Himachal Pradesh High Court
Dile Ram vs The Kangra Central Co-Operative Bank on 2 May, 2025
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Cr. Revision No. 166 of 2011
Reserved on: 25.03.2025
Date of Decision: 02.5.2025.
Dile Ram ...Petitioner
Versus
The Kangra Central Co-operative Bank, through
Its Branch Manager
...Respondent
Coram
Hon'ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting?1yes.
For the Petitioner : Mr. Sanjeev Kuthiala, Sr.
Advocate, with Ms. Amita
Chandel, Advocate.
For the Respondent : Mr. I.S. Chandel and Mr. Sohan
Singh Rathore, Advocates.
Rakesh Kainthla, Judge
The present revision is directed against the
judgment dated 30.06.2011, passed by learned Sessions
Judge, Kullu, H.P. (learned Appellate Court), vide which the
judgment of conviction and order of sentence dated
01.02.2011, passed by learned Judicial Magistrate, First Class
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
Manali, H.P. (learned Trial Court) were upheld (Parties shall
hereinafter be referred to in the same manner as they were
arrayed before the learned Trial Court for convenience.)
2. Briefly stated, the facts giving rise to the present
revision are that the complainant filed a complaint before the
learned Trial Court against the accused for the commission of
an offence punishable under Section 138 of the Negotiable
Instruments (NI) Act. It was asserted that the complainant is a
body corporate having its head office at Dharamshala and
Branch at Manali. It is engaged in the business of banking. The
accused raised a loan from the complainant and issued a
cheque dated 22.10.2007 for an amount of ₹ 1 lac to discharge
his liability. The complainant presented the cheque before the
bank of the accused, but it was dishonoured with an
endorsement of insufficient funds. The complainant issued a
notice to the accused asking him to pay the amount of ₹ 1 lac
within 15 days from the date of receipt of the notice. However,
the accused failed to pay the amount despite the receipt of the
notice. Hence, the complaint was filed before the learned Trial
Court to take action against the accused as per the law.
3. The learned Trial Court, found sufficient reasons to
summon the accused. When the accused appeared, a notice of
accusation was put to him for the commission of an offence
punishable under Section 138 of N. I Act, to which he pleaded
not guilty and claimed to be tried.
4. The complainant examined Man Singh (CW-1) and
Nitin Hazari (CW-2).
5. The accused admitted in his statement recorded
under Section 313 of Cr. P.C. that the complainant is engaged
in banking activities and Man Singh Thakur was authorised by
the complainant to file the complaint. He stated that he had
issued the cheque as security to M/s Chachoga Handloom
Co-operative Society. He admitted that the cheque was
dishonoured with an endorsement of 'insufficient funds'. He
stated that he had only received a notice from the Court. He
examined Luder Chand (DW-1)
6. Learned Trial Court held that the accused did not
dispute the issuance of the cheque. There is a presumption
that the cheque was issued in discharge of the legal liability. It
was proved that the accused is the Director of M/s Chachoga
Handloom Co-operative Society since its inception. The Society
had taken a loan of ₹ 47 lacs and was to pay ₹ 97 lacs.
Therefore, the cheque was issued in discharge of the legal
liability. It was dishonoured due to insufficient funds, and the
accused failed to pay the amount despite receipt of a valid
notice of the demand. Hence, the accused was convicted of
the commission of an offence punishable under Section 138 of
the NI Act and was sentenced to undergo simple imprisonment
for six months and pay a compensation of ₹ 1,50,000/- to the
complainant.
7. Being aggrieved by the judgments and order
passed by the learned Trial Court, the accused filed an appeal
which was decided by the learned Sessions Judge (learned
Appellate Court). Learned Sessions Judge concurred with the
findings of the learned Trial Court that the cheque is presumed
to be issued in the discharge of legal liability. The accused
failed to rebut the presumption of consideration attached to
the cheque. The cheque was dishonoured with an
endorsement of insufficient funds. The accused had failed to
pay the amount despite the receipt of a valid notice of
demand. Hence, the accused was rightly convicted and
sentenced. Consequently, the appeal filed by the accused was
dismissed.
