Karnataka High Court

Mr. Biju Karnan vs Lakshmi Venktateshwara Traders on 26 September, 2025

Author: S.Vishwajith Shetty

Bench: S.Vishwajith Shetty

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                                                            WP No. 106258 of 2024
                                                        C/W WP No. 106471 of 2024

                     HC-KAR



                      IN THE HIGH COURT OF KARNATAKA, AT DHARWAD
                       DATED THIS THE 26TH DAY OF SEPTEMBER, 2025
                                           BEFORE
                      THE HON'BLE MR JUSTICE S.VISHWAJITH SHETTY
                       WRIT PETITION NO. 106258 OF 2024 (GM-RES)
                                          C/W
                       WRIT PETITION NO. 106471 OF 2024(GM-RES)

                     IN W.P. NO.106258 OF 2024:
                     BETWEEN:

                     MR. BIJU KARNAN, DIRECTOR,
                     M/S. KKR PRODUCTS AND MARKETING PVT. LTD.,
                     OKKAL POST, KALADY, ERNAKULAM DISTRICT,
                     PIN-683 550.

                     MR. BIJU KARNAN S/O. MR. K.K. KARNAN,
                     AGED ABOUT 48 YEARS, (15/MAY/1976),
                     RESIDING AT: KURUVAMPADATHU HOUSE,
                     OKKAL P.O., CHELAMATTOM PART,
                     KALADY, ERNAKULAM DISTRICT,
                     KERALA STATE, PIN CODE-683 550.
                                                                       ... PETITIONER
                     (BY SRI. SHIJU ABRAHAM VERGHIS, ADVOCATE)

                     AND:
         Digitally
         signed by
         RAKESH S
RAKESH HARIHAR
                     LAKSHMI VENKTATESHWARA TRADERS,
S       Location:
        HIGH
HARIHAR COURT OF
         KARNATAKA
                     R/BY SRIDHAR BONAGERI
         DHARWAD
         BENCH
                     S/O. LATE VENKAPPA BONEGERI,
                     AGED 65 YEARS, C/O. GOURISHANKAR COLD
                     STORAGE (P) LTD. AND KIADB INDUSTRIAL AREA,
                     BENGALURU ROAD, BALLARI,
                     KARNATAKA STATE, PIN CODE-583 102,
                                                                      ... RESPONDENT

(BY SRI. PRASHANT F. GOUDAR, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA R/W SECTION 528 OF BNSS, 2023, PRAYING TO CALL FOR THE ENTIRE FILE OF THE IMPUGNED ANNEXURE-'A' CC# 31 OF 2024, PENDING BEFORE THE I ADDL. CIVIL JUDGE AND JMFC, BALLARI, BALLARI DISTRICT, ARISING OUT OF PCR

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# 137 OF 2023, BEFORE THE I ADDL. CIVIL JUDGE AND JMFC, BALLARI, BALLARI DISTRICT AND QUASH THE ENTIRE PROCEEDINGS PERTAINING TO THE IMPUGNED ANNEXURE-'A' CC# 31 OF 2024, PENDING BEFORE THE I ADDL. CIVIL JUDGE AND JMFC, BALLARI, BALLARI DISTRICT, ARISING OUT OF PCR # 137 OF 2023, BEFORE THE I ADDL. CIVIL JUDGE AND JMFC, BALLARI, BALLARI DISTRICT.

IN W.P. NO.106471 OF 2024:

BETWEEN:

MRS. JINI BIJIMAN, DIRECTOR, M/S. KKR PRODUCTS AND MARKETING PVT. LTD., OKKAL POST, KALADY, ERNAKULAM DISTRICT, PIN-683 550.

MRS. JINI BIJU W/O. MR. BIJU KARNAN, AGED ABOUT 39 YEARS, (06/OCT/1994), RESIDING AT: KURUVAMPADATHU HOUSE, OKKAL P.O., CHELAMATTOM PART, KALADY, ERNAKULAM DISTRICT, KERALA STATE, PIN CODE-683 550.

