Allowed

Mr Sijin Joseph v. M/S Raitha Seva Gramodyoga

Karnataka HC2 Mar 2026CRL.P/1738/2019

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed the criminal petition filed under Section 482 CrPC to quash CC No. 1367/2015. The Court held that prosecuting individual petitioners as officers of a company issuing a dishonoured cheque was improper since the company itself was not arraigned as an accused in the private complaint.

What did the court decide?

The prosecution of the petitioners in C.C.No.1367/2015 for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 was quashed.

Mr Sijin Joseph Vs M/S Raitha Seva Gramodyoga — Cheque Dishonour | Karnataka HC (2026)

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NC: 2026:KHC:12766 CRL.P No. 1738 of 2019

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 2^ND DAY OF MARCH, 2026

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BEFORE

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THE HON'BLE MR. JUSTICE R. NATARAJ CRIMINAL PETITION NO. 1738 OF 2019

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BETWEEN:

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MR SIJIN JOSEPH, S/O JOSEPH M M, AGED ABOUT 41 YEARS, THE EX. EXECUTIVE OFFICER, KASARAGOD GRAMINA SUPER MARKET LTD., R/O VRINDAVAN COMPLEX, CHERKALA POST,CHENGALA, KASARAGOD DISTRICT-671541.

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PANDURANGA BHAT S/O ACHUTHA BHAT, AGED 51 YEARS, EX MANAGING DIRECTOR, KASARAGOD GRAMINA SUPER MARKET LTD., R/O KUDINGILA HOUSE,

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Digitally signed by MARKONAHALLI RAMU PRIYA Location: HIGH COURT OF KARNATAKA

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YETHADKA POST, KASARGOD DISTRICT-671551.

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RAJESH KRISHNA S/O KRISHNA ALVA, AGED ABOUT 44 YEARS, EX. CHAIRMAN, KASARAGOD GRAMINA SUPER MARKET LTD., R/O P.B 10/596 MOOLADKA HOUSE, PERDALA POST, KASARGOD DISTRICT-671551.

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2 - NC: 2026:KHC:12766 CRL.P No. 1738 of 2019

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HC-KAR

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K G AJITH KUMAR

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S/O K G GANANADHAN, AGED 43 YEARS, EX. DIRECTOR, KASARAGOD GRAMINA SUPER MARKET LTD., R/O SHANKARAMPADY, SHAJI MANDIR, CHENGALA (VIA) KASARGOD DISTRICT-671541.

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…PETITIONERS

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(BY SRI. S.B. MANJUNATH, ADVOCATE)

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AND:

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M/S RAITHA SEVA GRAMODYOGA, KANYANA HEBRI, KARKALA TALUK, REPRESENTED BY ITS MANAGING PARTNER, MR.LAXMINARAYANA, S/O S NARASIMHA NAYAK, R/O NEAR T.B., HEBRI-576112.

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…RESPONDENT

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(BY SRI. SANGAMESH, ADVOCATE)

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THIS CRL.P FILED U/S.482 CR.P.C PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.1367/2015 REGISTERED BY THE RESPONDENT PENDING ON THE FILE OF II ADDITIONAL CIVIL JUDGE AND J.M.F.C., KARKALA AGAINST THE PETITIONERS FOR THE OFFENCE P/U/S 138 OF N.I. ACT.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,

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ORDER WAS MADE THEREIN AS UNDER:

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NC: 2026:KHC:12766 CRL.P No. 1738 of 2019

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HC-KAR

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CORAM: HON'BLE MR. JUSTICE R. NATARAJ

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ORAL ORDER

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The accused in C.C.No.1367/2015 on the file of the II Additional Civil Judge and JMFC, Karkala (henceforth referred to as 'Trial Court') are before this Court challenging the prosecution launched against them.

