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IN THE HIGH COURT OF ALLAHABAD
HON'BLE SAURABH SHYAM SHAMSHERY, J.
M/s Kitply Industries and Others – Applicants
Versus
State of Uttar Pradesh and Another - Opposite Parties
Application Under Section 482 No. 617 Of 2020, Application U/S 482 No. 1355 of 2020, Application U/S 482 No. 1361 of 2020, Application U/S 482 No. 1691 of 2020, Application U/S 482 No. 1976 of 2020, Application U/S 482 No. 44871 of 2019, Application U/S 482 No. 47031 of 2019, Application U/S 482 No. 47828 of 2019, Application U/S 482 No. 483 of 2020, Application U/S 482 no. 509 of 2020, Application U/S 482 No. 516 of 2020, Application U/S 482 No. 612 of 2020, Application U/S 482 No. 822 of 2020.
Decided On : 24-07-2024
NI Act - Dishonour of Cheques - Sections 138, 141, 142 - The court discussed the provisions of the Negotiable Instruments Act, particularly Sections 138, 141, and 142, which govern the dishonour of cheques and the liability of signatories. The court emphasized that for a complaint under Section 138 to be maintainable, the principal offender (the company) must be arrayed as an accused. The court interpreted the necessity of impleading the company in light of the Supreme Court's ruling in Aneeta Hada, which established that directors or officers cannot be prosecuted without the company being named as an accused. The court concluded that the trial court's summoning order was flawed due to the non-joinder of the company and remitted the matter for fresh consideration.
Fact of the Case:
The case involves a series of applications filed under Section 482 Cr.P.C. concerning dishonoured cheques issued by a company to the complainant. The complainant initiated proceedings under Section 138 of the Negotiable Instruments Act against certain individuals associated with the company, but not the company itself, leading to legal challenges regarding the maintainability of the complaint.
Finding of the Court:
The court found that the complaint was not maintainable due to the non-joinder of the company, which was the principal offender. The court noted that the trial court had erred in summoning the individuals without including the company as an accused, as established by the precedent set in Aneeta Hada.
Issues: The primary issues were whether the complaint was maintainable without the company being named as an accused and whether the trial court had the authority to summon individuals without the company being impleaded.
Ratio Decidendi: The court held that under the provisions of the NI Act, particularly in light of the Supreme Court's ruling in Aneeta Hada, a complaint for dishonoured cheques cannot proceed against individuals without the company being included as an accused. The court emphasized that the trial court's summoning order was legally flawed due to the omission of the company.
Final Decision: The court set aside the impugned summoning orders and remitted the matter back to the trial court for fresh consideration of the impleadment application, instructing that the proceedings be concluded within two months.
JUDGMENT :
(Saurabh Shyam Shamshery, J.) :
1. Present bunch of applications filed under Section 482 Cr.P.C. are arising out of commercial transaction between parties, wherein number of cheques allegedly issued in favour of Complainant by applicant Company were got dishonoured and the Complainant has initiated separate proceedings under the provisions of Section 138 of Negotiation Instruments Act, 1881 (hereinafter referred to as “NI Act”).
2. Legal and factual issue involved in all cases are common, therefore, all the applications are being decided by this common judgment.
Factual Matrix
3. In order to appreciate factual and legal issue involved in present cases, it would be relevant to reproduce relevant documents annexed in leading matter being Application under Section 482 No. 617 of 2020 as under:
A. Complainant has filed a complaint under Sections 138, 141 and 142 of NI Act and the same in its entirety is reproduced hereinafter:
B. Chief Judicial Magistrate, Rampur vide impugned order dated 13.08.2012 summoned applicants No. 2 to 5, (the Company, i.e., Applicant No. 1 was not summoned since it was not arrayed as an accused) to face trial and said order is reproduced hereinafter:
C. Applicants No. 4 and 5 being aggrieved by above order, have filed a criminal revision, which was allowed by order dated 18.06.2013 and matter was remitted back to Trial Court to pass a fresh order taking note of Aneeta Hada Vs. M/S Godfather Travels and Tours Pvt. Ltd. 2012(5) SCC 661. Relevant part of order is mentioned hereinafter:
D. The Complainant in order to fill up a legal lacuna, filed an impleadment application to implead applicant No. 1 i.e. M/S Kitply Industries, to which objections were also filed, though after remand the applicants have no lis before Trial Court. On remand, Trial Court passed a fresh impugned summoning order dated 03.09.2015 and for reference relevant part of order is mentioned hereinafter:
E. Aforesaid order was again challenged before Revisional Court at the behest of all applicants, however, the same was dismissed vide impugned order dated 15.05.2019 and relevant part thereof is mentioned hereinafter:
4. Above referred both orders are impugned in first application and similar impugned orders are challenged in respective applications.
5. Undisputed facts
(i) All cheques in question were issued by authorised signatories of applicant-company, M/s Kitply Industries Ltd. in favour of complainant towards commercial transactions between parties.
(ii) All cheques in question were got dishonoured on ground of “insufficient balance”.
(iii) Statuary notice was issued to applicants No. 2 to 5 but not to the Company, the principal offender. A complaint was filed only against applicants No. 2 to 5 under Sections 138, 141, 142 of NI Act disclosing that all proposed accused worked for the Company.
(iv) The applicants No. 2 to 5 were summoned but it was challenged and Revisional Court remanded the matter for fresh consideration in view of judgment passed by Supreme Court in Aneeta Hada (supra). This order was not challenged at behest of either party.
(v) At this stage an application for impleadment of Company was filed to which objections were also filed. Though there was no specific order passed on it, however, it was taken note in impugned summoning order as well as objection to it was also taken note of.
(vi) On remand for fresh order all applicants including the Company were also summoned and challenge to it before the Revisional Court remained unsuccessful.
6. Submission on behalf of Applicants
(i) The complaint as filed by complainant under N.I. Act was not maintainable for non-joinder of necessary party i.e. the Company, being principal offender as contemplated in Aneeta Hada (supra).
(ii) The application filed at this stage of remand to implead the Company was not maintainable as well as the application was neither considered nor allowed nor rejected.
(iii) On remand, the summoning order was passed taking an analogy of State case, wher
AI
A complaint under Section 138 of the Negotiable Instruments Act is not maintainable without the principal offender, the company, being arrayed as an accused, as established by the Supreme Court in An....
Prosecution under Section 138 N.I. Act necessitates the company as the primary accused, without which proceedings against individuals related to the company are invalid.
The main legal point established in the judgment is that compliance with legal provisions, including the conduct of an inquiry as required under Section 202(1) Cr.P.C., and the applicability of Secti....
The judgment established the legality of amendments in complaints, the vicarious liability of individuals in a firm under Section 141 of the NI Act, and the burden of proof on the accused.
The main legal point established in the judgment is that the notice to the accused under Section 138(b) of the N.I. Act is not mandatory if the company and other directors have been served with statu....
Point of Law : On face of the record, participation of applicants is not found in the day to day functioning of Company, hence, on basis of the version that defence would be seen at the time of evide....
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