Prosecution under Section 138 of the Negotiable Instruments Act requires the company to be arraigned as an accused to impose vicarious liability on its officers.

JUDGMENT :

Dr. S.K. Panigrahi, J.

1. The Petitioner has preferred the present revision petition assailing the order dated 05.05.2014 passed by the learned J.M.F.C., Balasore in I.C.C. No.114 of 2011, contending that the proceedings are vitiated in law for want of compliance with the mandatory requirements of Section 141 of the Negotiable Instruments Act.

I. FACTS AS PRESENTED BY THE REVISIONIST:

2. The prosecution’s case can be summarized as follows:

(i). Complainant/Opposite Party is the Sole proprietor of M/s. Maa Gayatri Transport & Supplier, a business engaged in supplying building materials such as chips, metal, boulders, sand, and stone products in Balasore, Odisha.

(ii). Petitioner/Accused is the Executive Director of CCC Builders Merchant Pvt. Ltd., Gurgaon, Haryana, a company engaged in construction work. The dispute arises from a business transaction involving the supply of building materials for the construction of a concrete road for S.E. Railways at Balasore under the direct supervision of the petitioner.

(iii). The complainant supplied metal and sand on credit to the petitioner’s company between October and November 2010. The total outstanding dues against the petitioner/company were as follows:

a. Materials supplied between 11.10.2010 and 01.11.2010: ₹6,58,300/-.

b. . Previous outstanding balance before October 2010: ₹6,34,045/-.

c. Total outstanding amount: ₹12,92,345/-.

(iv). A partial payment of ₹5,00,000/- was made through a bank transfer from the company’s account to the complainant’s account. The remaining balance of ₹7,92,345/- was due.

(v). To settle part of the outstanding dues, the petitioner (accused) issued a cheque (No. 255951) dated 19.12.2010 for ₹4,00,000/- from Axis Bank Ltd. at Balasore. The complainant deposited the cheque on 20.12.2010, but it was dishonored on 29.12.2010 due to “Payment Stopped by Drawer.”

(vi). The complainant was formally notified of the dishonor on 01.01.2011 and received confirmation on 03.01.2011. Multiple attempts were made to contact the accused but they failed.

(vii). A demand notice under Section 138 of the Negotiable Instruments Act (NI Act) was issued on 27.01.2011 through registered post with acknowledgment due (A.D.). The accused received the notice on 04.02.2011 but failed to respond or make payment within the statutory period.

(viii). Consequently, the complainant filed ICC Case No. 114 of 2011 before the learned SDJM, Balasore, alleging an offense under Section 138 of the NI Act (dishonor of cheque). The complaint was supported by six exhibits, including the dishonored cheque (No. 255951), the deposit slip, the cheque return memo dated 15.11.2010, the statutory advocate notice dated 27.01.2011, the postal receipts, and the returned acknowledgment due (A.D.) slip.

II. THE FINDINGS OF THE LOWER COURT:

3. Cognizance was taken by the learned SDJM, Balasore, on 15.03.2011, and the case was later transferred to the learned JMFC, Balasore, for trial. On 23.09.2011, the substance of the accusation was explained to the accused, and the trial commenced.

4. The complainant was examined as PW-1 and was cross-examined at length. At no point during the early stages of the trial did the petitioner raise any objections about the non-inclusion of the company as an accused.

5. On 2.07.2013, at an advanced stage of the trial, the petitioner filed a petition before the trial court arguing that the case was not maintainable because the company was not arraigned as an accused, as required under Section 141 of the NI Act.

6. The JMFC Court rejected the petition on 05.05.2014, stating that the case had already substantially progressed, and raising such objections at this stage would amount to a delay tacti