... PETITIONER (BY SRI. SHIJU ABRAHAM VERGHIS, ADVOCATE)

AND:

LAKSHMI VENKTATESHWARA TRADERS, R/BY SRIDHAR BONAGERI S/O. LATE VENKAPPA BONEGERI, AGED 65 YEARS, C/O. GOURISHANKAR COLD STORAGE (P) LTD. AND KIADB INDUSTRIAL AREA, BENGALURU ROAD, BALLARI, KARNATAKA STATE, PIN CODE-583 102, ... RESPONDENT (BY SRI. PRASHANT F. GOUDAR, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA R/W SECTION 528 OF BNSS, 2023, PRAYING TO CALL FOR THE ENTIRE FILE OF THE IMPUGNED ANNEXURE-'A' CC# 31 OF 2024, PENDING BEFORE THE I ADDL. CIVIL JUDGE AND JMFC, BALLARI, BALLARI DISTRICT, ARISING OUT OF PCR # 137 OF 2023, BEFORE THE I ADDL. CIVIL JUDGE AND JMFC, BALLARI, BALLARI DISTRICT AND QUASH THE ENTIRE PROCEEDINGS PERTAINING TO THE IMPUGNED ANNEXURE-'A' CC# 31 OF 2024,

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PENDING BEFORE THE I ADDL. CIVIL JUDGE AND JMFC, BALLARI, BALLARI DISTRICT, ARISING OUT OF PCR # 137 OF 2023, BEFORE THE I ADDL. CIVIL JUDGE AND JMFC, BALLARI, BALLARI DISTRICT.

THESE PETITIONS ARE HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 15.09.2025, COMING ON FOR PRONOUNCEMENT, THIS DAY, ORDER IS MADE THEREIN AS UNDER:

CAV ORDER (PER: THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY)

1. Accused nos.2 and 3 are before this Court in

these two writ petitions filed under Articles 226 and 227 of

the Constitution of India read with Section 528 of the BNSS

2023 with a prayer to quash the entire proceedings in C.C.

No.31 of 2024 pending before the Court of I Additional Civil

Judge and JMFC, Ballary, arising out of PCR No.137 of 2023

registered for offence punishable under Section 138 of the

Negotiable Instruments Act.

2. Heard the learned counsel for the parties.

3. Facts leading to filing of these two petitions

narrated briefly are, respondent herein has filed a private

complaint in PCR No.137/2023 before the Court of First

Additional Civil Judge and JMFC, Ballari against M/s KKR

Products and Market Private Limited, represented by its

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Managing Director and in the said complaint, petitioners

herein are arraigned as accused nos.2 and 3 in their

capacity as Managing Director and Director of the first

accused company. After taking cognizance of the alleged

offence, the learned Magistrate had issued summons to the

accused in CC No.31 of 2024 and aggrieved by the same,

petitioners are before this Court in these two petitions.

4. Learned counsel for the petitioners having

reiterated the grounds urged in the petitions submits that

the accused are not liable to pay any legally recoverable

debt to the complainant and therefore, impugned

proceedings cannot be sustained. He submits that initially, a

legal notice dated 06.12.2022 was issued to the petitioners

herein informing the petitioners that the three cheques in

question which were in possession of the complainant would

be presented for realisation. The cheques in question were

only given towards security. The validity of the cheques is

only for a period of 3 months. The cheques in question

which were in possession of the complainant as on the date

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of issuing the first notice dated 06.12.2022, have been

presented for realization to drawee bank after expiry of the

validity period of 3 months. He submits that after the

cheques in question were dishonoured, a second legal

notice was issued on 26.06.2023 and based on the same,

the impugned criminal proceedings has been initiated which

is bad in law. He refers to the judgment of the Hon'ble

Supreme Court in the case of Tameeshwar Vaishnav Vs.

Ramvishal Gupta reported in (2010) 2 SCC 329, in

support of his contention. He submits that accused no.3 is

only a Director of the first accused and she is not the

signatory to the cheques in question. Accused no.2 is the

Managing Director of the first accused company and he is

the signatory of the cheques in question. Only to harass and

coerce the petitioners herein accused no.3 who is the wife

of accused no.2, has been arraigned as accused to the

impugned proceedings, which is not permissible in view of

the judgments of the Hon'ble Supreme Court in the case of

Susela Padmavathy Amma Vs. M/s Bharati Airtel Ltd.

