The main legal point established in the judgment is the requirement to make the company a party to the proceedings under Section 138 of the N.I. Act when the company is the principal offender, as mandated by Section 141 of the N.I. Act.

JUDGMENT :

Sharad Kumar Sharma, J.

These two C482 Applications arise out of the proceedings under Section 138 of the Negotiable Instruments Act. While granting the interim order, the coordinate Bench of this Court has issued notice to respondent No. 2, and there is an office report dated 10.05.2022 and 03.11.2022, that respondent No. 2 has been served with the notices. In that eventuality, respondent No. 2 would be deemed to have been served. Hence, the matter is being proceeded to be heard ex parte against respondent No. 2.

2. These two C482 Applications, which will be governed by the common question of law and facts as involved consideration, hence are being decided by this common judgment.

3. In C482 Application No. 1240 of 2018, the applicant has put a challenge to the summoning order dated 15.02.2015, which was passed by the Court of Special Judge/Magistrate, Kashipur, District Udham Singh Nagar in Criminal Complaint Case No. 2950 of 2013, M/s Prolific Papers Pvt. Ltd. Vs. Inderjeet Mehta and others. In the complaint proceeding, which was thus initiated under Section 138 of N.I. Act, by filing a complaint on 21.10.2013, in fact, it was the Directors who were impleaded as a party by name, but, however, the company itself i.e. M/s Crown Paper Distributors was not made as a party to the proceedings under Section 138 of N.I. Act. Hence, the learned counsel for the applicant submits that the summoning order, as issued on 15.02.2014 would be bad in the eyes of law, for the reason being, that the same would be in violation of the provisions contained under Section 141 of the N.I. Act.

4. In the connected C482 Application No. 1241 of 2018, it’s a complaint proceeding No. 2951 of 2013, M/s Prolific Papers Pvt. Ltd. Vs. Inderjeet Mehta and others, which was instituted by the complainant on 21.10.2013 being a complaint proceeding under Section 138 of N.I. Act, alleging thereof that the negotiable instrument, which has been issued by the company of which the present applicant was a Director, has been dishonored by the bank and hence 138 proceedings have been drawn, on which the summoning order has been issued on 15.12.2014. This order too has been contested by the learned counsel for the applicant on the ground that the same happens to be in violation of Section 141 of the N.I. Act.

5. Factually, it is contended by the learned counsel for the applicant in the C482 Application, that the complainant company i.e. M/s Prolific Papers Pvt. Ltd. was in a business transaction with the company named as M/s Crown Paper Distributors of which the present applicant contends that he was the partner of the said firm.

6. The complainant has submitted that owing to certain business transactions pertaining to the sale of papers, made by the complaint’s company, certain cheques were issued by M/s Crown Paper Distributors, which were, on its submission of the same for being encashed, the same were dishonored and ultimately upon it’s dishonor, the notices were issued and when the same was not responded back, the complaint proceedings were drawn against the present applicant.

7. It is contended by the applicant that the cheques which have been referred to in para 6 of the C482 Application were the cheques, which were issued by the Director of M/s Crown Paper Distributors in the name of the complainant and the dishonor of the cheques, due to insufficient funds, if at all if the proceedings under Section 138 of N.I. Act was to be drawn, it could have been drawn only after compliance with the provisions contained under Section 141 of N.I. Act.

8. The provisions contained under Section 141 of the N.I. Act provides that the person committing an offence under Section 138 of N.I. Act, if it is a company, every person, who at the time when the offence was committed by the incharge of the affairs of the company for the conduct of business of the company has had to be held to be guilty for the offence and shall be liable to be proceeded against to it and punished according