IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
MANDEEP PANNU, J.
Shalender Garhwal - Petitioner
Versus
Ramesh - Respondent
CRM-M-46848 of 2023 (O&M)
Decided On : 01-04-2026
JUDGMENT :
MANDEEP PANNU, J.
1. This is a petition under Section 482 of the Code of Criminal Procedure for quashing of complaint bearing NACT No. 372 of 2020 dated 28.04.2020 titled as “Ramesh vs. Kewal Kamboj etc.” under Section 138 of the Negotiable Instruments Act, pending in the Court of learned Judicial Magistrate 1st Class, Fatehabad, along with summoning order dated 26.08.2021 passed by the learned Chief Judicial Magistrate, Fatehabad, and all consequential proceedings arising therefrom.
2. Briefly stated, the complaint in question has been filed under Section 138 of the Negotiable Instruments Act by respondent-complainant alleging that the accused persons, namely Shalender Garhwal (petitioner herein) and Kewal Kamboj, were associated with a company namely Paras Mega Mart Limited. It is alleged that accused No.2/petitioner was the Managing Director of the said company and accused No.1-Kewal Kamboj was its shareholder, and both the accused persons had obtained a loan amount from the complainant for investment in their company. In discharge of the said liability, a cheque bearing No. 000628 dated 30.11.2019 amounting to Rs. 2,27,000/- was issued in favour of the complainant. The said cheque was issued on behalf of the company i.e. Paras Mega Mart Limited, and co-accused Kewal Krishan had signed the cheque as an authorized representative of the company. Upon presentation, the cheque was dishonoured vide memo dated 29.02.2020 with the remarks “payment stopped by drawer”. Thereafter, legal notice dated 20.03.2020 was served upon the accused persons, however, despite service of notice, the payment was not made, leading to the filing of the present complaint.
3. Upon preliminary evidence, the learned Chief Judicial Magistrate, Fatehabad vide summoning order dated 26.08.2021 summoned accused No.1 and 2 to face trial under Section 138 of the Negotiable Instruments Act. Not only this, the learned Magistrate also proceeded to summon Pars Mega Mart Limited i.e. the company, to face trial along with the accused persons, despite the fact that the said company had not been arrayed as an accused in the complaint and no notice as required under the act was issued to company.
4. Learned counsel for the petitioner has argued that the impugned complaint as well as the summoning order is illegal and unsustainable in the eyes of law. It is contended that it is a settled proposition that where a cheque is issued on behalf of a company, the company is the principal offender and must necessarily be arrayed as an accused in the complaint. It is further argued that the petitioner had not even signed the cheque. Reliance has been placed upon the judgment of the Hon’ble Supreme Court in ‘Aneeta Hada vs. M/s Godfather Travels and Tours Pvt. Ltd.’, 2012(2) RCR (Criminal) 854, wherein it has been categorically held that commission of offence by the company is an express condition precedent to attract vicarious liability of its Directors or officers. The use of the words “as well as the company” in Section 141 of the Negotiable Instruments Act makes it clear that when the company can be prosecuted, only then the persons mentioned in other categories can be made vicariously liable. It has thus been argued that in the absence of the company being arraigned as an accused, the complaint against the petitioner was not maintainable.
5. It is further contended that the learned Magistrate has committed a patent illegality by summoning the company despite the fact that it was not even impleaded as an accused in the complaint. The Magistrate has no jurisdiction to summon a person/entity which is not arrayed as an accused by the complainant. Thus, two legal defects go to the root of the matter, namely:
(i) non-impleadment of the company, which is a necessary party; and
(ii) summoning of the company by the Magistrate despite it not being an accused in the complaint.
6. I have heard learned counsel for the petitioner and have gone through the record of the case.
7. From a pe
Vicarious liability under Section 138 of the Negotiable Instruments Act requires the company to be named as an accused; absence of the company renders the complaint against the individual not maintai....
The company must be summoned as an accused in Section 138 N.I. Act cases for proceedings against its Directors to be valid.
The main legal point established in the judgment is the application of vicarious liability under section 141 of the Negotiable Instrument Act and the limitations on the High Court's jurisdiction when....
The main legal point established in the judgment is that a complaint filed by a company under Section 138 of the Negotiable Instruments Act must be in the name of the company and can be represented b....
Authorized signatory of company cheque from company account is not 'drawer' under Section 138 NI Act; company is drawer and must be impleaded with notice served; non-impleadment fatal, proceedings qu....
To uphold a prosecution for cheque dishonour, the company must be named as an accused along with the authorized signatory.
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