The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK CRLMC No.4149 of 2015 Bijaya Manjari Satpathy …. Petitioner Mr. Mohit Agarwal, Advocate -Versus- State of Odisha & Another Opposite Parties Mr. Tapas Kumar Praharaj, SC for OP No.1 Mr. S.R. Mulia, Advocate for OP No.2 …. CORAM: JUSTICE R.K. PATTANAIK DATE OF JUDGMENT:24.04.2023 1. Instant petition under Section 482 Cr.P.C is at the behest of the petitioner for quashing of the criminal proceeding in connection with 1.C.C. Case No.68 of 2013 pending in the file of learned S.D.J.M., Angul on the sole ground that the prosecution for an offence under Section 138 of the N.I. Act against her is not maintainable in absence of the company, namely, M/s. Bijoylaxmi Information & Technology Marketing Pvt. Ltd. as an accused. 2. As per the complaint, the complainant-opposite party No.2 responding to an advertisement in respect of a housing project contacted the petitioner to purchase of land at Bhubaneswar and accordingly paid the latter, an amount of Rs.16 lac on different occasions and when no project was started, she former demanded for refund for which a post-dated cheque dated 25th December, 2012 drawn on IndusInd Bank, Angul Branch, Angul was issued by her, however, the same after being deposited for encashment returned unpaid with a remark ‘stop payment’. Thereafter, opposite party No.2 sent a legal notice to the petitioner but no response was received and since the amount was not returned, the complaint was filed for an offence punishable under Section CRLMC No. 4149 of 2015 Page 1 of 7 Bijaya Manjari Satpathy Vrs. State of Odisha & Another 138 of the N.I. Act having been committed by the petitioner. On such complaint being filed in 1.C.C. Case No.68 of 2013 before the Court of learned S.D.J.M., Angul, the petitioner has approached this Court challenging its maintainability on the ground that the company has not been made a party to it.
Legal Reasoning
3. Heard, Mr. Agarwal learned counsel for the petitioner and Mr. Mulia, learned counsel for opposite party No.2 besides Mr. Praharaj, learned Standing Counsel for the State. 4. Mr. Agarwal, learned counsel for the petitioner submits that the complaint has been filed by opposite party No.2 against the petitioner in her individual capacity even though the alleged cheque was issued by the company from the account maintained by the company, wherein, the petitioner is the Managing Director. It is further submitted that the company is a distinct person and legal entity and an officer of the company can only be held vicariously liable for the acts of the company which is the principal accused and in absence of the company as an accused, a complaint against any of its officials cannot proceed and therefore, in the present case, the proceeding vis-à-vis the petitioner is required to be quashed. While contending so, Mr. Agarwal, learned counsel for the petitioner refers to Section 141 of the N.I. Act which is with regard to a legal fiction raised against a company for being prosecuted under the said Act. A decision of this Court in Lalit Beriwala Vrs. State of Orissa & Another reported in 2013(I) ILR-CUT-905 has been placed reliance on by Mr. Agarwal to contend that in absence of the company in question not being an accused, the prosecution against the petitioner for any such offence under Section 138 of the N.I. Act cannot be entertained, morefully when, she has issued and drawn a cheque in the name of the company. One more citation is referred to by Mr. Agarwal in the case of Himanshu Vrs. B. CRLMC No. 4149 of 2015 Page 2 of 7 Bijaya Manjari Satpathy Vrs. State of Odisha & Another Shivamurthy and Others AIR 2019 SC 3052 is also cited in support of the contention of the petitioner. In essence, the argument of Mr. Agarwal is that the petitioner not in individual capacity issued the alleged cheque but as the Managing Director of the company which is a company incorporated and registered under the Company’s Act, 1956 and therefore, in absence of the said company as an accused in the complaint, the prosecution under Section 138 of the N.I. Act is not maintainable. 5. On the other hand, Mr. Mulia, learned counsel for opposite party No.2 submits that on a reading of the complaint, a copy of which is at Annexure-3, it would appear that the complainant- opposite party No.2 did not have any business or any transaction with the company and the petitioner having been received the amount of Rs.16 lac was liable in her personal capacity and therefore the company is not required to be arrayed as an accused, even though, she issued the alleged cheque in the name of the company. In other words, according to Mr. Mulia, since there was no dealing with the company and the petitioner though she is its Managing Director but having received the amount from opposite party No.2 in her personal capacity, there was no need to add the company as an accused for the prosecution under Section 138 of the N.I. Act. While advancing such an argument, Mr. Mulia cited a decision of the Apex Court in Mainuddin Abdul Sattar Shaikh Vrs. Vijay D. Salvi decided in Criminal Appeal No.
