question had not been raisd before the High Court Even otherwise, the High
Con rt was not denuded from exercising its inherent jurisdiction in a matter
of this nature. The principles of res judicata are not attracted. In the previous
order b)' the High Court, it gave liberty to Respondent No. 1 to agitate the
D matter once. Respondent No.1 merely took recourse thereto. In the case, not
only the merit of the matter had been gone into by the High Court as also by
this Court, the questions raised in the petition had been referred to a larger .<
Bench for obtaining an authoritative pronouncement. Therefore, it is too late
in the day for the appellant to contend that the application under Section 482
E Cr.P.C. was not maintainable. [Paras 28, 29 and 31] [873-D-E; 874-A-D-E]

, Simrikhia v. Dolley Mukerherjee and Chhabi Mukerjee and Anr.,,(1990]
2 SCC 437 and Rajinder Prasad v. Bashir and Ors., [2001] 8 SCC 533,
distinguished.

F Superintendent and Remembrancer of Legal Affairs, West Bengal v.
.~

Mohan Singh and Ors., [1975] 3 SCC, referred to.

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 664 of
2002.

G From the final Judgment and Order dated 13.12.2001 of the High Court
of Judicature, Andhra Pradesh at Hyderabad in Cr!. P. No. 3795/2000.

P.S. Mishra, Uday Umesh Lalit, S. Chandra Shekhar, Thatghat .;.,.....
Harshvardhan, Upendra Mishra, Dhruv Kumar Jha, Ravi Chandra Prakash,
Arvind Kumar, Mahesh Agarwal, Rishi Agrawal and Gaurav Goel for the
H
S.M.S. PHARMACEUTICALS LTD. v.-NEETA BHALLA [S.B. SINHA . .l.]865

Appellant. A
Ranjit Kumar, Meenakshi Arora, Poli Kataki, Suvrajyati Gupta, Guntur
Prabhakar and Rajesh Srivastava for the Respondents.

The Judgment of the Court was delivered by
B
S.B. SINHA, J. I. Appellant herein is a company registered and
incorporated under the Companies Act. Respondent No. I was a Director of
a company known as M/s. Direct Finance and Investment Ltd., New Delhi.
She allegedly submitted her resignation on 15 .04.1994.

2. Against the said company, the Managing Director thereof, Respondent C
No. I herein as also another director, a complaint petition was filed by the
appellant alleging that the Company represented by its Managing Director
had called for inter-corporate deposit for a short period of 15 days to the
extent of rupees two crores and to such a proposal it agreed. The rate of
interest for such deposit was stipulated at 25% per annum therefor payable D
within 15 days. A promissory note was executed by the accused No. 2 on
behalf of the Company. The date of maturity of the said deposit was fixed on
r 15.03.1995. Upon expiry of the period of deposit, the accused Company
; represented by its Managing Director allegedly issued a cheque for a sum of
rupees two crores as also a cheque for a sum of Rs. 1,58,219.00 and another
cheque for a sum of Rs. 8,33,334.00 drawn on Canara Bank, Janpath, New E
Delhi. All the cheques were dated 15.08.1996. The cheques for Rs. 8,33,334.00
and Rs. 1,58,219.00 represented the interest part on the deposit of rupees two
crores for 15 days. The said cheques upon presentation were dishonoured on
the ground of insufficient funds. It stands accepted that a notice dated
21.09.1996 was issued by th.e appellant asking the accused No. I Company
to pay the said sum. The said notice was served upon the accused Nos. 2 F
and 3, viz., the Managing Director and another Director of the Company.
Respondent No.· I who was arrayed as the accused No. 4 in the complaint
petition was however not served with any notice. The address of Respondent
No. I herein accused No. 4 was shown as the Director of the Company being
resident of 353, Bhera Enclave, Outer Ring Road, Delhi 110 041. We may, G
however, notice that in the complaint petition her address had been shown
to be Outer Ring Road, Paschim Vihar, Delhi 110 041.

