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2024 Supreme(All) 838

IN THE HIGH COURT OF ALLAHABAD
ARUN KUMAR SINGH DESHWAL, J.
Jitendra Mangala – Appellant
Versus
State of Uttar Pradesh and Another – Respondents
Application U/s 482 No. 6343 of 2024
Decided On : 22-05-2024

Advocates:
Advocate Appeared:
For the Appellants : Bhuvnesh Kumar Singh, Sangeeta Shukla.
For the Respondent: Sushil Kumar Chaturvedi.

IMPORTANT POINT
A complaint under Section 138 of the N.I. Act is not maintainable if the company that issued the cheque is not impleaded as an accused, as vicarious liability of the proprietor arises only when the company is part of the proceedings.

Headnote:

N.I. Act - Cheque Dishonor - Section 138, Section 141 - The court discussed the necessity of impleading the company as an accused in a complaint under Section 138 of the N.I. Act. It highlighted that vicarious liability of a proprietor arises only when the company is named in the complaint. The court referenced several Supreme Court judgments emphasizing that without the company being a party, the complaint is defective and cannot proceed. The court concluded that the absence of the company in the complaint barred the proceedings against the proprietor.

Fact of the Case:

The complaint was filed against the applicant under Section 138 of the N.I. Act for dishonoring a cheque issued by M/s Prerana Construction Pvt. Ltd., but the company was not named as an accused.

Finding of the Court:

The court found that the complaint was not maintainable as the company was not impleaded, which is a basic requirement under Section 141 of the N.I. Act. The court noted that the applicant could raise defenses during trial but emphasized the necessity of the company being part of the proceedings.

Issues: Whether the complaint under Section 138 of the N.I. Act is maintainable without the company being impleaded as an accused.

Ratio Decidendi: The court reiterated that for a complaint under Section 138 to be valid, the company must be named as an accused. The court distinguished the current case from previous judgments where the company was later added, emphasizing that the absence of the company from the complaint rendered it defective.

Final Decision: The court quashed the proceedings of Complaint Case No. 14 of 2018 and allowed the opposite party to file a fresh complaint by impleading the company within one month.

JUDGMENT :

ARUN KUMAR SINGH DESHWAL, J.

1. Heard Sri Bhuvnesh Kr. Singh, learned counsel for the applicant, Sri Sushil Kr. Chaturvedi, learned counsel for opposite party No. 2 and Sri Rajeev Kr. Singh, learned A.G.A. for the State.

2. The instant application has been filed seeking quashing of entire proceeding of Complaint Case No. 14 of 2018 (Smt. Manju Sharma vs. Jitendra Mangala), u/s 138 N.I. Act, P.S. Tajganj, District Agra, pending before the Additional Court No. 1, Agra as well as summoning order dated 1.9.2018.

3. The factual matrix giving rise to the present case are that the complaint was filed by opposite party No. 2 against the applicant u/s 138 N.I. Act. In the aforesaid complaint, it was mentioned that cheque was issued by M/s Prerana Construction Pvt. Ltd., but only the present applicant who is the proprietor of the company M/s Prerana Construction Pvt. Ltd. was impleaded as accused. The court below after perusal of the record, summoned the present applicant by summoning order dated 1.9.2018 and by way of present application, the proceeding of aforesaid complaint case is under challenge.

4. Learned counsel for the applicant submits that it is undisputed that the cheque in question was issued on behalf of the company M/s Prerana Construction Pvt. Ltd., but while filing the impugned complaint, the company in question was not impleaded as accused. Therefore, the proceeding cannot be proceeded against the accused who is the proprietor of the company who is vicariously liable only when the company is impleaded as a party in the complaint. Therefore, the impugned complaint is barred by Section 141 N.I. Act. Learned counsel for the applicant also argued that in case paragraphs No. 6 of 13 of Himanshu vs. B. Shivamurthi and another, (2019) 3 SCC 797, Hon'ble Apex Court observed that the complaint, in absence of the company, is defective and at this stage company cannot be arrayed. Therefore, fresh complaint is also barred because fresh notice is required to be given to the company which is necessary for arising of the cause of action.

5. per contra learned counsel for opposite party No. 2 and learned A.G.A. submitted that the cheque in question was issued on behalf of the company by the applicant, therefore, he is personally liable, therefore, there is no illegality in the summoning order and the impugned proceeding.

6. Considering the rival submissions of the parties and on perusal of the record, it appears that the cheque in question was issued on behalf of the company M/s Prerana Construction Pvt. Ltd. to opposite party No. 2, but while filing the impugned complaint, opposite party No. 2 did not implead the company as accused which is the basic requirement u/s 141 N.I. Act.

7. The Apex Court also in the cases of Aneeta Hada vs. M/s God Father Travels and Tours Pvt. Ltd. (2012) 5 SCC 661, Himanshu vs. B. Shivamurthi and another, (2019) 3 SCC 797, Dilip Hariramani vs. Bank of Baroda, 2022 Live Law (SC) 457 as well as N. Harihara Krishnan vs. J. Thomas, 2018 (3) SCC 663 observed that without impleading the body corporate which includes the company itself, proceeding u/s 141 N.I. Act cannot be proceeded.

8. So far as the contention of learned counsel for the applicant that fresh complaint after impleading the company is also barred because Hon'ble Apex Court in the case of Himanshu vs. B. Shivamurthi (supra) has observed that in absence of notice of demand, being served on the company, the company cannot be arrayed as accused, is concerned, in the case of Himanshu vs. B. Shivamurthi (supra) the issue was whether on objection raised by the accused that company was not impeaded as party in the complaint filed for dishonoring of the cheque on behalf of the company but the High Court has permitted to implead the company and Hon'ble Court observed that as the statutory demand notice was not issued to the company, therefore, at this stage company cannot be proceeded by impleading the same in the complaint. Paragraphs No. 6, 11 & 13 of

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