Arraigning the company as an accused is imperative for maintaining the prosecution under Section 138 of the Negotiable Instruments Act, 1881.

1. The XVI Additional Chief Metropolitan Magistrate, Bangalore City, on 06.07.2011, convicted both the accused in C.C.No.15622/2008, a case related to the dishonour of cheque/s, under S.138 of Negotiable Instruments Act, 1881 (for short ‘the Act’) and sentenced the accused to pay fine of Rs.4,02,000/-, Rs.4,00,000/-, from the fine amount, when realized, was ordered to be paid to the complainant as compensation. In default of payment of the compensation amount, the accused were ordered to undergo S.1 for a period of 4 months. Crl.A.No.577/2011 filed, thereagainst, in the City Civil and Sessions Court, Bangalore City, assigned to the Fast Track (Sessions) Court-XVII, was dismissed by a Judgment dated 30.11.2011. Assailing the said Judgments and Orders, petitioner/accused No.2, has filed this criminal revision petition.

2. The respondent filed a private complaint against one N.Bharat Shetty and the petitioner, Managing Director and Director respectively of a company, M/s Canara Polypack ltd., (for short ‘company’) for the offence punishable under S.138 of the Act, alleging that, for the purpose of the company, the accused borrowed Rs.4,00,000/-and towards repayment of the loan, issued in his favour two cheques, dated 30.11.2007, each for Rs.2,00,000/-, drawn on Vijaya Bank, Vijayanagar Branch, Bangalore – 40. The said cheques when presented for encashment, came to be dishonoured and returned with endorsements ‘account recalled’. By a notice dated 24.02.2008, the complainant called upon the accused to pay the cheque amount within 15 days of the receipt of notice. The notice sent to N. Bharath Shetty/accused No.1, was returned with postal shara ‘left’. The notice sent to the petitioner was served. The petitioner, disowning the liability to pay the demanded amount, sent a reply dated 12.03.2008. As the accused failed to pay the cheque amount, a private complaint was filed. Learned Magistrate took cognizance. Case was ordered to be registered and process was issued against the accused. Both the accused appeared and were released on bail. The accused denied the charge. During trial, the complainant got himself examined as PW-1 and marked Exs.P1 to P10. The accused were examined under S.313 Cr.P.C. Accused No.1 got himself examined as Dw-1. Accused No.2 was examined as DW-3. Exs.D1 to D19 was marked. The learned Magistrate having found that, ‘there existed a legally enforceable debt as on the date the cheques in question were issued and the cheques so issued having been returned unpaid because of non availability of fund in the account of the company – Canara Polypack Ltd., held that the complainant has proved beyond all shadow of doubt that the accused have committed the offence under S.138 of the Act’. As a result, the Judgment of conviction and Order of sentence, noticed supra, was passed. The same was questioned on various grounds in an appeal filed by the petitioner. It was pointed out that the alleged transaction being of the company and the cheques in question having been issued on behalf of the company, and M/s. Canara Polypack Ltd., the company, having not been arraigned as accused, the complaint being not maintainable, ought to have been dismissed. The Appellate Judge, without considering the said material contention, concurring with the findings recorded by the Magistrate, dismissed the appeal.

3. Appearing for the petitioner, Sri V.B. Shiva Kumar, learned advocate, by placing reliance on the decision in the case of Aneeta Hada Vs. Godfather Travels & Tours Pvt. Ltd. 2012 AIR SCW 2693, contended that the offence, if any, having been committed by the company, without the company being arraigned as an accused in the case, the prosecution of the petitioner – a director of the company, is impermissible. He submitted that the Courts below, without examining the defence putforth, by keeping in view the correct position of law, have found the petitioner guilty of the offence under S.138 of the Act. He submitted that the im