Smt. P. Lalitha W/O. ... vs Basavaraj S/O. Kallappa ...
2022 Latest Caselaw 2665 Kant

          IN THE HIGH COURT OF KARNATAKA
                  DHARWAD BENCH

      DATED THIS THE 17TH DAY OF FEBRUARY 2022

                      BEFORE

      THE HON'BLE MR. JUSTICE M.NAGAPRASANNA

          CRIMINAL PETITION NO.102192/2021

BETWEEN

SMT. P. LALITHA W/O. SHRINIVASAREDDY
AGED ABOUT 50 YEARS,
DIRECTOR ARUNODAYA SEEDS PRIVATE LTD.,
NO. 4 AND 5 1ST MAIN, 4TH CROSS,
MARUTHINAGARA, OPP. OLD GYM,
YELAHANKA, BENGALURU-560064.
                                     ...PETITIONER
(BY SRI SRINAND A. PACHHAPURE, ADV.)

AND

BASAVARAJ S/O. KALLAPPA GODACHIKONDA,
AGED ABOUT 42 YEARS, OCC- BUSINESS,
HIREKERUR TALUK, HAVERI DISTRICT-581111.
                                     ...RESPONDENT
(BY SRI PRAKASH HOSAMANE, ADVOCATE)

      THIS CRIMINAL PETITION IS FILED U/S 482 OF
CR.P.C., SEEKING CALL FOR RECORDS AND QUASH THE
ENTIRE PROCEEDINGS IN CC NO.1020/2021 PENDING ON
THE FILE OF THE SENIOR CIVIL JUDGE AND JMFC,
                                2




HIREKERUR, FOR THE OFFENCE ALLEGED U/S 138 OF N.I.
ACT.
       THIS PETITION COMING ON FOR ADMISSION THIS
DAY, THE COURT MADE THE FOLLOWING:
                            ORDER

The petitioner is before this Court calling in question

the proceedings in Criminal Case No.1020/2021 registered

for the offence punishable under Section 138 of the

Negotiable Instruments Act, 1881 ('N.I.Act' for short).

2. Heard Sri Srinand A.Pachchapure, learned counsel

appearing for petitioner-accused and Sri Prakash

Hosamane, learned counsel appearing for respondent-

complainant.

3. The facts of the case need not be gone into at

this juncture as it is undisputed that the petitioner is a

Director of Arunodaya Seeds Private Limited, which is a

company in whose name the alleged cheque has been

issued. The complaint is registered invoking Section 138 of

the N.I.Act without arraigning the Company as an accused

in the proceedings, the issue with regard to the Company

to be arrayed as an accused, or otherwise need not detain

this Court for long as the issue is no longer res integra. The

Hon'ble Apex Court in the case of Aneeta Hada vs.

Godfather Travels & Tours Pvt. Ltd., reported in (2012) 5

SCC 661, has held as follows :

53. It is to be borne in mind that Section 141 of the Act is concerned with the offences by the company. It makes the other persons vicariously liable for commission of an offence on the part of the company. As has been stated by us earlier, the vicarious liability gets attracted when the condition precedent laid down in Section 141 of the Act stands satisfied. There can be no dispute that as the liability is penal in nature, a strict construction of the provision would be necessitous and, in a way, the warrant.

56. We have referred to the aforesaid passages only to highlight that there has to be strict observance of the provisions regard being had to the legislative intendment because it deals with penal provisions and a penalty is not to be imposed affecting the rights of persons whether juristic entities or individuals, unless they are arrayed as accused. It is to be kept in mind that the power of punishment is vested in the legislature and that is

absolute in Section 141 of the Act which clearly speaks of commission of offence by the company. The learned counsel for the respondents have vehemently urged that the use of the term "as well as" in the Section is of immense significance and, in its tentacle, it brings in the company as well as the director and/or other officers who are responsible for the acts of the company and, therefore, a prosecution against the directors or other officers is tenable even if the company is not arraigned as an accused. The words "as well as" have to be understood in the context.

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. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh (supra) which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal (supra) does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada (supra) is overruled with the qualifier as stated in paragraph 51. The decision in Modi Distilleries (supra) has to be treated to be restricted

to its own facts as has been explained by us hereinabove."

Which has been followed in plethora of judgments rendered

in the aftermath of Aneeta Hada (supra), therefore

proceedings initiated against the petitioner would stand

obliterated.

4. For the aforesaid reason, I pass the following :

ORDER

(i) The criminal petition is allowed.

(ii) The proceedings in Criminal Case

No.1020/2021 on the file of Senior Civil

Judge and JMFC, Hirekerur stand quashed

qua petitioner-accused No.2.

SD JUDGE CKK