8. Being aggrieved by the judgments and order
passed by the learned Courts below, the accused has filed the
present revision, asserting that the learned Courts below
returned the findings contrary to the evidence on record. They
misread and misappreciated the evidence and the statement
of the accused recorded under Section 313 of Cr.P.C. The
accused had categorically stated that the cheque was issued
to M/S Chachoga Handloom Society and not to the bank. A
bare perusal of the cheque shows that there is an interpolation
in the cheque, and the name of the payee was altered. Luder
Chand (DW-1) proved that the cheque was issued to the
Society and not to the bank. There was no valid service as the
notice was returned unserved. Learned Trial Court erred in
holding that the accused was the Director of the Society. The
sentence imposed by the learned Trial Court is excessive.
Therefore, it was prayed that the present revision be allowed
and the judgments and order passed by learned Courts below
be set aside.
9. I have heard Mr. Sanjeev Kuthiala, learned Senior
Advocate, assisted by Ms. Amita Chandel, learned counsel for
the petitioner and Mr. I.S. Chandel and Mr. Sohan Singh
Rathore, learned counsel for the respondent/complainant.
10. Mr. Sanjeev Kuthiala, learned Senior Advocate for
the petitioner/accused, submitted that the learned Courts
below erred in convicting and sentencing the accused. A bare
perusal of the cheque shows that there is an interpolation in
the name of the payee. The words 'KCC bank in the loan
account' were added subsequently to the cheque. This is a
material alteration in the cheque, which would make it void.
The findings recorded by the learned Trial Court that the loan
was due to the Society and the accused, being the Director, is
liable to pay the loan, are without any pleading. The Society
was never arrayed as an accused, and the present accused
could not have been held liable in the absence of the Society.
Hence, he prayed that the present revision be allowed and the
judgments and order passed by the learned Courts below be
set aside. He relied upon the judgments of Sumeti Vij v.
Paramount Tech Fab Industries, (2022) 15 SCC 689,
Rajesh Jain v. Ajay Singh, (2023) 10 SCC 148, K.N.
Beena v. Muniyappan, (2001) 8 SCC 458 and Mainuddin
Abdul Sattar Shaikh v. Vijay D. Salvi, (2015) 9 SCC 622
in support of his submission.
11. Mr. I.S. Chandel, learned counsel for the respondent/
complainant, submitted that the learned Courts below had
rightly appreciated the evidence. It was rightly held by the
learned Trial Court that Society was liable to pay money to the
complainant, and the accused, being the Director, had issued
the cheque to discharge the liability of the Society. The cheque
was dishonoured with an endorsement of insufficient funds,
and the accused failed to pay the amount despite receipt of a
valid notice of demand. Hence, he prayed that the present
petition be dismissed. He relied on S.M.S. Pharmaceuticals
Ltd. v. Neeta Bhalla, (2005) 8 SCC 89 and Mohd. Isaq
Gulsani v. J. Rajamouli, 2000 SCC OnLine AP 631 in
support of his submission.
12. I have given considerable thought to the
submissions made at the bar and have gone through the
records carefully.
13. It was laid down by the Hon'ble Supreme Court in
Malkeet Singh Gill v. State of Chhattisgarh, (2022) 8
SCC 204: (2022) 3 SCC (Cri) 348: 2022 SCC OnLine SC
786 that the revisional court is not an appellate court and it
can only rectify the patent defect, errors of jurisdiction or the
law. It was observed on page 207: -
"10. Before adverting to the merits of the contentions,
at the outset, it is apt to mention that there are
concurrent findings of conviction arrived at by two
courts after a detailed appreciation of the material and
evidence brought on record. The High Court in criminal
revision against conviction is not supposed to exercise
the jurisdiction like the appellate court, and the scope of
interference in revision is extremely narrow. Section 397
of the Criminal Procedure Code (in short "CrPC") vests
jurisdiction to satisfy itself or himself as to the
correctness, legality or propriety of any finding,
sentence or order, recorded or passed, and as to the
regularity of any proceedings of such inferior court. The
object of the provision is to set right a patent defect or
an error of jurisdiction or law. There has to be a well-
founded error which is to be determined on the merits of
individual cases. It is also well settled that while
considering the same, the Revisional Court does not
dwell at length upon the facts and evidence of the case
to reverse those findings.
