ORDER M.R. Verma, J.

1. This appeal has been preferred by the appellant/complainant (hereafter referred to as 'the appellant') against the judgment dated 12.12.1997 passed by the learned Judicial Magistrate (III), Shimla whereby the respondent/accused (hereinafter referred to as 'the respondent') has been acquitted of the accusation under Section 138 of the Negotiable Instruments Act.

2. The case of the appellant against the respondent is that the respondent raised a loan of Rs. 50,000/- from the appellant. For repayment of the loan she issued cheque No. 064558 dated 3.5.1995 drawn on Central Bank of India, Shimla. On presentation for encashment, the cheque was received back by the appellant on 20.5.1995 with the remarks "Insufficient funds" with the result that the cheque could not be encashed. The appellant thereupon issued a registered notice dated 3.5.1995 with a copy sent under the Certificate of Posting to the respondent requesting her to make the payment within fifteen days of the receipt of such notice. The notice sent through Registered Post was received back by the appellant as 'unclaimed' but the copy of the notice sent through U.P.C. was duly served on the respondent. However, the respondent failed to make the payment within the prescribed period. The appellant, therefore, filed a complaint against the respondent wherein she was tried on the accusations under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the Act'). On consideration of evidence brought on record, the learned trial Magistrate acquitted the respondent by the impugned judgment on the ground that the firm of which the respondent was a partner and for which she acted as a partner, was not made a party-accused in the complaint and there is no allegation that the respondent at the material time was in charge of and responsible for the conduct of the business of the firm, this appeal by the appellant.

3. I have heard the learned Counsels for the parties and have also gone through the records.

4. There is no cogent and reliable evidence on record to prove that the liability to pay the amount of the cheque Ext. PW-1/A was individual and personal liability of the respondent. It is apparent from a bare perusal of the cheque Ext. PW-1/A and is not disputed that this cheque has been signed by the respondent for Vijay Emporium as a partner. The appellant (PW 1) in his cross-examination has admitted that when the cheque Ext. PW 1/A was delivered to him, he had noticed that the cheque had been issued by the firm Vijay Emporium and the respondent had informed him that she was a partner of the said firm. A perusal of the complaint reveals that the said firm has been made a party-accused in the complaint. Thus, for all intents and purposes, the cheque has been issued by and on behalf of firm Vijay Emporium. In the given circumstances, particularly in the absence of any allegation in the complaint that the respondent was in charge of and responsible to the firm for the conduct of the business of the firm at the time of issue of the cheque and the question of maintainability of the complaint against the respondent without impleading the drawer of the cheque, i.e. Firm Vijay Emporium, necessarily arises for determination.

5. Sub-section (1) of Section 141 of the Act reads as follows:

"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:

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

6. On a bare reading of the aforesaid provision, it is clear that when the drawer of the cheque is a company, the company and every person in charge of the company are liable for the offence. Such person may be Director, Manager, Secretary or other Officer of the company but by virtue of the aforesaid provisions the company and such person(s) are deemed to be liable to be proceeded against and punished unless such person(s) proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent commission of such offence. Since a company/firm is an artificial person, it cannot by itself commit any offence personally but if the offence is committed by its Partners/Officials/Directors, it is the company/firm who has committed the offence. Therefore, when the offence is committed by a Company/Firm, a Director/Officer/Partner who is not shown to be in charge of and responsible to the Company/Firm for the conduct of the business of the Company/Firm cannot be prosecuted without impleading the Company/Firm as an accused.