3. In the complaint petition the allegations made inter alia are as under:

"The Accused No. I is a duly incorporated Company, having its H
866 SUPREME COURT REPORTS [2007] 2 S.C.R.

A registered office at the address mentioned above, represented by the
Director, Accused no. 2. The accused No. 3 and 4 are also the Directors
of the Accused No. l company and the accused 2 to 4 are actively
involved in the management of the affairs of the Accused No. I
Company."

B 4. Appellant along with the said complaint petition annexed a purported
resolution dated 15.02.1995 authorizing the Managing Director of the Company
to execute the promissory note which reads as under:

"RESOLVED THAT the Company to avail an Inter Corporate Deposit
of Rs. 2 Crores (Rupees Two Crores Only) for 15 days@25% p.a. from
c Reddy Nagar, Hyderabad and that Mr. Rajiv Anand, Director be and
, is hereby authorized to sign and execute Demand Promissory Note,
, Post Dated Cheques and other documents as may be required by
Mis. SMS Pharmaceuticals Ltd. on behalf of the Company and deliver
the same to Mis. SMS Pharmaceuticals Ltd.
D RESOVED FURTHER THAT Mr. Rajiv Anand, Director of the Company
be and is hereby authorized to affix common seal of the Company on
. such documents and papers as may be required in this connection '<
pursuant to the Articles of Association of the Company."

E 5. In the said proceedings, a petition for discharge was filed by
Respondent No. I which was rejected by the learned Trial Judge. A revision
petition filed thereagainst was also dismissed by the learned Sessions Judge.
An application under Section 482 of the Code of Criminal Procedure was filed
questioning the said orders which, however, was permitted to be withdrawn
by the High Court stating:
F
"The learned counsel for the petitioner seeks leave of the Court to
withdraw this application. The same shall accordingly stand dismissed
as withdrawn.

Leave granted to the petitioner to avail the remedies if any available
G to him in law.

The trial Comt shall expeditiously dispose of the matter in accordance
with law. The Trial Court is directed not to grant any unreasonable ::-,..,
adjournments to any of the parties to the proceedings."

6. Another discharge application was filed which was dismissed on
H
y

S.M.S. PHARMACEUTICALS LTD. v. NEETA BHALLA [S.B. SINHA, J.]867

- +- 03.08.2000. The application for quashing of the proceeding was filed thereafter. A
7. The High Court by reason of the impugned judgment opining that the
allegations contained in the complaint petition as against Respondent No. I
are vague and indefinite and do not satisfy the requirements of law as
contained in Section 141 of the Negotiable Instruments Act (for short "the
Act"), held that no case had been made out for issuance of any summons B
against her. As regards the contention raised by the appellant herein that the
involvement of Respondent No. 1 in the affairs of the Company is evident
.,,.. from the resolution dated 15.02.1995, the High Court opined that the same by
itself did not disclose commission of any offence on the day of commission
of the offence.
c
8. Appellant has filed the appeal aggrieved by the said judgment.

9. Requirements of law for proceeding against the Directors of the
Company for their purported constructive liability came up for consideration
in this case before a Division Bench of this Court, wherein the following
D
questions were posed:
}·
"(a) Whether for purposes of Section 141 of the Negotiable Instruments
'
J Act, 1881, it is sufficient if the substance of the allegation read as a
whole fulfil the requirements of the said section and it is not necessary
to specifically state in the complaint that the person accused was in E
charge of, or responsible for, the conduct of the business of the
company.

(b) Whether a director of a company would be deemed to be in charge
of, and responsible to, the company for conduct of the business of
-~ the company and, therefore, deemed to be guilty of the offence unless F
I he proves to the contrary.

(c) Even if it is held that specific averments are necessary, whether in
the absence of such averments the signatory of the cheque and or the
managing directors or joint managing director who admittedly would
be in charge of the company and responsible to the company for G
conduct of its business could be proceeded against."
.__,..
10. Having regard to the importance of the questions, the matter was
referred to a 3-Judge Bench of this Court. Upon noticing the rival contentions
of the parties as also the precedents operating in the field, the questions were
H
x
868 SUPREME COURT REPORTS [2007] 2 S.C.R.