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(i) The respondent lodged a private complaint alleging commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (henceforth referred to as 'N.I. Act'). The respondent alleged that the petitioners are the Executive Officer, Director, Managing Director and Chairman of Kasaragod Gramina Super Market Ltd., which had drawn a cheque for a sum of Rs.1,00,00/-. The

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cheque was dishonoured on presentation. A notice under Section 138 of the N.I. Act was issued by the respondent to the petitioners herein, who replied denying that they were liable, following which, a private complaint was lodged against the petitioners for an offence punishable under Section 138 of the N.I. Act. The Trial Court took cognizance and issued process to the petitioners.

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4 - NC: 2026:KHC:12766 CRL.P No. 1738 of 2019

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HC-KAR

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(ii) Being aggrieved by the same, the petitioners are before this Court in this petition.

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The learned counsel for the petitioners submitted that the private complaint lodged by the respondent was not maintainable against the Director, Managing Director, Chairman and Executive Officer unless the company itself was arraigned as accused. He contends that a demand notice under Section 138 of the N.I. Act was not issued to the company but was issued to the petitioners herein. In the private complaint, the company was not arraigned as accused. He therefore, contends that the Trial Court could not have taken cognizance and issued process. He also contends that Kasaragod Gramina Super Market Ltd. is a public limited company and therefore, the liability alleged is that of the company and not of the petitioners. He further claims that the petitioner No.1 is neither a Director of Kasaragod Gramina Super Market Ltd., and is not signatory to cheque allegedly drawn in favour of the respondent. He thus, contends that unless there was sufficient pleading to justify how the petitioners are liable for the day-today affairs of the company, the Trial Court could not have

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5 - NC: 2026:KHC:12766 CRL.P No. 1738 of 2019

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HC-KAR

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taken cognizance and issued process. He therefore, prayed that the order taking cognizance and issuing process be quashed.

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Per contra, learned counsel for the respondent submitted that the petitioners are either Directors or Managing Director of the company and therefore, they can be prosecuted for an offence punishable under Section 138 of the N.I. Act. He contends that the issuance of the cheque by Kasaragod Gramina Super Market Ltd., is not in dispute and hence, the petitioners being the servants of the company are liable to be prosecuted.

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I have considered the submissions of the learned counsel for the petitioners as well as the learned counsel for the respondent.

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An offence under Section 138 of the N.I. Act is said to be committed when a cheque drawn from an account maintained by a person towards discharge of any debt or liability is returned unpaid on the ground that the amounts standing to his credit is insufficient or it exceeds arrangements. However, he can escape prosecution, if he pays the amount mentioned in the cheque within fifteen days from the date of

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HC-KAR

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receipt of a notice of demand by the payee or holder in due course. Therefore, whenever an offence is committed, it is "the person who issues a cheque" who is responsible and liable to be prosecuted. A person includes both juristic and natural person.

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In the case on hand, the respondent described the petitioners herein as the Directors/Managing Director and Executive Officer of a company, which issued the cheque in question. A perusal of the statutory notice enclosed along with the private complaint shows that the notice of demand was not issued to the company but was issued to the petitioners and in the private complaint, the company was not arraigned as an accused. Therefore, in the event of a conviction, the petitioners who are merely servants of the company and who are vicariously liable in view of their relation with the company, cannot be sentenced, as their principal namely, the company is not arraigned as an accused. In that view of the matter, the prosecution of the petitioners by the respondent for an offence punishable under Section 138 of the N.I. Act, is liable to be halted.

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NC: 2026:KHC:12766 CRL.P No. 1738 of 2019

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HC-KAR

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Hence, this petition is allowed . The impugned prosecution of the petitioners in C.C.No.1367/2015 on the file of the II Additional Civil Judge and JMFC, Karkala, for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881, is quashed.

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Sd/(R. NATARAJ)

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JUDGE

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PMR

Mr Sijin Joseph v. M/S Raitha Seva Gramodyoga

Case brief

What is this about?

What did the court decide?

Mr Sijin Joseph v. M/S Raitha Seva Gramodyoga

Case brief

What is this about?

What did the court decide?

What the court decided

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