14. This position was reiterated in State of Gujarat v.
Dilipsinh Kishorsinh Rao, 2023 SCC OnLine SC 1294,
wherein it was observed:
"13. The power and jurisdiction of the Higher Court
under Section 397 Cr. P.C., which vests the court with
the power to call for and examine records of an inferior
court, is for the purposes of satisfying itself as to the
legality and regularity of any proceeding or order made
in a case. The object of this provision is to set right a
patent defect or an error of jurisdiction or law or the
perversity which has crept into such proceedings. It
would be apposite to refer to the judgment of this court
in Amit Kapoor v. Ramesh Chandra, (2012) 9 SCC
460, where the scope of Section 397 has been
considered and succinctly explained as under:
"12. Section 397 of the Code vests the court with
the power to call for and examine the records of an
inferior court for the purposes of satisfying itself as
to the legality and regularity of any proceedings or
order made in a case. The object of this provision is
to set right a patent defect or an error of jurisdiction
or law. There has to be a well-founded error, and it
may not be appropriate for the court to scrutinise
the orders, which, upon the face of it, bear a token
of careful consideration and appear to be in
accordance with the law. If one looks into the
various judgments of this Court, it emerges that the
revisional jurisdiction can be invoked where the
decisions under challenge are grossly erroneous,
there is no compliance with the provisions of law,
the finding recorded is based on no evidence,
material evidence is ignored or judicial discretion is
exercised arbitrarily or perversely. These are not
exhaustive classes but are merely indicative. Each
case would have to be determined on its own
merits.
13. Another well-accepted norm is that the
revisional jurisdiction of the higher court is a very
limited one and cannot be exercised in a routine
manner. One of the inbuilt restrictions is that it
should not be against an interim or interlocutory
order. The Court has to keep in mind that the
exercise of revisional jurisdiction itself should not
lead to injustice ex facie. Where the Court is dealing
with the question as to whether the charge has
been framed properly and in accordance with law in
a given case, it may be reluctant to interfere in the
exercise of its revisional jurisdiction unless the case
substantially falls within the categories aforestated.
Even framing of charge is a much-advanced stage
in the proceedings under the CrPC."
15. The present revision has to be decided as per the
parameters laid down by the Hon'ble Supreme Court.
16. A perusal of the cheque (Ex. CW1/B) shows that it
has been issued in the name of Chahoga H/L Co-operative
Society Ltd. The words "KCC bank" in the loan account have
been added above the name of the payee. These words are
written in different ink and handwriting, as is apparent from a
simple review of the cheque. Maan Singh Thakur (CW-1) has
not explained who wrote these words.
17. It was held in Narayan Prasad Rai v.
Ghanshyamlal, 1960 SCC OnLine MP 141: ILR 1960 MP
999: AIR 1961 MP 62 at page 1002 that any material
alteration will make the instrument void. It was observed:
"Section 87 of the Negotiable Instruments Act is as
follows:
"Any material alteration of a negotiable instrument
renders the same void as against anyone who is a
party thereto at the time of making such alteration
and does not consent thereto.
The plain meaning of this section, as it stands, is that if
any material alteration is found in a negotiable
instrument, the instrument itself becomes void, and the
party basing its claim upon it is precluded from claiming
anything. This result follows irrespective of the fact
whether the party concerned was responsible for the
alteration or whether it was made by someone else
without their consent or knowledge. This interpretation
of the provision is hard on the innocent holder of the
instrument. On the other hand, Shri R.K. Pandey
contends that section 87 is attracted only if the
alteration has been proved to have been made by the
holder himself, and this fact must be pleaded and
proved by the defendant. He went to the length of
saying that in the instant case, even if the alteration had
been made by the minor's next friend or guardian, it
would not affect the claims of the minor. This
interpretation is too narrow and is not justified by the
wording of section 87.
In our opinion, the correct interpretation of section 87 of
the Negotiable Instruments Act is that the alteration
which has the effect of making the instrument void
should have been brought about by the plaintiff or by
anyone with his consent or on account of his negligence.
