Prosecution under Section 138 of the N.I. Act is not maintainable against signatories of a cheque unless the firm, as the drawer, is also arraigned as an accused.

ORDER :

V.SUJATHA, J.

This petition, under Section 482 of Cr.P.C., is filed by the petitioners/accused in C.C.No.81 of 2018 on the file of the learned Judicial First Class Magistrate, Kotturu, Srikakulam District, seeking to quash the proceedings against them in the said case.

2. The aforesaid C.C. has been registered against the petitioners/accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, 'the N.I. Act'), on the basis of a private complaint filed by respondent No.2 herein under Section 200 Cr.P.C read with Section 142 of the N.I. Act.

3. The allegations in the complaint filed by respondent No.2/complainant, in brief, are as under:

(i) Accused Nos.1 and 2, who are husband and wife, are known to the complainant as Managing Partner and Partner of Sri N.A.R. Constructions, Visakhapatnam, respectively. On their request, the complainant has lent an amount of Rs.6,00,000/- (Rupees Six Lakhs only) to the accused for business purposes on 20.01.2016 and that the accused have agreed to repay the said amount with interest at the rate of 24% per annum and also executed a promissory note.

(ii) It was further alleged that subsequently, when the complainant was in need of money, he requested the accused to repay the amount lent by him. After repeated demands, the accused, representing Sri N.A.R. Constructions as Managing Partner and Partner respectively, have jointly issued a cheque bearing No.275153 dated 11.09.2017 drawn on Oriental Bank of Commerce, Gajuwaka, Visakhapatnam, for an amount of Rs.5.00 lakhs towards part payment of the debt. However, when the complainant presented the said cheque for collection through his banker, the same was dishonoured and returned with an endorsement „funds insufficient‟, vide cheque return memo dated 20.11.2017.

(iii) It was further alleged that the complainant got issued a legal notice to the accused on 13.12.2017, informing them about dishonor of the cheque and calling upon them to pay the cheque amount within fifteen days from the date of receipt of the notice. However, the said legal notice was returned unserved, as the accused refused to receive the same, and even thereafter, the accused did not pay the cheque amount. Hence, the complainant filed the private complaint against the accused for the offence punishable under Section 138 of N.I. Act, which came to be registered as C.C.No.81 of 2018 by the trial Court.

4. Learned counsel for the petitioners contends that the petitioners, being signatories of the cheque in question, are being prosecuted, while the firm - Sri N.A.R. Constructions, which is the drawer of the cheque and from whose account the cheque was issued, has not been arraigned as an accused. Learned counsel contends that without arraigning the firm as an accused, the question of fastening vicarious liability on the petitioners does not arise and thus, the proceedings against the petitioners are liable to be quashed on this sole ground. In support of his contentions, learned counsel placed reliance on the judgments of the Hon'ble Apex Court in Aneeta Hada v. Godfather Travels & Tours (P) Ltd., [(2012) 5 SCC 661] and Himanshu v. B. Shivamurthy , [(2019) 3 SCC 797]

5. On the other hand, learned counsel for respondent No.2/ complainant, reiterating the substance of the written arguments filed by him, contends that though the petitioners have obtained the debt in their individual capacity but not in the official capacity as Managing Partner and Partner of the firm, they have tactfully issued the cheque from the account of the firm only with a view to avoid prosecution. He further contends that the promissory note was executed by petitioner No.1 and the same would show that the debt was obtained in his individual capacity. Learned counsel further contends that these are all questions of fact, which should be decided only after a full-fledged trial and, therefore, the present petition may be dismissed, allowing the trial to proceed. Learned counse