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reported in 2024 INSC 206 and in Siby Thomas Vs. M/s

Somany Ceramics Ltd. in SLP No. 12/2020.

5. He submits that after the issuance of the first

legal notice dated 06.12.2022 a sum of ₹16,51,093/- was

credited to the bank account of the complainant on

10.02.2023 and therefore, the accused were not liable to

pay the amount covered under the cheques in question to

the complainant. Even on this ground, the impugned

criminal proceedings is liable to be quashed.

6. Per contra, learned counsel appearing for the

respondent-complainant submits that a total sum of

₹1,66,36,805.42/- was due to be paid by the accused

towards supply of red chilli by the complainant. The

business transaction between the parties is evidenced by

purchase orders, invoices and other correspondence

between the parties. After the first legal notice dated

06.12.2022 was issued, a sum of ₹16,51,093/- was paid by

the accused, which also proves the business transaction

between the parties. Since the outstanding amount as

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claimed in the legal notice dated 06.12.2022 was not paid,

the three cheques in questions were presented for

realization after writing the dates on the same and since the

cheques in question were dishonoured by the drawee bank,

statutory notice was issued to the accused and thereafter,

the impugned criminal proceedings has been initiated

against them. He submits that amount due to be paid by

the accused is more than the amount covered under the

cheques in question. Accused no.2 is the Managing Director

and accused no.3 is the Director of accused no.1 company

and both of them are actively taking part in the day to day

administration affairs of the company and there is specific

pleading to the said effect. The transaction between the

parties is proved by the account statement which is already

produced before the trial Court. He submits that after the

cheques in question were dishonoured, only one legal notice

is issued on 26.06.2023 and therefore, the judgment in the

case of Tameeshwar Vaishnav (supra), is not applicable

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to the facts and circumstances of the case. Accordingly,

prays to dismiss the writ petitions.

7. It is the case of the complainant firm that it had

business transaction with the accused and as per the

purchase orders raised by the accused, red chillis were

supplied and towards supply of the said goods, the accused

were totally liable to pay a sum of ₹1,66,36,805.42/- and to

prove the transaction between the parties, statement of

account has been already produced before the trial Court.

According to the complainant, three cheques in question

was issued towards security for the purpose of amount due

by the accused and therefore, legal notice dated 06.12.2022

was issued to the accused calling upon them to pay the

aforesaid amount due by them and in the said legal notice,

it was also stated that failing repayment of the amount due,

the cheques in question would be presented for realization.

It is not in dispute that the cheques in question are drawn

on the bank account maintained in the drawee bank in the

name of the first accused company. Accused no.2 is the

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Managing Director of the company and he is also the

signatory to the cheques in question. Accused no.3 who is

the wife of accused no.2 is the Director of the first accused

company.

8. It appears that since the accused had not paid

the alleged due amount of ₹1,66,36,805.42/- to the

complainant, legal notice dated 06.12.2022 was issued to

accused nos.2 and 3 calling upon them to pay the aforesaid

amount of ₹1,66,36,805.42/- and in the said notice, it was

also stated that the cheques in question were issued by the

accused towards their commitment to repay the amount

due and the said cheques would be presented for realisation

in the event the amount due by them is not repaid.

9. It appears that the aforesaid three cheques

which were issued by the accused were subsequently

presented for realization in the month of June 2023 and

since the cheques in question were dishonoured, by the

drawee bank, legal notice dated 26.06.2023 was issued to

accused nos.1 to 3 and in spite of service of the statutory

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legal notice, since the amount covered under the cheques in

question was not paid to the complainant, a private

complaint was filed before jurisdictional Court against the

accused for the offence punishable under Section 138 of the

N.I.Act.

10. The Hon'ble Supreme Court in the case of Bir

Singh Vs. Mukesh Kumar reported in 2019 4 SCC 197 in

para Nos.33 to 36 has observed as follows:

"33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted.

34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.

35. It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or

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coercion. Nor is it the case of the respondent-accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion. The second question is also answered in the negative.

36. Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt."

