Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(All) 1447

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
Anish Kumar Gupta, J.
Kishore Shankar Signapurkar – Applicant
Versus
State Of U.P. And Anr. – Opposite Parties
Application U/S 482 No. - 4898 of 2019, Application U/S 482 No. - 4924 of 2019, APPLICATION U/S 482 No. - 4951 of 2019, Application U/S 482 No. - 4878 of 2019
Decided On : 19-09-2024

Advocates:
Advocate Appeared:
For the Applicant : Santosh Yadav
For the Opposite Party : Anura Singh, G.A., Prateek Dwivedi

IMPORTANT POINT
The company must be summoned as an accused in Section 138 N.I. Act cases for proceedings against its Directors to be valid.

Headnote:
Negotiable Instruments Act, 1881 - Sections 138 and 141 - Quashing of summoning orders - Applications filed by the Director of a company challenging summoning orders in cases under Section 138 for dishonour of cheques - The court held that the company must be summoned as an accused for proceedings against its Directors to be valid - The principle that the Magistrate takes cognizance of the offenders, not the offence, does not apply in this context - Summoning orders against the applicant upheld as the company was deemed summoned through the applicant. (Paras 6, 10, 26, 32)
Facts of the case:
The applicant, a Director of a company, issued cheques that were dishonoured. The trial court summoned the applicant but not the company, leading to the challenge of the summoning orders.
Findings of Court:
The court found no illegality in the summoning order, presuming the company was summoned through the applicant, who represented the company.
Issues: Whether the trial court's summoning order against the Director alone was valid without summoning the company.
Ratio Decidendi: The court ruled that for offences under Section 138, the company must be summoned as an accused, and the summoning of the Director suffices for the company's representation.
Result: Applications dismissed, trial court directed to expedite proceedings.

JUDGMENT :

Anish Kumar Gupta, J.

1. Heard Sri Santosh Yadav, learned counsel for the applicant, Sri Prateek Dwivedi, learned counsel appearing on behalf of opposite party No.2 and Sri Prem Prakash Tiwari, learned AGA for the State.

2. The instant application under Section 482 Cr.P.C. No. 4898 of 2019 has been filed seeking quashing of summoning order dated 31.10.2015 as well as the entire criminal proceedings in Case No. 1723 of 2015 (M/s Indcoat Shoe Component Ltd. vs. M/s Signapurkar's Leather House Pvt. Ltd. and Others) under Section 138 of the Negotiable Instruments Act, 1881 (in short, 'the N.I. Act'), Police Station-Kakadev, District-Kanpur Nagar, pending before the Metropolitan Magistrate-III, District-Kanpur Nagar, the instant application under Section 482 Cr.P.C. No. 4924 of 2019 has been filed seeking quashing of summoning order dated 04.12.2015 as well as the entire criminal proceedings in Case No. 2342 of 2015 (M/s Indcoat Shoe Component Ltd. vs. M/s Signapurkar's Leather House Pvt. Ltd. and Others) under Section 138 of the N.I. Act, Police Station-Kakadev, District-Kanpur Nagar, pending before the Metropolitan Magistrate-III, District-Kanpur Nagar, the instant application under Section 482 Cr.P.C. No. 4924 of 2019 has been filed seeking quashing of summoning order dated 04.12.2015 as well as the entire criminal proceedings in Case No. 2342 of 2015 (M/s Indcoat Shoe Component Ltd. vs. M/s Signapurkar's Leather House Pvt. Ltd. and Others) under Section 138 of the N.I. Act, Police Station-Kakadev, District-Kanpur Nagar, pending before the Metropolitan Magistrate-III, District-Kanpur Nagar and the instant application under Section 482 Cr.P.C. No. 4951 of 2019 has been filed seeking quashing of summoning order dated 31.10.2015 as well as the entire criminal proceedings in Case No. 1725 of 2015 (M/s Indcoat Shoe Component Ltd. vs. M/s Signapurkar's Leather House Pvt. Ltd. and Others) under Section 138 of the N.I. Act, Police Station-Kakadev, District-Kanpur Nagar, pending before the Metropolitan Magistrate-III, District-Kanpur Nagar and the instant application under Section 482 Cr.P.C. No. 4878 of 2019 has been filed seeking quashing of summoning order dated 08.09.2015 as well as the entire criminal proceedings in Case No. 1724 of 2015 (M/s Indcoat Shoe Component Ltd. vs. M/s Signapurkar's Leather House Pvt. Ltd. and Others) under Section 138 of the N.I. Act, Police Station-Kakadev, District-Kanpur Nagar, pending before the Metropolitan Magistrate- III, District- Kanpur Nagar.

3. All the aforesaid applications, are arising out of the summoning orders passed in the complaint cases under Section 138 of N.I. Act filed by opposite party No.2 whereby the trial court has summoned only the applicant herein and has not summoned the Company, which is also made the accused No.1 in all the complaint cases.

4. Since the parties are same in all the applications, all these matters are taken up together and heard together.

5. Brief facts of the case are that the applicant herein is the Director of M/s Signapurkar's Leather House Pvt.Ltd. (herein after referred to as 'the company') along with other directors, who have been made party to the complaint case under Section 138 N.I. Act filed by the opposite party No.2 in each complaint case. The applicant being authorized signatory of the company had issued 12 cheques in favour of opposite party No.2 in discharge of lawful liability for material supplied by opposite party No.2. The aforesaid cheques were presented for encashment, which were dishonourned for the reason 'stop payment' by the applicant herein. Thereafter, the demand notice was sent by the opposite party No.2 and when the demand notice was not complied with, the instant complaint case under Section 138 of N.I. has been filed by the opposite party No.2 against the company as well as its Directors including the applicant herein. Thereafter, trial court having found the prima facie case made out under Section 138 of N.I. Act against th