Karnataka High Court

Shri. Vinayak Yellojirao Kadolkar vs Shree Om Sai Enterpprises on 20 June, 2025

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                                                        CRL.P No. 102806 of 2023
                                                    C/W CRL.P No. 102807 of 2023

                    HC-KAR




                               IN THE HIGH COURT OF KARNATAKA,
                                       DHARWAD BENCH

                             DATED THIS THE 20TH DAY OF JUNE, 2025

                                           BEFORE
                          THE HON'BLE MR. JUSTICE VENKATESH NAIK T

                              CRIMINAL PETITION NO.102806 OF 2023
                                   (482 OF Cr.PC/528 OF BNSS)
                                               C/W
                              CRIMINAL PETITION NO.102807 OF 2023

                   IN CRL.P. NO. 102806 OF 2023
                   BETWEEN:

                   1.   SHRI. VINAYAK YELLOJIRAO KADOLKAR,
                        AGE: 67 YEARS, OCC: BUSINESS,
                        R/O. ASHIRWAD BANGLOW, 5TH CROSS,
                        BHAGYA NAGAR, ANGOL, TQ & DIST. BELAGAVI,
                        PIN CODE-590006.

                   2.   SHRI. RAJ VINAYAK KADOLKAR,
                        AGE: 35 YEARS, OCC: BUSINESS,
                        R/O. ASHIRWAD BANGLOW, 5TH CROSS,
                        BHAGYA NAGAR, ANGOL, TQ & DIST. BELAGAVI,
                        PIN CODE-590006.
                                                                    ...PETITIONERS
Digitally signed
by RAKESH S        (BY SHRI NITIN R. BOLABANDI, ADVOCATE)
HARIHAR
Location: High
Court of           AND:
Karnataka,
Dharwad Bench
                   SHREE OM SAI ENTERPPRISES,
                   R/BY. ITS PROPRIETOR,
                   SOU. LAXMI W/O. SHRIKANT PATIL,
                   AGE: 43 YEARS, OCC: BUSINESS,
                   BLOCK A-4, PLOT NO.24/B, SURVEY NO.669,
                   INDUSTRIAL ESTATE, ANGOL,
                   TQ & DIST. BELAGAVI, PIN-590006.
                                                                    ...RESPONDENT
                   (BY SHRI D. G. BHAT, ADVOCATE)

                        THIS CRIMINAL PETITION FILED U/S.482 OF CR.P.C. SEEKING
                   TO ALLOW THE CRIMINAL PETITION FILED U/S.482 OF CR.P.C. AND
                   QUASH THE C.C NO.632/2020 (P.C NO.355/2020) PENDING ON THE
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                                           NC: 2025:KHC-D:7918
                                     CRL.P No. 102806 of 2023
                                 C/W CRL.P No. 102807 of 2023

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FILE OF THE COURT OF J.M.F.C VIII COURT, BELAGAVI FOR AN
OFFENCES PUNISHABLE U/S. 138 OF NI ACT, AGAINST
PETITIONERS/ACCUSED NO.6 AND 7, IN THE INTEREST OF JUSTICE
AND EQUITY.

IN CRL.P.NO. NO. 102807 OF 2023
BETWEEN:

1.   SHRI. VINAYAK YELLOJIRAO KADOLKAR,
     DIRECTOR, SOUND CAST ALLOYS PVT. LTD.,
     AGE: 67 YEARS, OCC: BUSINESS,
     R/O. ASHIRWAD BANGLOW, 5TH CROSS,
     BHAGYA NAGAR, ANGOL, TQ & DIST. BELAGAVI,
     PIN CODE-590006.

