High Court quashed criminal proceedings under Section 138 NI Act against a director alone because the cheque was issued on behalf of a company which had not been impleaded as an accused, violating Section 141 requirements.
Proceedings in C.C.No.97 of 2013 against the petitioner alone are quashed.
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IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 03.01.2019
CORAM THE HONOURABLE Mr.JUSTICE P.RAJAMANICKAM
Crl.O.P.No.15365 of 2013 and M.P.No.1 of 2013
Mrs.Meenakshi Ramji Director, M/s.Sowparnika Projects and Infrastructure Pvt, Ltd., No.1201, Dictionary Block, AECS Lay out, Kundalahalli, Bangalore – 37. ...Petitioner/Accused Vs.
G.Parthasarathy S/o. Late N.Gopal, Door No.34, GKD Nagar, Pappanaickenpalayam, Coimbatore – 641 037. ...Respondent/Complainant
PRAYER: Criminal Original Petition filed under Section 482 of the Code of Criminal Procedure, to call for the records and quash the proceedings in C.C.No.97 of 2013, on the file of the Judicial Magistrate No.3, Coimbatore.
For Petitioner : Mr.Adithya Varadarajan For M/s.C.Usha
For Respondent : No appearance
O R D E R
This Petition has been filed by the accused to quash the proceedings against her in C.C.No.97 of 2013, on the file of the Judicial Magistrate No.3, Coimbatore.
''Payment stopped by the drawer''. He further stated that after receipt of the memo from the bank with regard to the dishonour of cheque, he has issued a statutory notice to the petitioner herein on 04.04.2012 and the petitioner herein has received the said notice dated 09.04.2012 but, she failed to pay the amount within 15 days and hence, he was constrained to file the complaint against the petitioner herein to punish her under Section 138 of the Negotiable Instruments Act.
4.Though the respondent's name and his counsel name have been printed in the cause list, neither the respondent nor his counsel appeared. Hence, after hearing the arguments of Mr.Adithya Varadarajan, the learned counsel for the petitioner and perusing the records, order is being passed in this petition.
''58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words ''as well as the company'' appearing in the section make it absolutely unmistakably clear that when the company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted.
against the Director alone is not maintainable. Hence the proceedings against the petitioner in C.C.No.97 of 2013 on the file of the learned Judicial Magistrate No-3, Coimbatore, is liable to be quashed.
Assistant Registrar(CS III)
//True Copy//
Sub Assistant Registrar
msrm
To
+2ccs to Mr.A.E.Ravichandran, Advocate, S.R.No.798 & 749.
Crl.O.P.No.15365 of 2013
and M.P.No.1 of 2013
CA(CO)
rrs 18/02/2019
2 issues framed by the court
Whether criminal proceedings under Section 138 of the Negotiable Instruments Act against a director alone are maintainable when the cheque was issued on behalf of a company which was not impleaded as
Whether the requirement under Section 141 of the Negotiable Instruments Act mandates the arraigning of the company before prosecuting individual directors.
Colour shows how this judgement treated each authority
Aneeta Hada vs. Godfather Travels & Tours (P) Ltd.Relied on¶16
ANEETA HADA vs. GODFATHER TRAVELS & TOURS (P) LTD. (2012) 5 SCC 661 · Who else cites this
3 provisions across 2 enactments
Mrs. Meenakshi Ramji
G. Parthasarathy
P.RAJAMANICKAM
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