If the alteration is brought about by an accident, or by
some stranger who came in possession of the
instrument in an unauthorised manner, then the
instrument would not be rendered void."
18. It was further held that the burden to prove that the
alteration was made by the signatory is upon the holder of the
instrument. It was observed:
"Shri R.K. Pandey contended that it was necessary for
the defendant to plead that the alteration was brought
about by the plaintiff himself or by someone with his
consent. In the absence of such pleadings, no relief
should be granted to the defendant on the ground that
the instrument has been materially altered. We find that
the law on the point is just the contrary, as would appear
from the following passage occurring in Bhashyam's
Negotiable Instruments Act (Tenth Edn., 1956) at
page 452:
"Where the instrument appears to be altered, it is
incumbent upon the plaintiff (i.e. the holder) to
show that the alteration is not improperly made,
and the presumption in the case of negotiable
instruments is that the alteration was made
subsequent to the issue of the instrument; while in
the case of deeds, etc., the presumption is the
other way. Where a bill appears to have been
altered, or there are marks of erasure on it, the
party seeking to enforce the instrument is bound
to give evidence that it is not avoided thereby."
The burden of pleading or proving how the alteration
came in the instrument is thus on the plaintiff.
In Petamber Manik-Jee v. Motee-Chund Manik-
Jee [(1836-37) 1 Moo IA 420.] the following
observations were made regarding the burden of proof
in such cases:
"If a plaintiff relies on a bond in this country, or
any other instrument, which appears to have been
altered, the Court will not receive it, or act upon it,
till it is most satisfactorily proved by all the
subscribing witnesses at the least, and other
evidence, that alteration was made antecedently
to Signature."
The obvious implication of these observations is that if
no such proof is forthcoming, the alteration shall be
presumed to have been made after the instrument was
executed. To the same effect is the following passage
in Mst. Khoob Conwur v. Baboo Moodnarain
Singh [(1861-64) 9 Moo IA 1.].
"It may be conceded chat, in an ordinary case, the
party who presents an instrument, which is an
essential part of his case, in an apparently altered
and suspicious state, must fail, from the mere
infirmity or doubtful complexion of his proof,
unless he can satisfactorily explain the existing
state of the document."
Although their Lordships held that the presumption may
be rebutted by the appearance of the document itself,
but the principle laid down obviously is that he who
produces an altered document must prove how the
alteration was made.
The same view has been consistently taken by this
Court. In Kanhayalal v. Sitaram [20 NLR 76], it was
held that a material alteration made by, or with the
consent of, one party, but without the consent of the
other party, makes the instrument void and disentitles
the party responsible for the alteration from enforcing it.
The Court observed in that case that where the plaintiff
relies upon an altered or suspicious instrument, "the law
casts a heavy onus on him to explain the alteration and
to show when it was made". The following observations
from Halsbury's Laws of England, Volume 10,
sections 764 and 765, at page 431, were relied upon:
"An alteration made while the instrument is in the
custody of one parry, not made with his knowledge or
consent, has the same effect in avoiding the
instrument as if made by him, on the principle that he
who has the custody of an instrument made for his
benefit is hound to preserve it in its original state."
In Pachkodi's case (supra), the same view has been
taken regarding the burden of proof by observing that:
"These documents were altered in his possession
and were produced from his custody. He had to
explain when and how the alteration was made."
We have no doubt that the burden of proving how the
alterations were made in the document lies on the
plaintiff, and in the absence of any proof, it should be
presumed that they were made by him or by his next
friend, who was in custody of the document. The view
which we have taken does not go against the Madras
decisions relied upon by the appellant. Although the
single Judge had stated his conclusion somewhat widely,
the Division Bench definitely concluded that the
instrument would be saved from becoming void only if
the material alteration was made by a stranger without
the consent of the holder. In that case, the natural
father, who was suspected to have made the changes,
was a stranger inasmuch as the pro-note was in favour
of the adoptive father, and the adoptive mother was
acting as the legal guardian. In the instant case, the pro-
note has all along been in the custody of the minor
plaintiff's father, who also acted as the next friend of the
minor when the suit was filed. Under these
circumstances, according to the statement of law quoted
from Halsbury's Laws of England in paragraph 13 above,
the presumption that the alteration was made by the
plaintiff's father or by someone with his consent had to
be rebutted by the plaintiff."
