Rajasthan High Court - Jodhpur
Rohitesh Nagda vs Lahar Singh Singhvi ... on 12 September, 2024
[2024:RJ-JD:38005]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Criminal Misc(Pet.) No. 5126/2023
Rohitesh Nagda S/o Sh. Balmukund Nagda, Aged About 33
Years, 29, Ramsingh Ji Ki Baadi, Hiranmagri Sector 11, Udaipur.
Dist. Udaipur (Raj.)
----Petitioner
Versus
Lahar Singh Singhvi S/o Lt. Sh. Sundarlal Ji, Aged About 71
Years, 30, Ek Sukhadia Circle, Dist. Udaipur (Raj.).
----Respondent
For Petitioner(s) : Mr. Avin Chhangani.
For Respondent(s) : None.
HON'BLE MR. JUSTICE ARUN MONGA
Order
12/09/2024
1. Quashing of an order dated 20/02/2023 passed by learned
Special Judicial Magistrate (N.I. Act Cases) No.4, Udaipur, in Case
No.1552/2017 (Lahar Singh Vs. Rohitesh Nagda), under Section
138 of N.I. Act, vide which, the application filed by the petitioner
for dismissing the complaint of respondent as he has arrayed the
company as opposite party in his complaint, was rejected. The
cheque in question is stated to have been issued by the company
i.e. Kalika Hotel and Restaurant Pvt. Ltd.
2. Relevant facts, shorn of unnecessary details, that the
petitioner, is a director of the aforesaid company.
2.1 While duly contesting the said complaint, the petitioner filed
an application on 20/09/2022, stating that the cheque in question
for an amount of Rs.1,25,400/- was issued in the name of the
company, i.e., Kalika Hotel and Restaurant Pvt. Ltd. Despite this,
the respondent (complainant) did not implead the company as a
party to the complaint. Therefore, proceedings under Section 138
[2024:RJ-JD:38005] (2 of 4) [CRLMP-5126/2023]
of the N.I. Act cannot continue in the absence of the company. On
this ground, the petitioner prayed for the dismissal of the
complaint filed by the respondent.
2.2 However, the learned trial court, by its impugned order dated
20/02/2023, dismissed the application filed by the petitioner
stating that the complainant had prosecuted the accused Rohitesh
Nagda in his personal capacity, not as the director of his company.
Thus, there was no requirement of prosecuting the company in
this case, even if it had issued the cheque. The court did not agree
with the argument that a director of a company cannot be
prosecuted without prosecuting the company itself. Hence the
instant petition.
3. In the aforesaid backdrop, I have heard learned counsel for
the petitioner and perused the case file as well as order impugned.
4. Notice was issued to the respondent. He is duly served, but
has chosen not to appear.
5. First and foremost, reference may be had to Apex Court
judgment rendered in Aneeta Hada Vs. Godfathers Travels &
Tours Pvt. Ltd.: (2012) 5 SCC 661. Relevant Para No.64 of the
same, being apposite, is reproduced hereinbelow:
"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,
[2024:RJ-JD:38005] (3 of 4) [CRLMP-5126/2023]
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.
57. In RBI v. Peerless General Finance and
Investment Co. Ltd. [(1987) 1 SCC 424] it has been laid
down that the entire statute must be first read as a whole,
then section by section, clause by clause, phrase by phrase
and word by word. The same principle has been reiterated in
Deewan Singh v. Rajendra Pd. Ardevi [(2007) 10 SCC 528]
and Sarabjit Rick Singh v. Union of India [(2008) 2 SCC
417 : (2008) 1 SCC (Cri) 449].
58. Applying the doctrine of strict construction, we
are of the considered opinion that commission of 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 absolutely
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 of the fact that the company is a juristic person
and it has its own 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. The other categories of offenders can
only be brought in the drag-net 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 [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] which is a
three-Judge Bench decision. Thus, the view expressed in
Sheoratan Agarwal [(1984) 4 SCC 352 : 1984 SCC (Cri)
620] does not correctly lay down the law and, accordingly, is
hereby overruled. The decision in Anil Hada [(2000) 1 SCC 1
: 2001 SCC (Cri) 174] is overruled with the qualifier as
stated in para 51. The decision in Modi Distillery [(1987) 3
SCC 684 : 1987 SCC (Cri) 632] has to be treated to be
restricted to its own facts as has been explained by us
hereinabove."
6. Having had regard to the facts of the present case, as
narrated hereinabove, I see no reason why the benefit of ratio
[2024:RJ-JD:38005] (4 of 4) [CRLMP-5126/2023]
rendered by the Supreme Court be not accorded to the petitioner
herein.
7. Concededly, the cheque was issued by the company named
Kalika Hotel and Restaurant Private Limited, who is not made
party to the complaint instituted by the respondent. The same
being a serious legal lacuna, cannot be countenanced and the
complaint has to be therefore necessarily dismissed.
8. It is so ordered. Petition is allowed.
9. Order dated 20/02/2023 passed by learned Special Judicial
Magistrate (N.I. Act Cases) No.4, Udaipur, in Case No.1552/2017,
is quashed. Complaint filed by the respondent is dismissed.
10. In the parting, I may hasten to add here that even otherwise
it appears to be a case of landlord and tenancy dispute, qua
which, collateral proceedings are already going on between the
parties.
11. In the premise, in any case, the respondent is not remediless
qua the claim of his money from the petitioner and he is at liberty
to enforce the same in accordance with law, if so advised.
(ARUN MONGA),J
243-Sumit/-
Whether Fit for Reporting: Yes / No
Powered by TCPDF (www.tcpdf.org)