11. The signatures found in the cheques in question

is not in dispute. In the case of Bir Singh Vs. Mukesh

Kumar reported in 2019 4 SCC 197 the Hon'ble Supreme

Court has observed that if a signed blank cheque is

voluntarily presented to payee, towards some payment, the

payee may fill up the amount and other particulars and such

a cheque is valid cheque. In the present case, in the legal

notice dated 06.12.2022, it is specifically mentioned about

the issuance of cheques in question by the accused and on

receipt of aforesaid legal notice, part payment of

Rs.16,51,093/- has been paid by the accused to the

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complainant which shows that they have not only admitted

the transaction, but also issuance of the aforesaid three

disputed cheques in question.

12. In the present case, in order to prove the

transaction between the parties, the complainant has

produced documents before the trial Court such as invoices,

purchase orders, account statement etc. In addition to the

same after the first notice dated 06.12.2022 was issued,

the accused have paid a sum of ₹16,51,093/- and

therefore, a sum of ₹1,49,85,712.42/- was allegedly still

due to be paid to the complainant. Therefore, the

contention of the petitioners that the accused are not liable

to pay any legally recoverable debt, does not merit

consideration.

13. The validity of a cheque commences from the

date which the said cheque bears. In the case on hand, it

appears that the dates were written by the complainant in

the three cheques in question which were issued by the

accused towards part payment of the amount due by them

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and thereafter, the said cheques were presented for

realization. Out of the three cheques in question, 2 are

dated 14.06.2023 and another is dated 12.06.2023. The

cheques were presented to the drawee Bank in the month

of June 2023 itself. Therefore, it cannot be said that the

cheques were presented beyond the period of its validity. In

the light of the judgment of the Hon'ble Supreme Court, in

the case of BIR Singh, no fault can be found if the

complainant has written the dates in the cheques in

question, in which the signature found is not in dispute.

14. Material on record would go to show that the

total amount due by the accused was ₹1,66,36,805.42/-

and out of the said amount only a sum of ₹16,51,093/- was

paid. The amounts covered under the cheques in question

totally comes to ₹1,35,00,000/-. Therefore, the amount

covered under the cheques in question is not in excess of

the amount that is allegedly due to be paid by the accused

and therefore, I do not find any merit in the contention

urged on behalf of the petitioners that since part amount

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was paid after the first legal notice was issued, the

impugned criminal proceedings is bad in law.

15. Accused no.2 is the Managing Director and

signatory of the cheques in question and therefore, in view

of the judgment of the Hon'ble Supreme Court in the case

of K.K.AHUJA AND V.K.VORA AND ANOTHER - (2009) 10

SCC 48, he is liable to be prosecuted for the offence

punishable under Section 138 of the N.I.Act. So far as the

accused no.3 is concerned, except the bald averment that

she is also actively taking part in the day to day affairs of

the first accused company, there is no other material to

show her participation in the day to day administrative

affairs of the first accused company. Learned counsel for

the complainant during the course of his arguments has

fairly admitted this aspect of the matter.

16. In the case of Susela Padmavathy Amma Vs.

M/s Bharati Airtel Ltd. reported in (2024 INSC 206) in

paragraph Nos.7 and 8 the Hon'ble Supreme Court has

observed as follows:

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"7. In the case of State of Haryana vs. Brij Lal Mittal and others, this Court observed thus:

"8. Nonetheless, we find that the impugned judgment of the High Court has got to be upheld for an altogether different reason. Admittedly, the three respondents were being prosecuted as directors of the manufacturers with the aid of Section 34(1) of the Act which reads as under:

"34. Offences by companies.--(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub- section shall render any such person liable to any punishment provided in this Act if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence."

It is thus seen that the vicarious liability of a person for being prosecuted for an offence committed under the Act by a company arises if at the material time he was in charge of and was also responsible to the company for the conduct of its business. Simply because a person is a director of the company it does not necessarily mean that he fulfils both the above requirements so as to make him liable. Conversely,

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without being a director a person can be in charge of and responsible to the company for the conduct of its business. From the complaint in question we, however, find that except a bald statement that the respondents were directors of the manufacturers, there is no other allegation to indicate, even prima facie, that they were in charge of the company and also responsible to the company for the conduct of its business."

8. It could thus be seen that this Court had held that simply because a person is a director of the company, it does not necessarily mean that he fulfils the twin requirements of Section 34(1) of the said Act so as to make him liable. It has been held that a person cannot be made liable unless, at the material time, he was in-charge of and was also responsible to the company for the conduct of its business."

