Jharkhand High Court
Ajay Kumar Agarwal @ Ajay Kr. Agarwal vs The State Of Jharkhand on 1 May, 2024
Author: Anil Kumar Choudhary
Bench: Anil Kumar Choudhary
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr.M.P. No.2771 of 2022
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Ajay Kumar Agarwal @ Ajay Kr. Agarwal, aged about 50 years, S/o
Laxman Agarwal R/o Plot No. A-17, City Centre, Sector 4, PO & PS
Sector 4, District Bokaro, Jharkhand, 827004. ... Petitioner
Versus
1. The State of Jharkhand
2. Rishi Prasad, S/o Sri Harihar Prasad, R/o C/o R.R. Tripathi, Plot
No.F9, City Centre, PO & PS Sector 4, District Bokaro, Jharkhand,
827004 ... Opposite Parties
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For the Petitioner : Mr. Baibhaw Gahlaut, Advocate
For the State : Mr. Shailendra Kr. Tiwari, Spl.P.P.
For the O.P. No.2 : Mr. Mukesh Kumar, Advocate
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PRESENT
HON'BLE MR. JUSTICE ANIL KUMAR CHOUDHARY
By the Court:- Heard the parties.
2. This Criminal Miscellaneous Petition has been filed invoking the
jurisdiction of this Court under Section 482 of the Code of Criminal Procedure
with a prayer for quashing the entire criminal proceeding arising out of the
order dated 12.07.2018 passed by learned J.M.F.C., Bokaro in connection with
Complaint Case No.331 of 2018 by which learned J.M.F.C., Bokaro has taken
cognizance of the offence punishable under Section 138 of Negotiable
Instrument Act, 1881 against the petitioner only.
3. The brief facts of the case is that the petitioner took a friendly loan of
Rs.2,00,000/- and issued a cheque on behalf of the partnership firm in the name
and style of M/s New Saree Sangam, in the capacity of authorized signatory of
the said partnership firm. The cheque was presented by the complainant-
opposite party No.2 in the bank and on 02.02.2018, the cheque was
dishonoured due to insufficiency of fund in the said bank account of the
partnership firm in the name and style of M/s. New Saree Sangam. The
complainant- opposite party No.2 issued a notice of demand dated 19.02.2018,
by registered post. Though the same was received by the petitioner but the
petitioner did not pay the cheque amount within 15 days of the receipt of such
notice of demand and the complainant instead of arraying the partnership firm
in the name and style of M/s. New Saree Sangam as an accused filed the
complaint case only against the petitioner; in his personal capacity. Consequent
upon that, vide order dated 12.07.2018 in Complaint Case No.331 of 2018,
learned J.M.F.C., Bokaro took cognizance against the petitioner under Section
138 of Negotiable Instrument Act, 1881.
4. Learned counsel for the petitioner relies upon the judgment of the
Hon'ble Supreme Court of India in the case of the Dilip Hiraramani vs Bank of
Baroda reported in 2022 0 Supreme (SC) 417 paragraph-14 of which, reads as
under:-
"14. The provisions of Section 141 impose vicarious liability
by deeming 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-section (1) or (2) would not be liable
and convicted as vicariously liable. Section 141 of the NI Act
extends vicarious criminal liability to officers associated with the
company or firm when one of the twin requirements of Section 141
has been satisfied, which person(s) then, by deeming fiction, is made
vicariously liable and punished. However, such vicarious liability
arises only when the company or firm commits the offence as the
primary offender. This view has been subsequently followed in
Sharad Kumar Sanghi v. Sangita Rane, 17[(2015) 12 SCC 781 :
"11. In the case at hand as the complainant's initial statement
would reflect, the allegations are against the Company, the
Company has not been made a party and, therefore, the allegations
are restricted to the Managing Director. As we have noted earlier,
allegations are vague and in fact, principally the allegations are
against the Company. There is no specific allegation against the
Managing Director. When a company has not been arrayed as a
party, no proceeding can be initiated against it even where vicarious
liability is fastened under certain statutes. It has been so held by a
three-Judge Bench in Aneeta Hada v. Godfather Travels and Tours
(P) Ltd. in the context of the Negotiable Instruments Act, 1881."]
