A director's personal endorsement of a cheque can implicate a company in liability under the NI Act, reinforcing the scrutiny necessary in summoning orders.

JUDGMENT :

ANUP JAIRAM BHAMBHANI, J.

By way of the present petition filed under section 482 of the Code of Criminal Procedure 1973 ('Cr.P.C.'), the petitioner seeks quashing of summoning order dated 23.08.2018 passed by the learned Metropolitan Magistrate-01, Patiala House Courts, New Delhi in case bearing CC NI Act No. 12918/2018 in proceedings under section 138 of the Negotiable Instruments Act, 1881 ('NI Act'). The petitioner also challenges order dated 07.06.2023 passed in the same proceedings, whereby the learned Magistrate has dismissed an application filed by the Official Liquidator of the petitioner-company seeking stay of proceedings.

2. Notice on this petition was issued vidé order dated 15.07.2024 and proceedings in case bearing CC No. 12918/2018 were stayed qua the petitioner. Written Submissions dated 05.05.2025 and 06.05.2025 have been filed respectively on behalf of the petitioner and respondent No.2.

3. The court has heard Mr. Chandra Shekhar Yadav and Mr. Astitva Srivastava, learned counsel appearing for the petitioner; and Mr. Shashwat Awasthi, learned counsel appearing for respondent No.2, who is the contesting respondent in the matter. Considering the nature of the case, the State has no role in the matter.

SUBMISSIONS ON BEHALF OF THE PETITIONER

4. Mr. Chandra Shekhar Yadav has submitted, that vidé order dated 03.01.2020 passed by the learned National Company Law Tribunal ('NCLT'), Indore Bench at Ahmedabad, Corporate Insolvency Resolution Process ('CIRP') was initiated against the petitioner company; and thereafter vidé order dated 26.02.2021, liquidation of the company was ordered; and accordingly, in view of section 33(5) of the Insolvency & Bankruptcy Code, 2016 ('IBC'), the institution of any suit or other legal proceedings against the company was barred.

5. Furthermore, it has been submitted, that the cheque that is the basis of the criminal complaint under section 138 of the NI Act, viz., Cheque No. 000011 dated 05.06.2018 for Rs. 2 crores, was drawn on the personal account of Accused No. 2 Mr. Subhash Chand Aggarwal, and not on the petitioner company's bank account; and therefore, the company could never have been arrayed as an accused in the criminal complaint.

6. Learned counsel has also argued, that the criminal complaint did not contain any specific allegation imputing any liability upon the petitioner company; nor had the complainant invoked vicarious liability on the part of accused No. 2 arising from any default on the part of the company; nor had the complainant invoked section 141 of the NI Act in the criminal complaint. In this regard, learned counsel has placed reliance on the decisions of the Supreme Court inP.J. Agro Tech Ltd. and Others vs. Water Base Ltd. (2010) 12 SCC 146 , paras 7 and 9,Inder Mohan Goswami & Anr. vs. State of Uttaranchal (2007) 12 SCC 1 , Pepsi Foods Ltd. & Anr. vs. Special Judicial Magistrate & Ors. (1998) 5 SCC 749 to submit, that the summoning of an accused in a criminal case is a serious matter and a summoning order must reflect the Magistrate’s considered satisfaction with regard to an offence being made-out. It has been argued that a summoning order under section 138 of the NI Act cannot be passed mechanically or against a non-drawer of the cheque, without evidence of any complicity in the offence.

7. In furtherance of their argument, learned counsel for the petitioner has drawn attention to the relevant extract of the impugned summoning order, which reads as under:

“Evidence by way of affidavit tendered by AR of complaint. Original documents have been filed on recor