Vicarious liability under the Negotiable Instruments Act is contingent upon the company committing the offense; rebuttable presumption of debt exists unless proven otherwise, requiring preponderance of probabilities for defense.

JUDGMENT :

Chittaranjan Dash, J.

1. By means of these applications, the Petitioner has sought to assail the order dated 17.02.2022 passed by the learned S.D.J.M., Rayagada in I.C.C. Nos. 28 of 2020 and 29 of 2020 respectively, whereby cognizance of the offence under Section 138 of the Negotiable Instruments Act, 1881 was taken against them.

2. The background facts of the case, in brief, are that Opposite Party No.1 filed a complaint before the learned S.D.J.M., Rayagada alleging that the Petitioner–Company, through its Director being in charge of the affairs of the Company, purchased cotton on 05.01.2020 and, towards the price of such purchase, issued a cheque for a sum of Rs.7,50,000/- (Rupees Seven Lakhs Fifty Thousand only) drawn on Karur Vysya Bank, Saluru, District–Vizianagaram, Andhra Pradesh, dated 05.01.2020. The said cheque, when presented by the Complainant with his banker, Andhra Bank, Rayagada, on 13.02.2020, was returned dishonoured on 14.02.2020 for insufficiency of funds. Thereafter, in compliance with the statutory requirements under Section 138 of the N.I. Act, the Complainant issued a demand notice through his counsel on 05.03.2020 addressed to the Petitioner–Company as well as its Director. The Petitioner, however, neither responded to the notice nor complied with the demand for payment of the cheque amount. Consequently, the Complainant instituted a complaint before the learned S.D.J.M., Rayagada. Upon examination of the complaint, the supporting affidavit, and the statements of witnesses recorded in person, the learned Court found prima facie materials under of the N.I. Act, took cognizance of the offence, and issued process. Aggrieved thereby, the Petitioner has approached this Court, inter alia, contending that being a Company registered under the Companies Act, 1956 and a juristic person, it had nominated its General Manager, namely, Selvem Kannan, as the Authorised Representative.

3. Mr. Rao, learned counsel for the Petitioner, submits that the cheque in question was admittedly signed by Opposite Party No.2 on 05.01.2020. However, Opposite Party No.2 had already resigned from the Company with effect from 25.10.2019, which resignation had been duly accepted by the Board of Directors in its resolution dated 25.10.2019 and intimated to the Registrar of Companies, wherein the said fact stood duly recorded. It is thus contended that since Opposite Party No.2 was no longer in the service of the Company on the date of issuance of the cheque, his act of issuing the same was wholly unauthorised. Consequently, the Petitioner–Company cannot be held vicariously liable for the offence allegedly committed by a person who was not in its employment, more so when the act is alleged to have been done in collusion with the Complainant. It is the further contention of the Petitioner that Opposite Party No.2 had misappropriated Company funds to the extent of Rupees Four Crores, for which Rambhadrapuram P.S. Case No. 38 of 2020 had been registered. Mr. Rao also submits that certain material questions with regard to the alleged transaction, including delivery of goods and bills, were left out during the cross- examination of the Complainant. Consequently, the Petitioner moved an application before the learned S.D.J.M., Rayagada under Section 311 Cr.P.C. for recalling the Complainant as a witness. However, the said application came to be rejected by order dated 25.05.2022. In the above circumstances, it is prayed on behalf of the Petitioner that the continuation of the criminal proceeding would amount to an abuse of the process of