IMPORTANT POINT
Where a person is sought to be prosecuted under Section 138 of Negotiable Instruments Act in his individual capacity whereas cheque was drawn by him as Managing Director of Company on an account maintained by Company prosecution was liable to be quashed.

Vaman Rao, J. - These petitions under Section 482 of Cr. P.C: seek quashing of the proceedings in C.C. Nos. - 6 and 210 of 1999 on the file of the Addl. Judicial First Class Magistrate, Karimnagar in which the petitioner is sought to be prosecuted for the offence under Section 138 of the Negotiable Instruments Act.

2. According to the allegations in the complaint the complainant has been running finance business at Karimnagar as M/s. Om Sai Securities and Investments Private Limited. The accused approached the complainant for finance and sought a' loan of Rs. 6,40,000/-. The complainant accordingly gave the amount and the accused executed the necessary agreement agreeing to pay interest @ 24% per annum quarterly. The accused also agreed to repay the entire amount within six months from the date of the agreement. The accused after receiving the amount issued four blank cheques amounting to Rs. 4 lakhs and agreed to issue share certificates together with transfer deeds but the accused did not give any share certificates to the complainant as per the agreement. The complainant requested the accused for repayment of the loan amount after due period of six months and did not present the cheques for realisation. The accused requested the complainant to wait for some time for repayment. Subsequently, on the demand of the complainant, the accused issued four cheques to clear the 10 an amount of Rs. 6,40,000/-. One of the cheques was for Rs. 3 lakhs. This complaint in C.C. No. 6 of 1999 is in respect of this cheque for Rs. 3 lakhs which was presented for collection at the complainant's Bank, namely, Andhra - Bank, Masab Tank, Hyderabad and the cheque was returned on 19-11-1998 on the ground of insufficiency of funds in the account of the accused. The said Bank issued a memo dated 10-12-1998 informing the complainant about the return of the cheque. The complainant got issued notice within 15 days through his advocate on 2-12-1998 calling upon him for payment of the loan amount covered by the cheque within 15 days from the date of receipt of the notice. The accused received the notice and got issued false reply on 19-12-1998. As the complainant did not receive the amount within 15 days, a complaint has been filed within 30 days after expiry of the 15 days period.

3. Similarly, the accused gave a cheque for Rs. 1,40,000/- to the complainant and the same was' returned on 11-1-1999 - on the ground of insufficiency of funds and the Bank issued memo to that effect' on 31-12-1998. On receipt of such memo, the complainant got issued legal notice on 22-1-1999 through his advocate calling upon him, for payment of the loan amount covered by the cheque within 15 days from the date of receipt of notice and the accused received the notice and got issued false reply on 7-2-1999 and later complainant has filed complaint in C.C. No. 210 of 1999 within the statutory period as the complainant did not receive the amount from the accused.

4. The proceedings against the petitioner in the relative calandar cases are sought to be quashed mainly on the ground that the cheques in question, Photostat copies of which have been filed along with the petition, have been issued by M/s. Vijaya Industrial Gasses Limited and was signed by the Managing Director. But, the complaint has been filed against the petitioner, D. Chandra Reddy and not against the Vijaya Industrial Gasses Limited. It is, however, not disputed that the petitioner is the Managing Director of the said Vijaya Industrial Gasses Limited. The contention is that even assuming that the petitioner is the Managing Director of the company, he can be prosecuted only when the offence has been committed by the company.

5. Thus, it is contended that inasmuch as there is no averment in the complaint that the offence in question was committed by the company, the Managing Director of the Company cannot be prosecuted.

6. The next contention is that the complaint discloses that the petitioner approached and