19. It was held in C. Sonamuthu v. R. Barsha Beevi,
2013 SCC OnLine Mad 386: (2013) 1 MWN (Cri) DCC 113
that any material alteration in the instrument will make it void.
It was observed:
16. At this juncture, this Court aptly quotes the
decision, T. Kalavathi v. Veera Export, 2002 BC
1247 Mad., wherein it is held that "where material
alteration made by the Accused in Negotiable
Instruments Act, after the expiry of the period of validity,
it would render the said instruments void, hence the
Complaint on the basis of invalid, Negotiable
Instruments Act could not be maintained."
17. The effort of Section 87 of the Negotiable
Instruments Act is that such a document is void and as
such non-est. The technical defence or absence of a plea
should not drive the Court on such occasion, especially
with reference to the contention and evidence.
18. Ordinarily, any material alteration of a Negotiable
Instrument renders the same void as against anyone
who is a party thereto at the time of making such
alteration and does not consent thereto, unless it was
made in order to carry out the common intention of the
original parties. Any such alteration, if made by an
endorsee, discharges his endorser from all liability to
him/her in respect of the consideration thereof in the
considered opinion of this Court.
20. It was held that an alteration in the Negotiable
Instruments Act, if it changes its legal character, is a material
alteration. It was observed:
"24. An alteration of a Negotiable Instrument is material
if it changes its legal character or its scope as means of
evidence, in the considered opinion of this Court.
Integrity and sanctity of contracts are to be preserved,
and the object is to prevent fraud and deter persons
from tampering with the written instruments. Where an
instrument appears altered, it is the primordial duty on
the part of the Plaintiff to show that the alteration was
not improperly made as per the decision in Jayantilal
Goel v. Zubeda Khanum, AIR 1986 AP 120.
xxxxxx
26. In law, the following are declared to be Material
Alterations:
(i) the date, (ii) the sum payable, (iii) the time of
payment, (iv) the place of payment, (v) the
addition of a place of payment mentioned by the
acceptor without the acceptor's consent."
Therefore, the burden was upon the complainant
to prove that the alteration was made by the
accused. Once it is apparent that the words have
been added to the name of the payee.
21. It was laid down in Geemol Joseph v.
Kousthabhan, 2019 SCC OnLine Ker 2465, that the
alteration in the name of the payee is a material alteration. It
was observed:
14. On a perusal of Ext.P1 cheque, it is seen that the
name "Kousthubhan" (the name of the accused) was
initially written as the name of the payee. It is seen that
the name of the payee, written as "Kousthubhan", is
struck off, and the name of the complainant is written in
the cheque as the payee. Therefore, it is evident that
there was alteration made in the cheque with regard to
the name of the payee. The question is whether it is a
material alteration or not.
15. A material alteration, varies the rights, liabilities, or
legal position of the parties as ascertained by the deed
in its original state, or otherwise varies the legal effect
of the instrument as originally expressed, or reduces to
certainty some provision which was originally
unascertained and as such void, or which may otherwise
prejudice the party bound by the deed as originally
executed (See Loonkaran Sethia v. Ivan E.
John : (1977) 1 SCC 379: AIR 1977 SC 336).
16. Alteration of the payee's name in a cheque is
material which affects the character of the instrument,
and so also the relationship of the parties and their legal
position as originally expressed. Therefore, it has to be
concluded that material alteration of Ext.P1 cheque was
effected with regard to the name of the payee.
17. Section 87 of the Act reads as follows:
"87. Effect of material alteration - Any material
alteration of a negotiable instrument renders the
same void as against any one who is a party thereto
at the time of making such alteration and does not
consent thereto, unless it was made in order to carry
out the common intention of the original parties.
Alteration by indorsee - Any such alteration, if made
by an indorsee, discharges his indorser from all
liability to him in respect of the consideration thereof.
The provisions of this section are subject to those of
Sections 20, 49 and 86 and 125.