A answered by the larger bench in the following terms:
-+
-
. "19. In view of the above discussion, our answers to the questions

B
posed in the reference are as under:

(a) It is necessary to specifically aver in a complaint under Section 14 I
that at the time the offence was committed, the person accused was
-
. in charge of, and responsible for the conduct of business of the
company. This averment is an essential requirement of Section 141
and has to be made in a complaint. Without this averment being made
in a complaint, the requirements of Section 141 cannot be said to be
satisfied. ""
c
(b) The answer to the question posed in sub-para (b) has to be in the
negative. Merely being a director of a company is not sufficient to
make the person 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
D 141 is that the person sought to be made liable should be in chilrge
of and responsible for the conduct of the business of the company
at the relevant time. This has to be averred as a fact as there is no --{

deemed liability of a director in such cases.

(c) The answer to Question (c) has to be in the affirmative. The
E question notes that the managing director or joint managing director
would be a_dmittedly in charge of the company and responsible to the
company for the conduct of its business. When that is so, holders of
such positions in a company become liable under Section 141 of the
Act. By virtue of the office they hold as managing director or joint
F managing director, these persons are in charge of and responsible for
the conduct of business of the company. Therefore, they get covered
under Section 141. So far as the signatory of a cheque which is
dishonoured is concerned, he is clearly responsible for the incriminating
act and will be covered under sub-section (2) of Section 141."

G 1I. The Bench, however, referred the matter back to the Division Bench
for determination on merit. The matter is, thus, before us.

12. Mr. P.S. Mishra, learned senior counsel appearing on behalf of the
appellant, would submit that the averments made in paragraph 2 of the
complaint petition are sufficient to attract the provisions of Section 141 of the
H
'---:i-

S.M.S. PHARMACEUTICALS LTD. v. NEETA BHALLA (S.B. SINHA, .1.] 869

-
.J
·r
Act inasmuch as the involvement of Respondent No. 1 insofar as the
management of the affairs of the Company is concerned is evident from the
A

documents appended to the complaint petition.

13. The learned counsel brought to our notice that the well-settled
principle oflaw that for the purpose of attracting the provisions of Section
141 of the Act, it is not necessary to reproduce the exact wordings of the B
statute and submitted that the involvement of an accused as a Director of a
Company being incharge of or responsible to the conduct of the Company
must be gathered from the other averments made in the complaint petition as
"f
also the documents appended thereto.

14. It was submitted that for the said purpose, the term "management" c
should be given its ordinary or dictionary meaning which would include the
act or manner of managing, controlling or conducting.

15. Mr. Ranjit Kumar, learned senior counsel appearing on behalf of
Respondent No. 1, on the other hand submitted that no allegation has been D
made as against Respondent No. 1 herein in the complaint petition which
satisfies the requirements of Section 141 of the Act but as would appear from
)"
the facts of the case that she had no role to play in commission of the offence
at all.
' 16. Section 141 of the Act does not say that a Director of a Company E
shall automatically be vicariously liable for commission of an offence on
behalf of the Company. What is necessary is that sufficient averments should
be made to show that the person who is sought to be proceeded against on
the premise of his being vicariously liable for commission of an offence by
the Company must be incharge and shall also be responsible to the Company
~ for the conduct of its business. F

17. By reason of the said provision, a legal fiction has been created. The
larger Bench in this case [since reported in (2005) 8 SCC 89] categorically held:

"11. A reference to sub-section (2) of Section 141 fortifies the above
reasoning because sub-section (2) envisages direct involvement of G
any director, manager, secretary or other officer of a company in the
_-1, commission of an offence. This section operates when in a trial it is
proved that the offence has been committed with the consent or
connivance or is attributable to neglect on the part of any of the

- holders of these offices in a company. In such a case, such persons H
y
870 SUPREME COURT REPORTS [2007] 2 S.C.R.

