Allowed

Mr L K Sunder Raman v. M/S Prime Pipes Fittings Pvt. Ltd.

Karnataka HC6 Jun 2024CRL.P/5184/2019

Case brief

AI extract

What is this about?

Cheque dishonour complaint filed only against a company officer without arraying the company as accused. The High Court held this violated Section 141 NI Act, vitiated the proceedings, quashed them and allowed the petition.

What did the court decide?

Proceedings in C.C.No.1044/2018 pending before the XXXIX A.C.M.M., Bengaluru, against the petitioner were quashed.

Mr L K Sunder Raman Vs M/S Prime Pipes Fittings Pvt. Ltd. — Cheque Dishonour | Karnataka HC (2024)

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1 - NC: 2024:KHC:19707 CRL.P No. 5184 of 2019

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 6^TH DAY OF JUNE, 2024

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BEFORE

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THE HON'BLE MR JUSTICE N S SANJAY GOWDA CRIMINAL PETITION NO. 5184 OF 2019

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BETWEEN:

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MR L K SUNDER RAMAN SON OF L.G.KRISHNAMURTHY, AGED ABOUT 53 YEARS, 200 FEET ROAD, KOLATHUR, CHENNAI-600 099.

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…PETITIONER (BY SRI. GOURAV GANAGAPTHY, AVOCATE FOR SRI. ANAND MUTTALLI, ADVOCATE)

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AND:

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Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA

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M/S PRIME PIPES FITTINGS PVT. LTD., REP. BY ITS MANAGING DIRECTOR, MR.J.L.DAGA, HAVING ITS HEAD OFFICE AT 2ND BLOCK, KORAMANGALA, SARJAPURA ROAD, C-2 DAGA ICON, KUDREMUKH COLONY, BENGLAURU 560034. REP. BY ITS POWER OF ATTORNEY HOLDER MR.GOVINDARAJU.

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(BY SRI. G.M.SHIVAKUMAR, ADVOCATE)

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…RESPONDENT

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THIS CRL.P IS FILED UNDER SECTION 482 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO QUASH THE COMPLAINT IN C.C.NO.1044/2018 PENDING ON THE FILE OF THE XXXIX A.C.M.M., AT BENGALURU, AGAINST THE PETITIONER.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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NC: 2024:KHC:19707 CRL.P No. 5184 of 2019

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ORDER

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A complaint was presented under Section 200 Cr.P.C. against the petitioner herein by the respondent for the offence punishable under Section 138 of the Negotiable Instruments Act (for short, “the Act”).

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The basic allegation in the complaint was that the petitioner had purchased UPVC pipes in the name of the company for a sum of Rs.30,81,000/- and towards discharge of liability, he had issued a post dated cheque bearing No.419396 drawn on the State Bank of India, Commercial Branch, Chennai and when the said cheque was presented for encashment, the same was dishonoured with an endorsement ‘Funds Insufficient’. The respondent thereafter issued a demand notice and when the same is not adhered to, he proceeded to present the complaint under Section 200 Cr.P.C.

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3 - NC: 2024:KHC:19707 CRL.P No. 5184 of 2019

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The Magistrate has taken cognizance of the said complaint and as a result of which, the petitioner is before this Court challenging the said proceedings.

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Learned counsel for the petitioner contends that the entire proceedings initiated against the petitioner are vitiated since admittedly even according to the complaint, the purchase of pipes was made on behalf of the company and the company had issued the cheque which is alleged to have been dishonoured. He contends that despite the legal requirement of arraying the company as an accused, the complaint and proceedings had been initiated only against the petitioner who was working in the company and therefore, he submits that the proceedings are liable to be quashed.

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Section 141 of the Act states that if the person committing an offence under Section 138 of the Act 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

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4 - NC: 2024:KHC:19707 CRL.P No. 5184 of 2019

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would have to be arrayed as an accused and more importantly, the company is also deemed to be guilty of offence and it is therefore clear that the company would also have to be arrayed as an accused and in the absence

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of arraying the company as an accused, the entire proceedings would stand vitiated.

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In this case, admittedly, the company is not arrayed as an accused and the proceedings have been initiated only against the officers of the company, which would be contrary to the requirement of Section 141 of Act. As a consequence, the proceedings cannot be sustained and the same is accordingly quashed.

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The petition is accordingly allowed.

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Sd/JUDGE

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PKS

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List No.: 1 Sl No.: 60

Mr L K Sunder Raman v. M/S Prime Pipes Fittings Pvt. Ltd.

Case brief

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Mr L K Sunder Raman v. M/S Prime Pipes Fittings Pvt. Ltd.

Case brief

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