18. The party who consents to the alteration, as well as
the party who made the alteration, are not entitled to
complain against such alteration. If the drawer of the
cheque himself altered the cheque, he cannot take
advantage of it later by saying that the cheque became
void as there is a material alteration thereto. Even if the
payee or the holder of the cheque made the alteration
with the consent of the drawer thereof, such alteration
also cannot be used as a ground to resist the right of the
payee or the holder thereof. It is always a question of
fact whether the alteration was made by the drawer
himself or whether it was made with the consent of the
drawer. It requires evidence to prove the aforesaid
question whenever it is disputed (See Veera
Exports v. Kalavathy : (2002) 1 SCC 97: AIR 2002
SC 38).
22. Therefore, the cheque became enforceable because
of the material alteration in it.
23. Man Singh Thakur (CW1) stated in his cross-
examination that the accused had taken the loan in the name
of the Society, which is to be repaid. He stated that the
accused has to pay ₹ 95 lacs to the complainant. He stated
that the accused is a member of the Managing Committee of
the Society and the authorised signatory.
24. The cross-examination of the witness shows that
the accused had issued the cheque towards the liability of the
Society because he is a member of the Managing Committee.
Learned Trial Court also held that the accused is a Director and
therefore, liable by his position to repay the amount.
25. It was suggested to Luder Chand (DW-1) that the
Society had taken a loan from the KCC bank worth ₹ 47 lacs.
He also admitted that the accused is the President of the
Society, and he is managing the affairs of the society. It was
also suggested to him that the accused had issued a cheque
for the payment of the dues of the Society.
26. The cross-examination of the witness shows that
the complainant has come forward with the case that the
accused had issued the cheque to discharge the legal liability
of the Society and not his individual liability.
27. The complaint does not mention that the loan was
taken by the Society, and the accused is the authorised
signatory of the Society; rather, it mentions in para-3 that the
accused had raised a loan from the bank and issued a cheque
amounting to ₹ 1 lac. Thus, as per the complaint, the loan was
taken by the accused individually, and he was not held liable
as an authorised signatory of the Society. Therefore, the
findings recorded by the learned Trial Court that the accused is
liable being the authorised signatory/Director is not
sustainable.
28. Admittedly, the society was not arrayed as a party.
The Society is a juristic person under the H.P. Co-operative
Societies Act. It was laid down by the Hon'ble Supreme Court
in Aneeta Hada v. Godfather Travels & Tours (P) Ltd.,
(2012) 5 SCC 661 that it is not permissible to prosecute the
Directors in the absence of the Company. It was observed that
"58. Applying the doctrine of strict construction, we are
of the considered opinion that the commission of the
offence by the company is an express condition
precedent to attract the vicarious liability of others.
Thus, the words "as well as the company" appearing in
the section make it unmistakably clear that when the
company can be prosecuted, then only the persons
mentioned in the other categories could be vicariously
liable for the offence, subject to the averments in the
petition and proof thereof. One cannot be oblivious to
the fact that the company is a juristic person and it has
its respectability. If a finding is recorded against it, it
would create a concavity in its reputation. There can be
situations when the corporate reputation is affected
when a Director is indicted.
59. In view of our aforesaid analysis, we arrive at the
irresistible conclusion that for maintaining the
prosecution under Section 141 of the Act, arraigning of a
company as an accused is imperative."
29. This judgment was followed by the Hon'ble Supreme
Court in Charanjit Pal Jindal v. L.N. Metalics, (2015) 15
SCC 768: 2015 SCC OnLine SC 1033, and it was held:
"11. From the aforesaid finding, we find that after
analysing all the provisions and having noticed the
different decisions rendered by this Court, the three-
judge Bench arrived at the irresistible conclusion that
for maintaining the prosecution under Section 141 of the
Act, arraigning a company as an accused is imperative.
Hence, in this case, we find no reason to refer the
matter to the larger Bench.
