IN THE HIGH COURT OF ALLAHABAD
SHREE PRAKASH SINGH, J.
Dinesh Hariram Valecha Director Valecha Engeering Ltd - Applicant
Versus
State of U.P. And Another - Opposite Parties
APPLICATION UNDER SECTION 482 NO. - 6835 OF 2022.
Decided On : 16-08-2023
| Table of Content |
|---|
| 1. prayers for quashing summons in a cheque bounce case. (Para 2 , 3) |
| 2. arguments on procedural compliance in summons issuance. (Para 4 , 5 , 10 , 11) |
| 3. established principles surrounding vicarious liability. (Para 6 , 12 , 18) |
| 4. court analysis of trial procedure and requirements. (Para 16 , 20) |
| 5. final ruling allowing the application. (Para 22 , 23 , 24) |
JUDGMENT
Shree Prakash Singh, J.
Heard Shri Vinay Khare, learned Senior Advocate assisted by Shri Sesh Mani and Ishan Khare, learned counsel for the applicant, Sri Girish Chandra Sinha, learned counsel for opposite party no. 2, Shri Nirmal Kumar Pandey, learned AGAI for the State and perused the material placed on record.
2. The instant application has been filed with a prayer to quash the summoning order dated-27.09.2016 passed by Judicial Magistrate Pratapgarh in Complaint Case No-264/16 filed by the Opposite Party no. 2 U/s-138 Negotiable Instrument Act, as well as subsequent order dated-10.10.2019 passed by Learned Judicial Magistrate Pratapgarh on order dated-02.06.2022 by means which issued N.B.W. as well as Section-82 Cr. P.C. against the petitioner in mechanical manner which is contained as Annexure No. 1, 2 & 3 so for relates to the petitioner. It is further prayed that this Hon'ble Court may kindly be pleased to stay the further proceedings of Complaint Case No-264/16 ( Jitendra Pratap Singh v. Dinesh Valecha ), U/s-138 Negotiable Instrument Act, summoning order dated-27.09.2016 passed by Learned Judicial Magistrate Pratapgarh as well as subsequent order dated-10.10.2019 by means which issued N.B.W. and also Section-82 Cr.P.C. against the petitioner in mechanical manner.
3. Contention of learned counsel appearing for the applicant is that the present applicant had been the Director of the company, namely, Valecha Engineering Company Ltd. and he has resigned from the Board of Directors of the company in the year 2018. He added that some of the employees of the company, issued a cheque of the company to the opposite party no. 2 and that allegedly became bounced and thereafter, as per the assertion of the opposite party no. 2, he served notice, though, the same was never received to him, as the same was in the name of the company. He next added that, thereafter, the statement of the opposite party no. 2 was recorded under Section 200 of CrPC and thereafter, the learned trial Court passed the order on 27.09.2016, whereby, summoning the present applicant under Section 138 of Negotiable Instrument Act, 1981 (hereinafter referred as 'Act, 1881').
4. Contention of the learned counsel for the applicant is of three fold. The first contention is that while passing the impugned order dated 27.09.2016, the learned trial Court has ignored the mandate of the provision of Section 202(1) of CrPC, as is evident from the order itself that no enquiry or investigation has ever been done though, it is apparent from the plaint of the complaint itself that the opposite party no. 1 has been shown to reside at Bombay which is beyond the territorial jurisdiction of the Magistrate concerned. Secondly, the company has not been arrayed as a party in the complaint, which is erroneous as per the settled proposition of law.
5. Adding his arguments, he contended that the summoning order has been passed without assigning and recording reasons which is apparent from the summoning order itself. Further added that there is violation of the mandate of provision under Section 138 (1)(b) and 141(1) as well as 142 of the Act, 1881. Next submits that in fact, it has not been mentioned in the plaint itself that the notice which was sent by the opposite party no. 2, was ever served upon the present applicant or not?, which is one of the apparent illegality and the same was not dealt with, by the learned trial Court, in its order dated 27.09.2016 and further the annexure no. 4, which is the copy of the disputed cheque dated 09.03.2016, is not signed by the present applicant and he has also suppor
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 company must be summoned as an accused in Section 138 N.I. Act cases for proceedings against its Directors to be valid.
A director's personal endorsement of a cheque can implicate a company in liability under the NI Act, reinforcing the scrutiny necessary in summoning orders.
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....
For maintaining a prosecution under Section 138 of the Negotiable Instruments Act, arraigning of the company as an accused is imperative. The person in charge of the company cannot be held liable if ....
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