17. In the case of Siby Thomas, (supra) the

Hon'ble Supreme Court in Paragraph Nos.12 and 15 and

16 has observed as follows:

"12. Bearing in mind the afore-extracted recitals from the

decisions in Gunmala Sales Private Limited's case (supra)

and S.P. Mani's case (supra), we have carefully gone through

the complaint filed by the respondent. It is not averred

anywhere in the complaint that the appellant was in charge of

the conduct of the business of the company at the relevant time

when the offence was committed. What is stated in the

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complaint is only that the accused Nos. 2 to 6 being the

partners are responsible for the day-to-day conduct and

business of the company. It is also relevant to note that an

overall reading of the complaint would not disclose any clear

and specific role of the appellant. In the statutory notice dated

10.09.2015 (Annexure-P6) at paragraph 3 it was averred thus:-

"3. That for liquidation of the aforesaid legal

liability/outstanding, you noticee No. 2 to 6 issued cheque

number 005074 dated 21.08.2015, amounting to Rs.

27,46,737/- drawn on Punjab National Bank, Ernhipalam

(Kozhikode) branch in favour of my client from the account

of noticee No. 1."

In response to that in Annexure- P7 reply the appellant

herein stated thus:-

"In this regard, I would like to convey you that, I have

retired from M/s Tile store as partner way back on 28-5-

2013 and I am not a partner of M/s. Tile Store any more.

(Copy of Retirement deed enclosed). During the time of my

retirement, there were no dues to M/s. Somany Ceramics

Ltd. from M/s. Tile Store as full payments were made for the

consignments taken from them. (Copy of accounts

statements up to 31-05-2013 enclosed)"

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15. Paragraph 19 of the Ashok Shewakramani's case

(supra) is also relevant for the purpose of the case and it, in

so far as relevant, reads thus:

"19. Section 141 is an exception to the normal rule that

there cannot be any vicarious liability when it comes to a penal

provision. The vicarious liability is attracted when the

ingredients of subsection 1 of Section 141 are satisfied. The

Section provides that every person who at the time the offence

was committed was in charge of, and was responsible to the

Company for the conduct of business of the company, as well

as the company shall be deemed to be guilty of the offence

under Section 138 of the NI Act. In the light of sub-section 1

of Section 141, we have perused the averments made in the

complaints subject matter of these three appeals. The

allegation in paragraph 1 of the complaints is that the

appellants are managing the company and are busy with day

to day affairs of the company. It is further averred that they

are also in charge of the company and are jointly and severally

liable for the acts of the accused No.1 company. The

requirement of sub-section 1 of Section 141 of the NI Act is

something different and higher. Every person who is sought to

be roped in by virtue of sub-section 1 of Section 141 NI Act

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must be a person who at the time the offence was committed

was in charge of and was responsible to the company for the

conduct of the business of the company. Merely because

somebody is managing the affairs of the company, per se, he

does not become in charge of the conduct of the business of

the company or the person responsible for the company for

the conduct of the business of the company. For example, in a

given case, a manager of a company may be managing the

business of the company. Only on the ground that he is

managing the business of the company, he cannot be roped in

based on sub-section 1 of Section 141 of the NI Act. The

second allegation in the complaint is that the appellants are

busy with the day-to-day affairs of the company. This is hardly

relevant in the context of subsection 1 of Section 141 of the NI

Act. The allegation that they are in charge of the company is

neither here nor there and by no stretch of the imagination, on

the basis of such averment, one cannot conclude that the

allegation of the second respondent is that the appellants were

also responsible to the company for the conduct of the

business. Only by saying that a person was in charge of the

company at the time when the offence was committed is not

sufficient to attract sub-section 1 of Section 141 of the NI Act."