A are to be held liable. Provision has been made for directors, managers,
....
·'-
secretaries and other officers of a company to cover them in cases of -t·
their proved involvement.

12. The conclusion is inevitable that the liability arises on account of
conduct, act or omission on the part of a person and not merely on
B account of holding an office or a position in a company. Therefore,
in order to bring a case within Section 141 of the Act the complaint
must disclose the necessary facts which make a person liable."

18. Referring to this Court's earlier decisions in K.P. G. Nair v. Jindal ··r
Menthol India Ltd., [2001] 10 SCC 218 and Monaben Ketanbhai Shah and
c Anr. V. Stqte of Gujarat and Ors., [2004] 7 sec 15, it was stated:

"18. To sum up, there is almost unanimous judicial opinion that
necessary averments ought to be contained in a complaint before a
person can be subjected to criminal process. A liability under Section
141 of the Act is sought to be fastened vicariously on a person
D connected with a company, the principal accused being the company
itself. It is a departure from the rule in criminal law against vicarious
liability. A clear case should be spelled out in the complaint against
.,
the person sought to be made liable. Section 141 of the Act contains
the requirements for making a person liable under the said provision. '·
E 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
F 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."
G 19. In terms of Section 138 of the Act, a complaint petition alleging an
offence thereto must demonstrate that the following ingredients exist that:
,-.,_..
(i) a cheque was issued;

H
(ii) the same was presented;
-
S.M.S. PHARMACEUTICALS LTD. v. NEETA BHALLA [S.B. SINHA, J.] 871

..... ·-r (iii) but, it was dishonoured; A
(iv) a notice in tenns of the said provision was served on the person
sought to be made liable; and
(v) despite service of notice, neither any payment was made nor
other obligations, if any, were complied with within fifteen days
from the date of receipt of the notice. B
20. The liability of a Director must be determined on the date on which
- -.{ the offence is committed. Only because Respondent No. 1 herein was a party
to a purported resolution dated 15.02.1995 by itself does not lead to an
inference that she was actively associated with the management of the affairs
of the Company. This Court in this case has categorically held that there may c
be a large number of Directors but some of them may not associate themselves
./
in the management of the day to day affairs of the Company and, thus, are
not responsible for conduct of the business of the Company. The avennents
must state that the person who is vicariously liable for commission of the
offence of the Company both was incharge of and was responsible for the D
conduct of the business of the Company. Requirements laid down therein
r must be read conjointly and not disjunctively. When a legal fiction is raised,
) the ingredients therefor must be satisfied.

21. If the complaint petition is read in its entirety, the same would show
that the only person who was actively associated in the matter of obtaining E
loan, signing cheques and other affairs of the company which would lead to
commission of the alleged offence was the accused No. 2. By reason of the
purported resolution dated 15.02.1995, whereupon strong reliance has been
placed by Mr. Mishra, only the accused No. 2 was authorized to do certain
-'\ acts on behalf of the Company. The cheques were issued on 15.08.1996, i.e.,
) F
after a period of 17 months from the date of the said resolution. As is evident
from the averments made in the complaint petition, the cheques represented
the amount of interest payable for a total period of 15 days only calculated
at the rate of 25% per annum on the amount of deposit, viz., rupees two
crores.
G
22. The High Court has gone into the matter at some length. The High
_,,.. Court found that the resolution by itself did not constitute an offence even
assuming that the same bore the signature of Respondent No. 1 (although the

- genuineness thereof was disputed).

H
x_,,
\

872 SUPREME COURT REPORTS [2007) 2 S.C.R.

A 23. On a plain reading of the averments made in the complaint petition, --t-
we are satisfied that the statutory requirements as contemplated under Section
141 of the Act were not satisfied.

