The Himachal Pradesh High Court allowed a petition, filed for quashing a complaint filed against the petitioner under Section 138 of the Negotiable Instruments Act and the consequent order summoning the accused. The Court observed that Section 141 of the Negotiable Instruments Act deals with the liability of the Company and provides that where the offense is committed by a Company, every person who, at the time the offense was committed, was in charge of, and was responsible to the Company for the conduct of its business as well as the company, shall be deemed to be guilty of the commission of the offense.
Brief Facts:
The complainant filed a complaint before the learned Trial Court against the petitioner and respondent no. 3 for the commission of an offence punishable under Section 138 read with Section 142 of the Negotiable Instruments Act. Accused no. 1 is the Chairman and accused no.2 is the Secretary of the Society. The Society had taken a loan of ₹ 1 lac from the complainant and assured him to return the same on demand. The complainant is an employee of the Society. The Society did not pay his salary for 14 months. The complainant requested the society to pay the money due to him and the Society issued a cheque for ₹ 5 lac in discharge of its legal liability. The complainant presented the cheque for its realisation but it was dishonoured. Hence, the complaint was filed for taking action against the accused. The learned Trial Court found sufficient reasons to summon the accused for the commission of an offense punishable under Section 138 of the Negotiable Instruments Act. Being aggrieved from the filing of the complaint and the order summoning the accused, the petitioner approached this Court.
Contentions of the Petitioner:
The Learned Counsel for the Petitioner submitted that the Society is a body corporate having its independent existence. As per the complaint, the loan was taken by the Society and the cheque was issued by the society. The Society is the primary accused but it was not arrayed as a party. The complaint against the petitioner and the accused no. 2 is not maintainable in the absence of a Company. Therefore, he prayed that the present petition be allowed
Contentions of the Respondent:
The Learned Counsel for the Respondent submitted that the Society is not a body corporate and the provisions of Section 141 of the Negotiable Instruments Act apply only to the body corporate; therefore, he prayed that the present petition be dismissed.
Observations of the Court:
The Court noted that Section 141 of the Negotiable Instruments Act deals with the liability of the Company and provides that where the offense is committed by a Company, every person who, at the time the offense was committed, was in charge of, and was responsible to the Company for the conduct of its business as well as the company, shall be deemed to be guilty of the commission of the offense. The submission that the prosecution of the Company is necessary before prosecuting its office bearers has to be accepted as correct.
The Court observed that the complainant could not have filed a complaint against the petitioner and respondent no. 3 without impleading the company as an accused. The prosecution of the petitioner in the absence of the Company is bad.
The decision of the Court:
The Himachal Pradesh High Court, allowing the petition, held that the complaint pending before the learned Additional Chief Judicial Magistrate against the petitioner and the consequent proceedings arising out of the same are ordered to be quashed qua the petitioner.
Case Title: Anjana Kumari v State of Himachal Pradesh
Coram: Hon’ble Justice Rakesh Kainthala
Case no.: Cr. MMO No. 1159 of 2022
Advocate for the Petitioner: Mr. R. L. Chaudhary
Advocate for the Respondents: Mr. Ajay Chandel and Mr. P. K. Bhatti
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