2.   SHRI RAJ VINAYAK KADOLKAR,
     DIRECTOR, SOUND CAST ALLOYS PVT. LTD.,
     AGE: 35 YEARS, OCC: BUSINESS,
     R/O. ASHIRWAD BANGLOW, 5TH CROSS,
     BHAGYA NAGAR, ANGOL, TQ & DIST. BELAGAVI,
     PIN CODE-590006.
                                                 ...PETITIONERS
(BY SRI. NITIN BOLABANDI, ADVOCATE)

AND:

M/S. SHREE DURGAMATA ENTERPRISES,
REPRESENTED BY ITS PROPRIETOR,
SHREE SHRIKANT TUKARAM PATIL,
AGE: 50 YEARS, OCC: BUSINESS,
PLOT NO.23/B, JIJAJI BUILDING,
KALMESHWAR COLONY, UDYAMBHAG,
TQ & DIST. BELAGAVI, PIN-590008.
                                                 ...RESPONDENT
(BY SHRI D. G. BHAT, ADVOCATE)

      THIS CRIMINAL PETITION FILED U/S.482 OF CR.P.C. SEEKING
TO ALLOW THE CRIMINAL PETITION FILED U/S.482 OF CR.P.C. AND
QUASH THE C.C NO.633/2020 (P.C NO.354/2020) PENDING ON THE
FILE OF THE COURT OF J.M.F.C. VIII COURT, BELAGAVI FOR AN
OFFENCES PUNISHABLE U/S.138 OF NI ACT, AGAINST PETITIONERS/
ACCUSED NO.6 & 7, IN THE INTEREST OF JUSTICE AND EQUITY.

      THESE PETITIONS ARE COMING ON FOR ADMISSION, THIS
DAY, COMMON ORDER WAS MADE THEREIN AS UNDER:
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                                      CRL.P No. 102806 of 2023
                                  C/W CRL.P No. 102807 of 2023

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               COMMON ORAL ORDER

(PER: THE HON'BLE MR. JUSTICE VENKATESH NAIK T)

Heard Sri. Nitin R.Bolabandi, learned counsel for the

petitioners and Sri. D.G.Bhat, learned counsel for

respondent.

2. The petitioners have filed these petitions under

Section 482 of the Code of Criminal Procedure, praying to

quash the entire proceedings in C.C.No.632/2020 (arising

out of P.C.No.355/2020) and C.C.No.633/2020 (arising out

of P.C.No.354/2020), pending on the file of learned JMFC-

VIII Court, Belagavi for the offence punishable under Section

138 of Negotiable Instruments Act, 1881 (hereinafter

referred to as 'N.I.Act' for brevity).

3. For the sake of convenience, the parties are

referred to as per their ranking before the Trial Court.

4. In both the petitions, petitioner No.1 is accused

No.6 whereas, petitioner No.2 is accused No.7, who died on

02.01.2025. Hence, petitions against petitioner No.2/accused

No.7, is abated.

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5. The brief facts of the complainant's case in

C.C.No.632/2020 is as under;

The complainant is a proprietorship concern dealing in

industrial scraps and pig iron. Accused No.1 is a registered

company (herein after referred to as "the company") and

accused Nos.2 to 7 are the Directors of the company.

Accused Nos.2 to 7 are responsible to and in charge of the

company and responsible for the conduct of the business of

the company and managing the day today affairs of the

company. The company represented by its directors -

accused Nos.2 to 7 used to buy industrial scraps and pig iron

form the complainant. The complainant used to supply

scraps and pig iron to the company as per the purchase

orders issued by the company. As on 31.03.2018 as per the

books of account maintained by the complainant, an amount

of Rs.37,60,438.15 was due to the complainant by accused

the company in respect of scraps and pig iron supplied by

the complainant to the company. Inspite of several request

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of the complainant to make the payment due to him, all the

accused persons on one or the other pretext, sought time.

6. On 27.10.2020, acknowledging the amount due

to the complainant, the authorized signatory of the company

who operates under directions and authority of accused

Nos.2 to 7, with the knowledge of accused Nos.2 to 7, issued

a cheque bearing No.591158 dated 27.10.2020 drawn on

State Bank of India, SME Branch, Belagavi, for a sum of

Rs.37,60,438.15, towards the amount due to the

complainant.

7. On being presentation of the said cheque, same

was returned with shara as "Account Closed". Hence, the

complainant got issued a legal notice calling upon the

accused persons to pay the amount due under the cheque.

Inspite of service of legal notice on the accused they did not

make any payment. On the contrary, they had issued

untenable reply. Hence, the complainant filed a private

complaint in P.C.No.335/2020 before the learned JMFC -VIII,

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Belagavi, for the offence punishable under Section 138 of NI

Act.