7. In U.P. Pollution Control Board v. Modi Distillery, AIR 1988 SC 1128, a question arose whether the Chairman, Vice-Chairman and Members of the Board of the Directors are liable to be proceeded against under Section 47 of the Water (Prevention and Control of Pollution) Act in the absence of prosecution of the Company owning the offending industrial unit. The High Court quashed the proceedings launched against the Chairman, Vice-Chairman, etc., etc. of the Company on the ground that there could be no vicarious liability of the Chairman, etc. unless the company was prosecuted. Since the company was not made a party accused, therefore, the proceedings against the Chairman, etc. of the Company were quashed. The matter went up in appeal before the Hon'ble Supreme Court. Though the order of the High Court quashing the proceedings was set aside on the ground that instead of company a unit thereof was arrayed as a party that too because of the lapses on the part of the company, therefore, the necessary correction by adding the company as the accused could be directed to be made and the proceedings could not be quashed. Regarding impleadment of the company as an accused in view of the provisions of Section 47 of the Water (Prevention and Control of Pollution) Act which are almost similar to the provisions of Section 141 of the Act, the Hon'ble Supreme Court held as under (para 6):

"Although as a pure proposition of law in the abstract the learned Single Judge's view that there can be no vicarious liability of the Chairman, Vice-Chairman, Managing Director and Members of the Board of Directors under Sub-section (1) or (2) of Section 47 of the Act unless there was a prosecution against Messrs Modi Industries Limited, the company owning the industrial unit. Can be termed as correct, the objection raised by the petitioners before the High Court ought to have been viewed not in isolation but in the conspectus of facts and events and not in vacuum. We have already pointed out that the technical flaw in the complaint is attributable to the failure of the industrial unit to furnish the requisite information called for by the Board. Furthermore, the legal infirmity is of such a nature which could be easily cured."

8. It is, thus, evident that the liability of the Directors, Officers, etc. is vicarious and will flow from the liability of the company/firm, therefore, the company/firm, which has committed the offence, has essentially to be impleaded as a party accused in the complaint otherwise the complaint will be rendered defective and liable to be dismissed.

9. Following the ratio of U.P. Pollution Control Board's case (supra), Madras High Court in S. Krishnamoorthy v. B.S. Kesavan, II (1995) BC 265, held as under:

"On a plain reading of Section 14(1), it would be clear that when the offence was committed by the Company, the person responsible alone cannot be prosecuted, leaving out the company. When the offence is committed by a firm, the partner of the firm cannot be prosecuted, leaving out the firm."

In Dilip Kumar Jaiswal v. Debapriya Banerjee, I (1992) BC 403=( 1992) 73 Comp. Cas. 434 (Cal.), a cheque signed by the Managing Director of the company, which was the subject matter of an offence under Section 138 of the Act, came up for consideration. It was held that the cheque signed by the Managing Director was issued by him for the Company, as Director and, therefore, the liability to make the payment being that of the company; the company was the drawer of the cheque. In Krishna Bai v. Arti Press, (1994) 80 Comp. Cas. 750 (Madras), the impugned cheque was issued by Mudra Graphics P. Ltd. of which the accused in that case was the Managing Director. The complaint was laid against the Managing Director, Krishna Bai, alone. Mudra Graphics P. Ltd. was not arrayed as an accused. On that ground, the complaint was challenged. Justice Padmini Jesudurai had held as follows:

" 'Unless the company if an accused, the person who is in charge of and responsible to the Company for the conduct of the business of the Company, cannot be made an accused. This is the settled position of law reiterated by the Supreme Court in U.P. Pollution Control Board v. Modi Distillery, AIR 1988 SC 1128, where a complaint against the Chairman, Vice-Chairman, Managing Director and Members of the Board of Directors of the Company and the unit of the company but without the company was quashed by the High Court on the ground that there could be no vicarious liability on the Chairman and others, unless there was a prosecution of the Company and the Supreme Court upheld that part of the legal finding but on the facts of that case, remitted the matter to the Trial Court to give a direction to the complainant to make a formal amendment of the complaint to make the company also as an accused. In the instant case, the offence is committed by Mudra Graphics P. Ltd. which is not an accused in this case. In such circumstances there can be no prosecution of the Managing Director, when the Company is not prosecuted.' In the instant case before me, that debt due was by the firm. The cheque was issued by the firm. No doubt the petitioner, as partner, had signed the agreement as well as the cheque. Inasmuch as the offence was committed by the firm, without the firm being arrayed as an accused, the petitioner alone cannot be arrayed as an accused and be proceeded against. In view of non-compliance with Section 141 of the Act, all these complaints are liable to be quashed. Though Mr. T.K. Sampath had put forth other submissions also, since I feel that it is, unnecessary to consider the other submissions, I am not considering the same."

