Vijaykumar Dineshchandra Agarwal vs Sankar Padam Thapa

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(Megh) 89

HIGH COURT OF MEGHALAYA AT SHILLONG
W. Diengdoh, J.
Vijaykumar Dineshchandra Agarwal - Appellant
Versus
Sankar Padam Thapa - Respondent
Crl. Petn. No. 31 of 2019
Decided On : 21-11-2022

Advocates appeared:
Mr. H. L. Shangreiso Sr. Adv. with Mr. A. Syiem, Advocate., for the Petitioner; Mr. A. Khan, Advocate., for the Respondent No. 1

Headnote:
Quashing of Proceedings - Summary of Acts and Sections: Section 138 and 141 of the Negotiable Instruments Act, 1881 - The court discussed the provisions of Section 138 and 141 of the Negotiable Instruments Act, which require specific averments in the complaint to establish vicarious liability. The court also considered the legal entity status of a Trust and the requirement to implead the Trust as an accused in the complaint. The judgment highlighted the need for specific averments to establish the liability of individuals connected with a company or Trust under Section 141 of the Act.
Fact of the Case:
The petitioner sought to quash the proceedings in a criminal case pending before the Court of the Judicial Magistrate, Shillong, under Section 482 Cr.PC. The petitioner, as Chairman of the Orion Education Trust, was accused of issuing a dishonored cheque. The petitioner contended that the Trust should have been impleaded as an accused and that the complaint failed for non-joinder of necessary parties.
Finding of the Court:
The court found that the complaint failed to establish that the petitioner was in charge and responsible for the conduct of the Trust's business, as required by Section 141 of the Negotiable Instruments Act. The court also held that the Trust should have been impleaded as an accused in the complaint. Consequently, the court quashed the proceedings in the criminal case.
Issues: The issues included the non-joinder of necessary parties in the complaint, the requirement for specific averments to establish vicarious liability under Section 141 of the Negotiable Instruments Act, and the legal entity status of a Trust under the Act.
Ratio Decidendi: The court's decision was based on the failure of the complaint to establish the petitioner's liability under Section 141 of the Act and the failure to implead the Trust as an accused. The judgment emphasized the need for specific averments to establish vicarious liability and the requirement to implead the Trust as an accused in the complaint.
Final Decision: The petition was allowed, and the proceedings in the criminal case were set aside and quashed. Each party was ordered to bear their own costs.

JUDGMENT

1. The petitioner has come before this Court with this application under Section 482 Cr.PC seeking to quash the proceedings in Criminal Case No. 44(S) of 2019 pending before the Court of the Judicial Magistrate, Shillong.

2. The petitioner is a permanent resident of Lalpura, Rampara, Nava Yard, Chhani Road, Nizampura, District, Vadodara, Gujarat and is the Chairman of the Orion Education Trust.

3. It is the case of the petitioner that the William Carey University a State recognized Private University, sponsored/owned by the ACTS Group of Institutions, was facing severe financial crisis has accordingly entered into an understanding with the Orion Education Trust to hand over the management and administration of the said University to the Trust. A Memorandum of Understanding dated 12.10.2017 was drawn up in this regard.

4. The petitioner as the Chairman of the Orion Education Trust has also issued authorization letter to all concerned to the effect that the respondent herein was duly entrusted with the task to Liaison with governmental authorities and to undertake such activities, so as to facilitate the effective transition of all administrative control from Agriculture Crafts Trades and Studies (ACTS). For his services, the respondent would be paid by the petitioner.

5. The petitioner has then stated that the respondent has alleged that the petitioner has issued a cheque for Rs. 5,00,000,000/- (Rupees five crore) only bearing No. 000013 dated 13.10.2018 drawn on Kotak Mahindra Bank, Vadodara Branch in favour of the respondent for services rendered. The respondent has also deposited the said cheque in his ICICI Bank account, at Laitumkhrah, Shillong, East Khasi Hills on 07.12.2018, but the cheque was dishonored with the endorsement 'Insufficient funds'.

6. The respondent then caused issue of a demand notice under Section 138 of the Negotiable Instrument Act (N.I. Act) on 19.12.2018, the said notice being sent by registered post AD which was received by the petitioner on 27.12.2018.

7. The respondent then filed the complaint case before the Court of the Judicial Magistrate First Class, Shillong registered as C.R. Case No. 44(S) of 2019 for the offence under Sections 138 and 142 of the Negotiable Instruments Act as well as under Section 420 IPC.

8. The petitioner has also averred that in response to the notice issued by the respondent under Section 138 N.I. Act, the petitioner has replied to the same on 21.12.2018 stating specifically that since the respondent was allowed to look after the affairs of the Trust, for the purpose of expending the day-to-day requirements of the Trust. In this connection, the petitioner has issued several blank signed cheques to the respondent.

9. The petitioner was however surprised to receive a message from the Kotak Mahindra Bank on 08.12.2018 informing him of cheque for rupees five crore was deposited in the Bank by the respondent. The Bank was immediately requested to stop payment of the same.

10. The petitioner has reiterated that the said cheque was never issued to the respondent, but that he has misused the blank cheques given to him for another purpose as aforesaid. In the said notice dated 21.12.2018, the respondent was also requested to return the said cheque, but he did not response to the notice.

11. The petitioner then lodged an FIR against the respondent on 05.05.2019 before the Gotri Police Station, Vadodara which was registered as C.R. No 1-70 of 2019 under Section 406/420/465/467/471/506(2) and 511 IPC.

12. The petitioner has then entered appearance before the Court of the Judicial Magistrate at Shillong in the said case filed by the respondent and has raised the issue of maintainability for non-joinder of necessary parties.

13. Heard Mr. H.L. Shangreiso, learned Sr. counsel for the petitioner who has contended that the petitioner as Chairman of the said Orion Education Trust simply discharged his duties as such and not in his personal capacity, non impleadment of the Trust as a party to