8. In Crl.P.No.102807/2023, (arising out of

C.C.No.633/2020), the complainant used to supply scraps

and pig iron to the company. Accused Nos.2 to 7 are the

Directors of the Company. As on 31.03.2018, as per the

books of account maintained by the complainant an amount

of Rs.10,95,862.75 was due to the complainant by the

company in respect of scraps and pig iron supplied by the

complainant to the company.

9. On 27.10.2020, acknowledging the amount due

to the complainant, the authorized signatory of the company

who operates under directions and authority of accused

Nos.2 to 7, with the knowledge of accused Nos.2 to 7, issued

a cheque bearing No.493754 dated 27.10.2020 drawn on

State Bank of India, SME Branch, Belagavi, for a sum of

Rs.10,95,862.75, towards the amount due to the

complainant.

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10. On being presentation of the said cheque, same

was returned with shara as "Account Closed". Hence, the

complainant got issued a legal notice calling upon the

accused persons to pay the amount due under the cheque.

Inspite of service of legal notice to the accused did not make

any payment. However, they had issued an untenable reply.

Hence, the complainant filed a private complaint in

P.C.No.354/2020 before the JMFC-VIII, Belagavi for the

offence punishable under Section 138 of NI Act.

11. After institution of both the complaints, the Trial

Court took cognizance of the offence against the accused

persons in both the cases and issued process against them

including the present petitioners. Taking exception of the

same, petitioner No.1 - accused No.6 and petitioner No.2 -

accused No.7 have filed these petitions under Section 482 of

Cr.P.C.

12. The learned counsel for the petitioners in both the

petitions contended that, they are innocent, they have not

committed any offence, the petitioners are law abiding

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citizens, having no other criminal antecedents. Petitioners

are neither the Directors nor the Partners of the company

and they are not authorized signatory to cheques in

question, same were issued by the Managing Director

(accused No.2) of the company, hence, the provisions of

Section 141 of N.I.Act not applicable to the petitioners. The

presence of petitioners is not at all required in this case,

thus, the initiation of criminal proceedings against the

petitioners are purely abuse of process of law. Hence, prayed

to quash the proceedings.

13. Learned counsel for the petitioners in support of

his submission relied upon two judgments in the case of

Sunita Palita & others Vs. M/s Panchami Stone Quarry1

and in the case of Siby Thomas Vs. Somany Ceramics

Ltd2.

14. The learned counsel for the respondent submits

that, petitioners are also directors of the company, thus,

they are also vicariously liable, as accused No.2 has issued

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cheques for and on behalf of the company. The petitioners

have neither disputed in reply notice dated 26.11.2020

issued to the counsel for the complainant nor in the original

suit in O.S.No.26/2021, as to their directorship. Now the

petitioners are disputing question of fact, which cannot be

gone into under Section 482 of Cr.P.C. Thus, prayed to

dismiss the petition.

15. On perusal of the material available on record, it

appears that, as per the contents of complaint, accused

Nos.2 to 7 representing the Company, have issued cheques

in respect of the transaction held between the complainant

and the company in respect of supply of scrap material and

pig iron and acknowledged the receipt of the debt and thus,

accused Nos.2 to 7 have issued cheque in favour of the

complainant and same were dishonored.

16. On perusal of cheques at Exs.P.1 in both the

cases, it appears that it was issued in the name of the

company. It bears the signature of authorized signatory of

the company. Exs.P.31 and P.32 - Memorandum of Articles

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discloses that accused Nos.6 and 7 are the directors of the

company and cheques in question have been issued in the

name of the company. Therefore, there is a material against

petitioners - accused Nos.6 and 7 to proceed against them

for the offence under Section 138 of NI Act.

17. Learned counsel for the respondent/complainant

vehemently contended in both the petitions that, in both the

complaints, the complainants have clearly described the role

of accused Nos.6 and 7 and their liability to pay the amount.

Hence, learned counsel relied upon Section 141 (2) of the NI

Act.

18. Section 141 (2) of NI Act, reads as follows:

"141(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

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other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm.