10. In view of the above position in law there remains no doubt that the cheque in question having been issued by the firm and thus being the drawer of the cheque, the non-impleading of the firm will render the complaint defective and incompetent to prosecute the partner thereof and the learned trial Magistrate has rightly taken such a view.

11. There is yet another aspect of the matter. The respondent has been named as an accused in the complaint in her personal capacity. There is no averment or allegation against the respondent in her capacity as a partner of the firm who is the drawer of the cheque. In view of the provisions of Section 141 of the Act, it is clear that liability can be fastened on the Director/Partner of the company/firm provided that it is averred and proved that the person arrayed as an accused as Director/Partner was at the time of the commission of the offence incharge of and was responsible to the company for the conduct of the business of the company. Unless it is averred and proved the Director/Partner cannot be deemed to be guilty of the offence.

12. In State of Himachal Pradesh v. R.L. Jhamb and Ors., Cr.M.M.O. No. 23 of 1999 decided on 9.9.1999, while dealing with the provisions of Section 34 of the Drugs and Cosmetics Act, 1940, which are almost similar to those of Section 141 of the Act, this Court held as under:

"Thus, in view of the aforesaid proposition of taw laid down by the Apex Court, the respondents could not have been ordered to be proceeded against for the commission of the offence punishable under Section 18(a)(i) read with Section 29(d) of the Act unless it was specifically averred in the complaint that, at the relevant time, the respondents were in charge of and responsible to M/s. Wellcross India Pvt. Ltd. for the conduct of its business and their being Directors of the said company does not necessarily means that they were in charge of and responsible to the company for the conduct of its business. Thus, the learned Additional Sessions Judge has rightly concluded that there were no allegations in the complaint against the respondents to make them even prima facie liable for being prosecuted."

13. In Sonia Bhalla (Mrs.) v. Rajneesh Aggarwal, III (2002) BC 216=111 (2002) CCR 274=(2002) 1 Cur. LJ 399, a learned Single Judge of this Court whiledealing with the similar situation held as under:

"18. It is thus well settled that the vicarious liability of a person for being prosecuted of commission of an offence by a company arises only if at the time when the offence is alleged to have been committed, he was in charge of and was responsible to the company for the conduct of its business. It is necessary that there must be averments in the complaint that such person was in charge of and was also responsible to the company for the conduct of business of the company, or that the offence was committed by the company with his consent or connivance, or is attributable to any neglect on his part. If there is no such averment, there should be other material available before the Magistrate to indicate that such person was in charge of and was responsible to the company for the conduct of its business."

14. In view of the above settled position and there being no allegation that the respondent was in charge of and responsible to the company i.e. the drawer of the cheque for the conduct of its business she could not be held vicariously liable and the learned trial Magistrate has rightly concluded so.

15. It is also pertinent to point out here that before a prosecution can be lawfully launched under Section 138 of the Act, the payee/holder in due course of the cheque which on presentation for payment remained unpaid, has to serve a written notice on the drawer of the cheque demanding payment of the amount. The payee can prosecute the drawer of the cheque only if the amount is not paid within fifteen days of the receipt of such notice.

16. In the case in hand, admittedly, no written demand notice had been served on the firm Vijay Emporium which is the drawer of the cheque in dispute. Therefore, the complaint against the respondent is liable to be dismissed for want of compliance of the provisions of Clauses (b) and (c) of the proviso to Section 138 of the Act.

17. In view of the above discussion and conclusions, the impugned order of acquittal does not suffer from any infirmity or illegality and does not call for any interference.

18. As a result, this appeal is dismissed.