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16. Thus, in the light of the dictum laid down in Ashok

Shewakramani's case (supra), it is evident that a vicarious

liability would be attracted only when the ingredients of

Section 141(1) of the NI Act, are satisfied. It would also reveal

that merely because somebody is managing the affairs of the

company, per se, he would not become in charge of the

conduct of the business of the company or the person

responsible to the company for the conduct of the business of

the company. A bare perusal of Section 141(1) of the NI Act,

would reveal that only that person who, at the time the

offence was committed, was in charge of and was responsible

to the company for the conduct of the business of the

company, as well as the company alone shall be deemed to be

guilty of the offence and shall be liable to be proceeded

against and punished. In such circumstances, paragraph 20 in

Ashok Shewakramani's case (supra) is also relevant. After

referring to the Section 141(1) of NI Act, in paragraph 20 it

was further held thus:

"20 On a plain reading, it is apparent that the words "was

in charge of" and "was responsible to the company for the

conduct of the business of the company" cannot be read

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disjunctively and the same ought be read conjunctively in view

of use of the word "and" in between."

18. The Hon'ble Supreme Court in the case of K.K.

Ahuja vs. V.K. Vora and another1 has observed as follows:

"27. The position under section 141 of the Act can be summarized thus:

(i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix `Managing' to the word `Director' makes it clear that they were in charge of and are responsible to the company, for the conduct of the business of the company.

(ii) In the case of a director or an officer of the company who signed the cheque on behalf of the company, there is no need to make a specific averment that he was in charge of and was responsible to the company, for the conduct of the business of the company or make any specific allegation about consent, connivance or negligence. The very fact that the dishonoured

(2009) 10 SCC 48

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cheque was signed by him on behalf of the company, would give rise to responsibility under sub-section (2) of Section 141.

(iii) In the case of a Director, Secretary or Manager (as defined in Sec. 2(24) of the Companies Act) or a person referred to in clauses (e) and (f) of section 5 of Companies Act, an averment in the complaint that he was in charge of, and was responsible to the company, for the conduct of the business of the company is necessary to bring the case under section 141(1). No further averment would be necessary in the complaint, though some particulars will be desirable. They can also be made liable under section 141(2) by making necessary averments relating to consent and connivance or negligence, in the complaint, to bring the matter under that sub-section.

(iv) Other Officers of a company can not be made liable under sub-section (1) of section 141. Other officers of a company can be made liable only under sub-section (2) of Section 141, be averring in the complaint their position and duties in the company and their role in regard to the issue and dishonour of the cheque, disclosing consent, connivance or negligence.

19. This Court in the case of Agarwal Coal

Corporation Pvt. Ltd., vs. Benaka Sponge Iron Pvt Ltd.

and others2 has observed as follows:

In Crl.P.No.100988/2024 & connected matters disposed of on 19.08.2025

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"7. Section 141 of the N.I. Act provides for criminal liability for dishonour of cheque committed by company. In the case of K.K.AHUJA AND V.K.VORA AND ANOTHER - (2009) 10 SCC 48, the Hon'ble Supreme Court after referring to the judgment of SMS PHARMACEUTICALS V. NEETA BHALLA & ANR - 2005 (8) SCC 89 has observed that signatory of a cheque which is dishonoured is clearly responsible for the act and his liability is covered under Section 141(2) of N.I. Act. Therefore, no specific averments would be necessary to make him liable to be prosecuted for offence under Section 138 of N.I. Act. Similarly Managing Director and Deputy Managing Director by virtue of their office which they holding would come under Section 141(1) of N.I. Act even if there is no specific averments against them. Insofar as the other directors are concerned there has to be specific averments as against them in the complaint with regard to their role and responsibility in the conduct of business of the company and in the absence of such allegation or averments the other directors cannot be prosecuted for the alleged offences."

20.Under the circumstances, I find that averments

found in the complaint against accused no.3 in the absence

of necessary particulars are not sufficient to satisfy the

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NC: 2025:KHC-D:13471

HC-KAR

mandatory requirements of Section 141(1) of the

Negotiable Instruments Act and prosecute accused no.3 for

the alleged offence. Therefore, the impugned proceedings

initiated insofar as accused no.3 is concerned liable to be

quashed.

21. Accordingly, the following order:-

WP No.106258/2024 filed by accused No.2 is dismissed.

WP No.106471/2024 filed by accused No.3 is allowed and the entire proceedings in C.C.No.31 of 2024 pending before the Court of I Additional Civil Judge and JMFC, Ballary, Haveri District arising out of PCR No.137 of 2023 registered for offence punishable under Section 138 of the Negotiable Instruments Act is quashed as against accused No.3.