19. Whereas, in order to attract Section 141(2) of

N.I.Act against accused Nos.6 and 7, complainants have

placed Ex.P.31 and P.32, the copies of Memorandum of

Articles of the company, wherein they have clearly shown as

directors of the company. As per the contents of Ex.P.31 and

P.32 for the business or affairs of the company, all directors

are responsible.

20. From perusal of the reply notice dated

26.11.2020, issued by the learned counsel for accused Nos.6

and 7 is concerned, wherein they have stated that they are

the directors of the company and nowhere, they have

disputed their status in the company.

21. Learned counsel for the petitioners - accused

Nos.6 and 7 contended that on 12.01.2018 itself, accused

Nos.6 & 7 have entered in to an agreement with person who

is responsible for the affairs of the company and thus,

accused Nos.6 & 7 away from the affairs of the company.

But, learned counsel for petitioner has not placed any

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material before the Court to substantiate that accused Nos.6

& 7 were tendered their resignation either to the company or

to the Registrar of Companies and no board resolution is

placed on record at this juncture.

22. In these cases, the petitioners simply disputing

their status in the affairs of the company. On perusal of

material available on record and the above proposition of

law, whenever question of fact is disputed, such case cannot

be quashed under Section 482 of Cr.P.C. The Hon'ble Apex

Court in the case of Rajeshbhai Muljibhai Patel and

others Vs. State of Gurarat and another Etc3, held that

"when disputed question of facts are involved which need to

be adjudicated after the parties adduce evidence, the

complaint under Section 138 of NI Act, ought not to have

been quashed by the High Court by taking recourse to

Section 482 of Cr.P.C".

23. In a case pertaining to an offence under Sections

138 and 141 of the N.I.Act, the law requires that, the

Crl.A.Nos.251252/2020 disposed of on 10.02.2020

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complaint must contain a specific averment that the director

was in charge of, and responsible for, the conduct of the

company's business at the time when the offence was

committed. Whereas in the instant cases, the complainants

have clearly disclosed that, the petitioners being the

directors of the company was in-charge of, and responsible

for, the conduct of the Company's business at the time when

the offence was committed. On the contrary, the petitioners

have not placed any material to substantiate their

contention.

24. In deciding a quashing of proceedings under

Section 482 of Cr.P.C., the Court must consider whether the

averment made in the complaint is sufficient or if some

unimpeachable evidence has been brought on record, which

leads to the conclusion that the director could never have

been in charge of and responsible for the conduct of the

business of the company at the relevant time. The similar

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ratio is laid down by the Hon'ble Apex Court, in the case of

AD Radha Krishna Vs. Dasari Deepthi & Ors4.

25. The Hon'ble Apex Court, in the case of Gunmala

Sales (P) Ltd. v. Anu Mehta5, held that, "if an accused

wants the process under Sections 138 and 141 of the N.I.Act

to be quashed by filing a petition under Section 482 Cr.P.C.,

he must make out a case that, making him stand in the trial

would be an abuse of process of Court".

26. Admittedly, in the instant case, the petitioners,

who are the directors of the company and the company has

issued cheque, therefore the complainant has been

prosecuted the accused persons under Section 138 of NI Act.

Thus, they are responsible even in case of joint liability.

27. Learned counsel for the petitioner relied upon

Siby Thomas's case cited supra, wherein the Hon'ble Apex

Court observed that, the petitioner Siby Thomas who

tendered resignation to the company. Therefore, the Hon'ble

2019 SCC Online 357

2015) 1 SCC 103

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Apex Court quashed the entire proceedings against him,

whereas in the instant case, accused Nos.6 & 7 have not at

all tendered their resignation to the company. Therefore, the

decision cited supra in Siby Thomas's case is not aptly

applicable to the case in hand.

28. Therefore, accused Nos.6 & 7 who are the

directors of the company, they are responsible, thus, there

are no merits in these petitions.

Accordingly, both the criminal petitions are dismissed.

Looking into to the age of the litigation, the Trial Court is directed to expedite the matters without adjourning unnecessarily.

Any observations made in this order are only for the purpose of deciding these criminal petitions; the Trial Court shall not be influenced by the observations made in this order.

Sd/-

(VENKATESH NAIK T) JUDGE AM, EM /CT-AN