Decision
1472 of 2009 and disposed of on 6th July, 2015. 6. The moot question is, whether, the petitioner can be held liable in her personal capacity when the company has not been arrayed an accused in the complaint? In so far as Section 141 of the N.I. Act is concerned, it is with regard to an offence committed by a company and to the effect that not only the company but also every person, who at the time the offence was CRLMC No. 4149 of 2015 Page 3 of 7 Bijaya Manjari Satpathy Vrs. State of Odisha & Another committed or in charge of and responsible to the company for the conduct of its business shall be deemed to be guilty of the offence under Section 138 of the N.I. Act and liable to be proceeded with and punished. With regard to vicarious liability, the settled law has been discussed and laid down by the Apex Court in Aneeta Hada v. M/s. Godfather Travels & Tours Pvt. Ltd AIR 2012 SC 2795 which is with reference to Section 141 of the N.I. Act. There is no denial to the fact that any such offence, if committed by a company punishable under Section 138 of the N.I. Act, not only the company but also the officials who are in charge and responsible for its business shall be made jointly liable and be subject of prosecution. In Lalit Beriwala (supra), the accused therein was a whole time Director and she issued cheque as the authorized signatory of the company and when the cheque was bounced back, a complaint under Section 138 of the N.I. Act was filed and in that context, it was held by this Court that the company unless arrayed as an accused, prosecution under Section 138 of the N.I. Act cannot be maintained and as a result, the order of cognizance was quashed. Since the petitioner had issued the cheque in official capacity and as an authorized signatory of the company and it had been dishonoured, the Court in the aforesaid decision reached at a conclusion that the company should have been made an accused in view of Section 141 of the N.I. Act and it having not been so arrayed, the complaint cannot be maintained of the offence under Section 138 of the N.I. Act. Similarly in Himanshu (supra), the Apex Court while dealing with a question as to if a company is necessarily to be an accused held and observed that it has to be arrayed so in view of Section 141 of the N.I. Act. 7. The decisions which have been referred to by Mr. Agarwal, learned counsel for the petitioner are with regard to a question as to if a complaint can be entertained when the company has not CRLMC No. 4149 of 2015 Page 4 of 7 Bijaya Manjari Satpathy Vrs. State of Odisha & Another been arrayed as an accused. In the aforesaid decisions, the company was involved and the cheques were issued by the company through its authorized signatory and in such view of the matter, it was held that the company is the principal accused and hence the complaint in its absence against any of the officials including the authorized signatory to be not maintainable. In the case at hand, however, Mr. Mulia, learned counsel for opposite party No.2 submits that the petitioner though issued cheque in the name of the company but the amount was received by the petitioner in her personal capacity and there was no dealing with the company and therefore, there was no need to array the company as an accused. The decision in Mainuddin Abdul Sattar Shaikh (supra) is pressed into service by Mr. Mulia to contend that there was no need for the company to be an accused in the complaint. In the said decision, the cheque was drawn by the accused in her individual capacity and not as the Director of the company and after the cheque was dishonoured, the complaint was filed and the accused was at last acquitted which was challenged by the complainant but the order of acquittal was not disturbed by the Bombay High Court and being aggrieved, the Apex Court was moved which finally concluded that since the cheque was drawn in individual capacity even though the accused is a Director of the company, the accused to be held liable for the alleged offence even though the company has not been made a party and thereby overruled the decision of the Bombay High Court as well as the court of first instance. While referring to a decision in P.J. Agro Tech Limited and others Vrs. Water Base Limited reported in (2010)12 SCC 146, the Apex Court in the decision of Mainuddin Abdul Sattar Shaikh (supra) observed that a personal liability may be upheld even though the cheque was drawn by the employee of the company from her personal account and for that, the company and its Director cannot be CRLMC No. 4149 of 2015 Page 5 of 7 Bijaya Manjari Satpathy Vrs. State of Odisha & Another held liable, even if, it be for discharging the dues of the company. The Apex Court reached at such a conclusion by considering the essential ingredients of the Section 138 of the N.I. Act which are to the effect that the person who is be made liable should be the drawer of the cheque and should have drawn the cheque on an account maintained by him with a banker for discharge the whole or part of any debt or any other liability. Since, in the aforesaid case, the cheque was drawn by the accused in individual capacity and not as a Director of the company, it was held by the Apex Court that the liability cannot be avoided. 8. In the present case, there is no averment in the complaint stating that the complainant-opposite party No.2 ever had any transaction with the company and in that connection, he had paid the amount to the company. Rather, the complaint alleges that opposite party No.2 paid an amount of Rs.16 lac to the petitioner in cash, cheques and Demand Draft on different occasions and it was received by the petitioner in her individual capacity. Even though the petitioner issued the cheque as the Managing Director of the company but then considering the facts pleaded in the complaint that the amount was received in individual capacity, assuming for the sake of argument that the cheque was issued to discharge the liability of the company, considering the legal position set out in Mainuddin Abdul Sattar Shaikh (supra), it has to be held that the proceeding under Section 138 of the N.I. Act at the instance of opposite party No.2 cannot be held as not maintainable in absence of the company as the principal accused. The decisions in Lalit Beriwala and Himanshu (supra) do not apply to the facts and circumstances of the present case which are related to the cheques issued by and on behalf of the company for discharge of a liability of the company. CRLMC No. 4149 of 2015 Page 6 of 7 Bijaya Manjari Satpathy Vrs. State of Odisha & Another 9. Hence, considering the facts alleged in the complaint, it is prima facie made to appear that opposite party No.2 did not have any dealing with the company rather had paid the amount to the petitioner, who had received it, in her individual capacity and notwithstanding the fact that the alleged cheque was issued in the capacity and as the Managing Director of the company, she cannot be escape from the liability and therefore, the Court reaches at an irresistible conclusion that the complaint is well maintainable. 10. Thus, it is ordered. 11. In the result, the CRLMC stands dismissed. BALARAM BEHERA Digitally signed by BALARAM BEHERA Date: 2023.05.04 21:51:27 +05'30' (R.K. Pattanaik) Judge Balaram CRLMC No. 4149 of 2015 Page 7 of 7