The main legal point established in the judgment is that a person who issues a cheque in his individual capacity to discharge the liability of a company can be made an accused in his individual capacity, and in the absence of the company as an accused, proceedings may go on against the individual. The judgment also emphasized the necessity of arraigning a company as an accused for maintaining the prosecution under Section 141 of the Act.

JUDGMENT :

(Saurabh Shyam Shamshery, J.)

1. Heard Namit Srivastava, learned counsel for the applicant and Amrita Singh, learned counsel for the O.P. No.2.

2. By means of this application, applicant has prayed for quashing the entire proceedings of Criminal Case No.162 of 2021 under Section 138 of Negotiable Instruments Act, 1981, Shanti Devi vs. Jai Prakash Lohia, Police Station-Kotwali Sadar, district-Ballia. The applicant has not challenged the order dated 24.2.2021.

3. Learned counsel for applicant submits that the summoning order issued under Section 138 of N.I. Act was erroneous that entire allegations made in complaint are against the company namely C.G.R. Associates and Real Estate, however, the company has not been made a party therein and the applicant was made an accused in individual capacity, therefore, summoning order is bad in law and criminal proceedings are liable to be quashed.

4. Learned counsel for the applicant has placed reliance upon a judgment of Supreme Court in Alka Khandu Avhad vs. Amar Syamprasad Mishra and Anr, (2021) 4 SCC 675 and placed reliance on paragraphs 9 and 10 for consideration, which are mentioned hereinafter:

"9. On a fair reading of Section 138 of the NI Act, before a person can be prosecuted, the following conditions are required to be satisfied:

9.1) that the cheque is drawn by a person and on an account maintained by him with a banker;

9.2) for the payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability; and

9.3) the said cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account.

10. Therefore, a person who is the signatory to the cheque and the cheque is drawn by that person on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned by the bank unpaid, such person can be said to have committed an offence. Section 138 of the NI Act does not speak about the joint liability. Even in case of a joint liability, in case of individual persons, a person other than a person who has drawn the cheque on an account maintained by him, cannot be prosecuted for the offence under Section 138 of the NI Act. A person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque."

5. He has further placed reliance upon a judgment of Supreme Court in Aneeta Hada Vs. M/s Godfather Travels & Tours Pvt. Ltd. (2008) 13 SCC 703 and placed reliance on paragraph 40 that:

"The clear findings contained in a binding precedent were, however, sought to be explained by a two Judge Bench of this Court in Sehoratan Agarwal and another v. State of Madhya Pradesh, [ (1984) 4 SCC 352 ] stating :(SCC pp.354-55, para 5)

"The Section appears to our mind to be plain enough. If the contravention of the order made under Section 3 is by a Company, the persons who may be held guilty and punished are (1) the Company itself (2) every person who, at the time the contravention was committed, was in charge of, and was responsible to, the Company for the conduct of the business of the Company whom for short we shall describe as the person-in-charge of the Company, and (3) any director, manager, secretary or other officer of the Company with whose consent or connivance or because of neglect attributable to whom the offence has been committed, whom for short we shall describe as an officer of the Company. Any one or more or all of them may be prosecuted and punished. The Company alone may be prosecuted. The person-incharge only may be prosecuted. The conniving officer may individually be prosecuted. One, some or all may be pr