THE HONOURABLE SRI JUSTICE K.SURENDER CRIMINAL PETITION No.7040 OF 2019

O R D E R:

This Criminal Petition is filed by the petitioner/A-1, to quash the proceedings in C.C.No.70 of 2019, on the file of I Special Magistrate, Cyberabad at Hasthinapuram. The appellant is charged with the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘N.I.Act”).

2. Heard learned counsel for the petitioner and Sri M.Vivekananda Reddy, learned Assistant Public Prosecutor for the respondent – State. Perused the record.

3. The 2nd respondent/complainant filed the complaint on the ground that, towards discharge of debt of Rs.50,00,000/-(Rupees Fifty Lakhs only), the cheques in question bearing Nos.646238, 646239, 646278 and 646279, drawn on IDBI bank were issued in favour of the complainant.

4. As seen from the cheques, the same were issued by the Managing Partner, Dandamudi Bioteck, which is a partnership firm. However, the firm Dandamudi Bioteck is not arrayed as accused in the complaint. The petitioner was made an accused in his personal capacity.

5. Section 141 of N.I.Act reads as under:

“141. Offences by companies. —

(1)If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:

Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.

(2)Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.—

For the purposes of this section,—

(a)“company” means anybody corporate and includes a firm or other association of individuals; and (b)“director”, in relation to a firm, means a partner in the firm.”

6. As seen from the provision, the liability of the person, who is in charge of the firm or a company, would arise only when they are made vicariously liable on behalf of the firm or company. In the absence of making the company an accused, the question of making the persons, who are part of the company or firm, vicariously liable does not arise.

The issue is well settled.

7. The Hon’ble Supreme Court in Bijoy Kumar Moni vs. Paresh Manna & Anr, [2024 SCC online 3833], held as under:

“44.In yet one another decision of this Court in the case of N. Harihara Krishnan v. J. Thomas reported in (2018) 13 SCC 663, while dealing with the issue of commission of an offence under Section 138 of the NI Act by a company, the Court observed that Section 138 only contemplates the drawer of the cheque to be responsible for the commission of the offence. It is only by virtue of Section 141 that certain persons other than the drawer of the cheque can be made liable for the offence in cases where the offence under Section 138 is committed by a company and not an individual person. The Court, in the facts of the case before it, further held that the identity of the drawer of the cheque was appa