A director cannot be held liable under Section 138 of the Negotiable Instruments Act if the company is not accused and no notice demanding payment has been served to the company.

JUDGMENT :

ANIL KUMAR CHOUDHARY

1. Heard the parties.

2. This Criminal Miscellaneous Petition has been filed invoking the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure with a prayer to quash the entire complaint including the summons order dated 08.06.2022 passed by the learned Judicial Magistrate, Ranchi in connection with Complaint Case No.12129 of 2021 for the offence punishable under Section 138 of Negotiable Instruments Act.

3. The brief fact of the case is that a cheque was issued by M/s Govind Radhe Real Estate (P) Company Limited, through its Director, who is the petitioner herein. The said cheque was dishonoured. No notice of demand was issued to or served upon the company in the name and style of M/s Govind Radhe Real Estate (P) Company Limited. The said company- M/s Govind Radhe Real Estate (P) Company Limited has not been arrayed as an accused but Director of the said company who is the petitioner herein in this Criminal Miscellaneous Petition has only been arrayed as an accused in his personal capacity.

4. Learned counsel for the petitioner draws attention of this Court to the judgment of this Court in the case of Ajay Kumar Agarwal @ Ajay Kumar Agrawal vs. The State of Jharkhand & Another passed in Cr.M.P. No.2195 of 2022 dated 01.05.2024 and submits that this Court in that case relied upon the judgment of the Hon’ble Supreme Court of India in the case Dilip Hiramani vs. Bank of Baroda reported in 2022 0 Supreme (SC) 417 , para-14 of which reads as under:-

“14. The provisions of Section 141 impose vicarious liability by deeming fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub-section (1) or (2) would not be liable and convicted as vicariously liable. Section 141 of the NI Act extends vicarious criminal liability to officers associated with the company or firm when one of the twin requirements of Section 141 has been satisfied, which person(s) then, by deeming fiction, is made vicariously liable and punished. However, such vicarious liability arises only when the company or firm commits the offence as the primary offender. This view has been subsequently followed in Sharad Kumar Sanghi v. Sangita Rane, 17[(2015) 12 SCC 781 : “11. In the case at hand as the complainant's initial statement would reflect, the allegations are against the Company, the Company has not been made a party and, therefore, the allegations are restricted to the Managing Director. As we have noted earlier, allegations are vague and in fact, principally the allegations are against the Company. There is no specific allegation against the Managing Director. When a company has not been arrayed as a party, no proceeding can be initiated against it even where vicarious liability is fastened under certain statutes. It has been so held by a three-Judge Bench in Aneeta Hada v. Godfather Travels and Tours (P) Ltd. in the context of the Negotiable Instruments Act, 1881.”] Himanshu v. B. Shivamurthy and Another, 18[(2019) 3 SCC 797 : “13. In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused.”] and Hindustan Unilever Limited v. State of Madhya Pradesh19[(2020) 10 SCC 751 : “23. Clause (a) of sub-section (1) of Section 17