A director cannot be held liable under Section 138 of the Negotiable Instruments Act without specific averments in the complaint regarding their role in the company's affairs.

ORAL ORDER

1. By this application under Section 482 of the Code of Criminal Procedure, 1973 (for short, hereinafter referred to as `the Code’), the applicant seeks to quash and set aside Criminal Case No.1392 of 2016 pending before the learned Additional Chief Judicial Magistrate, Gondal, District Rajkot for the offence punishable under Section 138 of the Negotiable Instruments Act (for short, hereinafter referred to as `the Act’).

2. Rule returnable forthwith. Learned APP Mr. Pranav Dhagat waives service of notice of Rule on behalf of the respondent-State as well as learned advocate Ms.Priyal Shah waives service of notice of Rule on behalf of respondent No.2.

3. Considering the facts and circumstances of the case and with consent of the learned advocates for the respective parties, this matter is taken up for final disposal forthwith.

4. The brief facts of the case are as under: * The petitioner is a registered Company under The Company Law namely; M/s.Ashoka Multiyarn Mills Limited engaged in manufacturing of threads having its registered ofÏce at 6A, NICCO House 2, Hare Street, Kolkata. Respondent No.1 herein – original complainant has filed/instituted the impugned complaint against the applicant herein for the offence punishable u/s.138 of the Negotiable Instruments Act . Cheques bearing Cheque Nos.931146, 931147 and 931150 dated 22.2.2016, 22.2.2016 and 16.4.2016 of Rs.2,80,000/-, 3,59,041/- and Rs.4,00,000/- respectively for the total amount of Rs.10,39,041/- came to be dishonored. That in the said complaint, the learned trial Court has directed to issue summons against the applicant herein for the offence punishable u/s.138 of the Negotiable Instruments Act . Hence, the applicant herein – original accused has preferred the present application u/s.482 of the Code of Criminal Procedure to quash and set aside the impugned complaint / Criminal Case.

5. Learned advocate for the applicant has made the following submissions: * Learned advocate for the applicant submitted that the complaint under Section 138 was filed against the Company – M/s. Ashoka Multiyarn Mills Limited and subsequently name of Mr.Pawan Kumar Patodia was added as Director of the said Company. It is submitted that in the complaint, no such averments against the Director of the Company is made. Even the respondent has not issued any notice of demand against the Directors of the Company. Relying upon Sections 138 and 141 of the Act, it is submitted that no case is made out against the Directors of the Company and, therefore, the complaint is required to be quashed and set aside against Director. It is submitted that respondent No.1 was aware of the fact that all the transactions were made with M/s. Ashoka Multiyarn Mills Limited. It is further submitted that the complainant had not issued any legal notice under the law which is mandatory. To establish vicarious liability of Director of M/s. Ashoka Multiyarn Mills Limited should have been served with legal notice and should have been made a party to the proceedings before the Court of learned Judicial Magistrate First Class.

6. Learned advocate for the applicant has placed reliance upon the following decisions:

(1) S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and another reported in 2007(4) SCC 70 &

(2) Susela Padmavathy Amma v. M/s. Bharti Airtel Limited decided on 15.3.2024 by Division Bench of Hon’ble Supreme Court of India.

7. Per contra, learned advocate Mr. Pravin Gondaliya for respondent No.1 submits that pursuant to the transaction entered into with M/s. Ashoka Multiyarn Mills Limited, three Cheques bearing Cheque Nos.931146, 931147 and 931150 dated 22.2.2016, 22.2.2016 and 16.4.2016 of Rs.2,80,000/-, 3,59,041/- and Rs.4,00,000/- respectively for the total amount of Rs.10,39,041/- were issued. When those Cheques were presented in the Bank, all the Cheques were returned from the Bank with an endorsement `funds insufÏcient’ vide letter dated 13.4.2016.

8. Resultantantly, the respondent issued a notice under