12. In the present case, only the appellant was
impleaded as an accused. In that view of the matter, we
are of the view that the complaint with respect to the
offence under Section 138 read with Section 141 of the
Act was not maintainable following the decision
in Aneeta Hada [Aneeta Hada v. Godfather Travels
& Tours (P) Ltd., (2012) 5 SCC 661: (2012) 3 SCC
(Civ) 350: (2012) 3 SCC (Cri) 241]. We set aside the
judgment dated 17-4-2010 passed by the trial court, the
order dated 27-5-2011 passed by the appellate court
and the impugned judgment dated 9-11-2012 passed by
the High Court of Orissa, Cuttack in Charanjit Pal
Jindal v. L.N. Metalics [Charanjit Pal Jindal v. L.N.
Metalics, Criminal Revision No. 467 of 2011,
decided on 9-11-2012 (Ori)]. The appellant stands
acquitted."
30. This position was reiterated in Himanshu v. B.
Shivamurthy, (2019) 3 SCC 797: 2019 SCC OnLine SC
83, and it was held:
"13. In the absence of the company being arraigned as
an accused, a complaint against the appellant was
therefore not maintainable. The appellant had signed
the cheque as a Director of the company and for and on
its behalf. Moreover, in the absence of a notice of
demand being served on the company and without
compliance with the proviso to Section 138, the High
Court was in error in holding that the company could
now be arraigned as an accused."
31. This position was reiterated in Pawan Kumar Goel
v. State of U.P., 2022 SCC OnLine SC 1598, and it was
held:
"31. This Court has been firm with the stand that if the
complainant fails to make specific averments against
the company in the complaint for the commission of an
offence under Section 138 of the NI Act, the same
cannot be rectified by taking recourse to general
principles of criminal jurisprudence. Needless to say, the
provisions of Section 141 impose vicarious liability by
deeming a fiction which presupposes and requires the
commission of the offence by the company or firm.
Therefore, unless the company or firm has committed
the offence as a principal accused, the persons
mentioned in sub-sections (1) and (2) would not be
liable to be convicted based on the principles of
vicarious liability."
32. Therefore, in view of the binding precedents of the
Hon'ble Supreme Court, the prosecution of the Society is
necessary before the accused can be held vicariously liable.
Since Society has not been arrayed as the accused, therefore,
the accused cannot be held vicariously liable.
33. Learned Courts below did not have the advantage
of the judgment of the Hon'ble Supreme Court in Anita Hada
(supra) and could not consider whether the petitioner/accused
could be held liable in the absence of Society. Hence, they
committed a jurisdictional error while convicting and
sentencing the accused. Such an error can be corrected in the
exercise of revisional jurisdiction.
34. The judgment of the Andhra Pradesh High Court in
Moh. Isaq Gulsani (supra) will not help the
respondent/complainant because this judgment is contrary to
the judgment of the Hon'ble Supreme Court in Anita Hada
(supra). Hence, no advantage can be derived from the said
judgment.
35. Thus, the learned Courts below erred in holding the
accused liable for the commission of an offence punishable
under Section 138 of the NI Act and sentencing him to undergo
simple imprisonment for six months and to pay of ₹ 1.50 lacs,
compensation. Hence, the judgments and order passed by the
learned Court below are not sustainable.
36. Consequently, the present petition is allowed and
the petitioner/accused is acquitted of the commission of an
offence punishable under Section 138 of the N I Act. The fine
amount, if deposited by the accused, be refunded to him after
the expiry of the statutory period of limitation in case no
appeal is preferred, and in case of appeal, the same be dealt
with as per orders of the Hon'ble Apex Court.
37. In view of the provisions of Section 437-A of the
Code of Criminal Procedure [Section 481 of Bharatiya Nagarik
Suraksha Sanhita, 2023 (BNSS)], the petitioner/accused is
directed to furnish his personal bond in the sum of ₹25,000/-
with one surety in the like amount to the satisfaction of the
learned Registrar (Judicial) of this Court/learned Trial Court,
within four weeks, which shall be effective for six months with
stipulation that in the event of Special Leave Petition being
filed against this judgment, or on grant of the leave, the
petitioner/accused, on receipt of notice(s) thereof, shall appear
before the Hon'ble Supreme Court.
38. A copy of this judgment, along with the records of
the learned Trial Court, be sent back forthwith. Pending
miscellaneous application(s), if any, also stand(s) disposed of.
(Rakesh Kainthla)
Judge
02 May,2025 (G.M)