Himanshu v. B. Shivamurthy and Another, 18[(2019) 3 SCC 797 :
"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."] and
Hindustan Unilever Limited v. State of Madhya Pradesh19[(2020)
10 SCC 751 : "23. Clause (a) of sub-section (1) of Section 17 of the
Act makes the person nominated to be in charge of and responsible
to the company for the conduct of business and the company shall be
guilty of the offences under clause (b) of sub-section (1) of Section
17 of the Act. Therefore, there is no material distinction between
Section 141 of the NI Act and Section 17 of the Act which makes the
company as well as the nominated person to be held guilty of the
offences and/or liable to be proceeded and punished accordingly.
Clauses (a) and (b) are not in the alternative but conjoint. Therefore,
in the absence of the company, the nominated person cannot be
convicted or vice versa. Since the Company was not convicted by
the trial court, we find that the finding of the High Court to revisit
the judgment will be unfair to the appellant nominated person who
has been facing trial for more than last 30 years. Therefore, the order
of remand to the trial court to fill up the lacuna is not a fair option
exercised by the High Court as the failure of the trial court to
convict the Company renders the entire conviction of the nominated
person as unsustainable."]. The exception carved out in Aneeta
Hada (supra), 20[The exception would be when the company itself
has ceased to exist or cannot be prosecuted due to a statutory bar.]
which applies when there is a legal bar for prosecuting a company or
a firm, is not felicitous for the present case. No such plea or
assertion is made by the respondent." (Emphasis supplied)
and submits that in the absence of partnership firm being arrayed as an
accused, the petitioner having signed the cheque as an authorized signatory of
the firm on its behalf, in the absence of notice of demand being served upon
the partnership firm in the name and style of M/s. New Saree Sangam, and
thus without compliance of the proviso to Section 138 of Negotiable Instrument
Act, learned J.M.F.C, Bokaro, the learned Magistrate has committed gross error
in taking the cognizance of the offence punishable under Section 138 of the
Negotiable Instrument Act, 1881 against the petitioner only, hence, it is
submitted that the entire criminal proceeding arising out of the order dated
12.07.2018 passed by learned J.M.F.C., Bokaro in connection with Complaint
Case No.331 of 2018, be quashed and set aside.
5. Learned Addl. PP appearing for the State and the learned counsel for the
opposite party No.2 on the other hand, vehemently opposes the prayer for
quashing the entire criminal proceeding arising out of the order dated
12.07.2018 passed by learned J.M.F.C., Bokaro in connection with Complaint
Case No.331 of 2018 and submits that the facts of the case of Dilip Hiraramani
vs Bank of Baroda (supra) is entirely different from the facts of this case, in the
sense that in this case, petitioner himself took the friendly loan in her personal
capacity hence, the ratio of Dilip Hiraramani vs Bank Of Baroda (supra) is not
applicable to the facts of this case, hence, this criminal miscellaneous petition
being without any merit be dismissed.
6. Having heard the rival submissions made at the Bar and after going
through the materials in the record, it is pertinent to mention here that the
corollary of the judgment passed by the Hon'ble Supreme Court of India in the
case of Dilip Hiraramani vs Bank of Baroda (supra), is that in case, a cheque is
issued on behalf of the partnership firm by its authorized signatory, then the
notice demanding payment of money mentioned in the cheque, by giving
notice in writing to the partnership firm is also a sine qua non and arraying the
partnership firm as an accused, is also, the requirement of law and the
complainant having not done neither, so this court has no hesitation in holding
that the order taking cognizance dated 12.07.2018, only against the petitioner in
his individual capacity, though the cheque was admittedly not issued by him in
his individual capacity, rather as an authorized signatory of the partnership
firm, is not sustainable in law. Therefore, the continuation of the same will
amount to abuse of process of law, and this is a fit case where the entire
criminal proceeding arising out of the order dated 12.07.2018 passed by learned
J.M.F.C., Bokaro in connection with Complaint Case No.331 of 2018, be
quashed and set aside.
7. Accordingly, the entire criminal proceeding arising out of the order
dated 12.07.2018 passed by learned J.M.F.C., Bokaro in connection with
Complaint Case No.331 of 2018, is quashed and set aside.
8. In the result, this Cr.M.P. stands allowed.
(Anil Kumar Choudhary, J.)
High Court of Jharkhand, Ranchi
Dated the 01st of May, 2024
AFR/ Animesh-Saroj