24. This aspect of the matter has recently been considered by this Court
in Sabitha Ramamurthy & Anr. v. R.B.S. Channabasavaradhya, (2006) 9
B SCALE 212, wherein it was held:

"A bare perusal of the complaint petitions demonstrates that the
statutory requirements contained in Section 141 of the Negotiable r
Instruments Act had not been complied with. It may be true that it is
not necessary for the complainant to specifically reproduce the
c wordings of the section but what is required is a clear statement of
fact so as to enable the court to arrive at a prima facie opinion that
the accused are vicariously liable. Section I4 I raises a legal fiction.
By reason of the said provision, a person although is not personally
liable for commission of such an offence would be vicariously liable
D therefor. Such vicarious liability can be inferred so far as a company
registered or incorporated under the Companies Act, 1956 is concerned
'(
only if the requisite statements, which are required to be averred in
the complaint petition, are made so as to make the accused therein
vicariously liable for the offence committed by the company. Before
a person can be made vicariously liable, strict compliance of the ~-

E statutory requirements would be insisted ... "

25. Yet again in Saro) Kumar Poddar v. State (NCT ofDelhi) and Anr.,
(2007) 2 SCALE 36, the said legal principle was reiterated stating:

"Apart from the Company and the appellant, as noticed ;>·
F hereinbefore, the Managing Director and all other Directors were also
made accused. The appellant did not issue any cheque. He, as noticed
hereinbefore, had resigned from the Directorship of the Company. It
may be true that as to exactly on what date the said resignation was
accepted by the Company is not known, but, even otherwise, there
is no averment in the complaint petitions as to how and in what
G manner the appellant was responsible for the conduct of the business
of the Company or otherwise responsible to it in regard to its ...__
functioning. He had not issued any cheque. How he is responsible for

-
dishonour of the cheque has not been stated. The allegations made
in paragraph 3, thus, in our opinion do not satisfy the requirements
H
·y
)

S.M.S. PHARMACEUTICALS LTD. v. NEETA BHALLA (S.B. SINHA, J.] 873
...
..... -r of Section 141 of the Act." A
26. A faint suggestion was made that this Court in Saroj Kumar Poddar
(supra) has laid down the law that the complaint petition not only must
contain averments satisfying the requirements of Section 141 of the Act but
must also show as to how and in what manner the appellant was responsible
for the conduct of the business of the company or otherwise responsible to B
it in regard to its functioning. A plain reading of the said judgment would
show that no such general law was laid down therein. The observations were
'{ made in the context of the said case as it was dealing with a contention that
although no direct averment was made as against the appellant of the said
case fulfilling the requirements of Section 141 of the Act but there were other
averments which would show that the appellant therein was liable therefor.
c
27. We, therefore, are of the opinion that the judgment of the High Court
cannot be faulted.

28. Another submission of Mr. Mishra was that the second application
D
was not maintainable. Such a question had not been raised before the High
I Court. Even otherwise, the High Court was not denuded from exercising its
inherent jurisdiction in a matter of this nature. The principles of res judicata
j
are not attracted. Reliance placed by Mr. Mishra on Simrikhia v. Dolley
Mukherjee and Chhabi Mukherjee and Anr., [1990] 2 SCC 437 is misplaced.
The question which arose for consideration therein was as to whether despite E
dismissal of an earlier application a second application would be maintainable
which would virtually amount to review of the earlier order which would be
contrary to the spirit of Section 362 of the Code of Criminal Procedure. It was
held:
,
---...
; "7. The inherent jurisdiction of the High Court cannot be invoked to F
override bar of review under Section 362. It is clearly stated in Sooraj
Devi v. Pyare Lal, that the inherent power of the court cannot be
exercised for doing that which is specifically prohibited by the Code.
The law is therefore clear that the inherent power cannot be exercised
for doing that which cannot be done on account of the bar under
G
other provisions of the Code. The court is not empowered to review
__,,. its own decision under the purported exercise of inherent power. We
find that the impugned order in this case is in effect one reviewing
the earlier order on a reconsideration of the same materials. The High
Court has grievously erred in doing so. Even on merits, we do not find
any compelling reasons to quash the proceedings at that stage." H
x: !.

