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2024 Supreme(Guj) 571

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
M. K. Thakker, J.
Nenshi Healthcare Thro Bhanushali Kishorkumar Damjibhai – Applicant
Versus
State of Gujarat & Ors. – Respondents
R/Criminal Misc. Application (For Leave To Appeal) No. 2800 of 2024 In F/Criminal Appeal No. 30674 of 2023
Decided On : 23-04-2024

Advocates:
Advocate Appeared:
For the Applicant : Mr. P B Khambholja
For the Respondent: Mr. Bhunesh C Rupera, Ms. Monali Bhatt, APP

For prosecution under Section 141 of the Negotiable Instruments Act, the company must be joined as an accused; its absence renders the complaint non-maintainable.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138 and 141 - Application for leave to appeal against acquittal in cheque dishonor case - Acquittal based on non-joinder of company as accused under Section 141 - The trial court held the complaint was not maintainable without the company being listed as an accused. (Paras 2, 3.1, 4, 6)

(B) Acquittal - Legal principles - The court emphasized that no sufficient reason was provided by the trial court for acquitting the accused despite presumption in favor of the complainant under Section 139 not being rebutted. (Paras 3.2, 3.3, 6)

Facts of the case:
The complainant filed a case for dishonor of a cheque amounting to Rs.23,41,335/- issued for the purchase of health care products, which was claimed to be dishonored. The accused argued misuse of cheques and the trial court acquitted based on non-joinder of the company as an accused. (Paras 2, 2.2)

Findings of Court:
The absence of the company as a prime accused rendered the prosecution under Section 141 of the N.I. Act unsustainable; thus, the acquittal was appropriate. (Paras 5, 6)

Issues: The crucial legal issue was whether the trial court erred in acquitting the accused on the ground of absence of the company as prime accused. (Paras 6)

Ratio Decidendi: The court reiterated that for a valid prosecution under Section 141, the company must be arraigned as an accused; the acquittal by the trial court was found to be properly reasoned. (Paras 5, 6)

Result: The application seeking leave to appeal was dismissed, thereby upholding the acquittal. (Paras 7, 8)

Table of Content
1. acquittal based on non-joinder of company (Para 1 , 2)
2. arguments challenging trial court's acquittal (Para 3)
3. necessity of addressing company as accused (Para 4 , 6)
4. corporate liability under n.i. act section 141 (Para 5)
5. dismissing application and refusing appeal (Para 7 , 8)

ORDER :

1. This application is filed seeking leave to prefer an appeal by the applicant-original complainant against judgment and order dated 26.04.2023 passed by the learned Chief Judicial Magistrate, Kadi in Criminal Case No. 262 of 2020 whereby, the accused came to be acquitted for the offences punishable under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the “N.I.Act”).

2. It is the case of the complainant that complainant is doing business of pharmaceutical raw materials and pharmaceutical finished products and the accused is also connected with health care products therefore, on purchasing the health care products, the cheque was issued for the repayment of the product of Rs.23,41,335/-. On depositing the said cheque, it was dishonoured. Therefore, after following due procedure, private complaint came to be filed before the learned trial court.

2.1. On being summoned respondent-accused appeared and raised the defence that PDC cheques were misused by the complainant and false case is filed

2.2. After considering the arguments and evidence on record, the learned trial court has acquitted the respondent-accused on the ground that the company namely Nayasa Life Science Pvt. Ltd. was not joined as prime accused and therefore, the provisions under section 141 of the N.I. Act were not fulfilled and the complaint is not maintainable which is the subject matter of challenge before this Court.

3. Heard learned advocate Mr.Khambholja for the applicant/ appellant.

3.1. Learned advocate Mr.Khambholja submits that cause title of the complaint reflects that respondent-accused namely Hitendra C. Prajapati was joined in the capacity of authorized person of Nayasa Life Science Pvt. Ltd. and therefore, it was not required to join the company as prime accused. However, learned trial court has acquitted the respondent-accused without any cogent reason.

3.2. Learned advocate Mr.Khambholja submits that though neither the signature on the cheque was disputed by the respondent-accused nor the issuance of the cheque was disputed and even though presumption which is in favour of the complainant under section 188 and 139 of the N.I.Act was not rebutted, learned trial court has acquitted the respondent-accused without any cogent reasons.

3.3. Learned advocate Mr.Khambholja submits that learned trial court has discarded the material evidence on record and passed judgment and order of acquittal and therefore, leave as prayed for is required to be granted.

4. Considering the arguments advanced by the learned advocate Mr.Khambholja and examining the record and proceedings thoroughly, it transpires from the record that complaint is filed by the complainant alleging that cheque which was issued for repayment of debt was dishonoured. The cheque which is produced below Exh.16 appears to have been signed by Hitendra C. Prajapati and issued by Nayasa Life Science Pvt. Ltd. Thereafter, demand notice which was issued below Exh.19 also reflects that the said notice was issued to the respondent-accused namely Hitendra C. Prajapati as authorized person of Nayasa Life Science Pvt. Ltd. Thereafter, complaint came to be filed wherein, the respondent accused was joined as authorized person of Nayasa Life Science Pvt. Ltd.

5. The judgment rendered by the Hon’ble Apex Court in the case of Aneeta Hada Vs Godfather Travels and Tours Pvt. Ltd wherein, the Hon’ble Apex Court has held as under:

    “21. At this juncture, we may refer to Section 141 which deals with offences by companies. As the spine of the controversy rests on the said provision, it is reproduced below: - “141. Offences by companies. – (1) If the person committing an offence under sectio

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