874 SUPREME COURT REPORTS [2007] 2 S.C.R.

A 29. We have noticed the previous order passed by the High Court. The
High Court gave liberty to Respondent No. I to agitate the matter once again.
---r "-

Respondent No. 1 merely took recourse thereto. Equally misplaced is the
judgment of this Court in Rajinder Prasad v. Bashir and Ors., [2001] 8 SCC
522. Although therein it was held that when an earlier revision application
under Section 397 of the Code of Criminal Procedure bas been dismissed, as
B not pressed, a second application under Section 482 thereof for grant of same
relief should not have been entertained, this Court opined:

"8. We are of the opinion that no special circumstances were spelt out 'y

in the subsequent application for invoking the jurisdiction of the High
Court under Section 482 of the Code and the impugned order is liable
c to be set aside on this ground alone."

30. It is, therefore, r'l authority for the proposition that the High Court
is not completely denuded of its power to exercise inherent jurisdiction for
the second time.
D 31. Furthennore. this court therein also went into the merit of the matter.
In this case, not only the merit of the matter had been gone into by the High -.,,
Court as also by this Court, the questions raised in the petition had been
referred to a larger Bench for obtaining an authoritative pronouncement. It is,
therefore, too late in the day for the appellant to contend that the application
E under Section 482 of the Code of Criminal Procedure was not maintainable.
32. We may, however, notice that this Court in Superintendent and
Remembrancer of Legal Affairs, West Bengal v. Mohan Singh and Ors., [1975]
3 sec 706 held that when there is a changed set of circumstances, a second
application under Section 56 IA of the Code of Criminal Procedure would be
F maintainable stating: >-
I

"2. The main question debated before us was whether the High Court
had jurisdiction to make the order dated April 7, 1970 quashing the
proceeding against Respondents I, 2 and 3 when on an earlier
application made by the first respondent, the High Court had by its
G order dated December 12, 1968 refused to quash the proceeding. Mr
Chatterjee on behalf of the State strenuously contended that the High
Court was not competent to entertain the subsequent application of
Respondents 1 and 2 and make the order dated April 7, 1970 quashing
the proceeding, because that was tantamount to a review of its earlier
H order by the High Court, which was outside the jurisdiction of the
S.M.S. PHARMACEUTICALS LTD. v. NEETA BHALLA [S.B. SINHA, J.) 875

High Court to do. He relied on two decisions of the Punjab and Orissa A

- +- High Courts in support of his contention, namely, Hoshiar Singh v.
State and Namdeo Sindhi v. Stale. But we fail to see how these
decisions can be of any help to him in his contention. They deal with
a situation where an attempt was made to persuade the High Court
in exercise of its revisional jurisdiction to reopen an earlier order
passed by it in appeal or in revision finally disposing of a criminal B
proceeding and it was held that the High Court had no jurisdiction to
revise its earlier order, because the power of revision could be exercised
only against an order of a subordinate court. Mr Chatterjee also relied
---.( on a decisiol). of this Court in U.J.S. Chopra v. State of Bombay where
N.H. Bhagwati, J., speaking on behalf of himself and Imam, J., observed c
that once a judgment has been pronounced by the High Court either
in exercise of its appellate or its revisional jurisdiction, no review or
revision can be entertained against that judgment and there is no
provision in the Criminal Procedure Code which would enable the
High Court to review the same or to exercise revisional jurisdiction
over the same. These observations were sought to be explained by D
~ Mr Mukherjee onI behalf of the first respondent .
by saying that they
·r- should not be read as laying down any general proposition excluding
the applicability of Section 561-A in respect of an order made by the
j
High Court in exercise of its appellate or revisional jurisdiction even
if the conditions attracting the applicability of that section were satisfied E
in respect of such order, because that was not the question before the
Court in that case and the Court was not concerned to inquire whether
the High Court can in exercise of its inherent power under Section 5
61 A review an earlier order made by it in exercise of its appellate or
revisional jurisdiction ... "
F
~
33. For the reasons aforementioned, we do not find any error whatsoever
;
in the impugned judgment. The appeal is dismissed with costs. Counsel's fee
assessed at Rs. I0,000/-.

N.J. Appeal dismissed.
G