High Court of Orissa
Case Details
IN THE HIG E HIGH COURT OF ORISSA AT CUTT CUTTACK CRLMC No. 3234 of 2017 ami Rajendra Swami …. Petitioner Mr. S.S. Das, Sr. Mr. R.K. Malick, Sr. Advocate alick, Advocate -versus- State of Orissa an and another …. Opp. Parties Op a Mohanty, ASC Mrs. Siva Moh Sr. Advocate Mr. Ashok Mohanty, Sr. for O.P. No.2 for CORAM: THE HON’BLE BLE MR. JUSTICE CHITTARANJAN D JAN DASH Date of Judgment: 01.08.2025 Chittaranjan Dash, ash, J. 1. The Petitio Petitioner, namely Rajendra Swami, Direct Director of Right Step Media Servi Services Private Limited, has filed this this application challenging the leg the legality of the order of cognizance dated dated 03.09.2016 passed by the learn e learned S.D.J.M.(S), Cuttack in connection nection with 1CC Case No. 746 of 20 6 of 2016, wherein the learned court took cog ok cognizance of the offence under under Section 138 of the N.I. Act and d and directed the Petitioner to appea appear and answer the accusation, initially b tially by issuance of a bailable warr e warrant and subsequently by issuance of ce of an N.B.W. vide order dated 30 ated 30.08.2017. 2. The backgr background facts of the case are that the Com e Complainant is the proprietor of or of the firm, namely M/s. Fast Commun mmunication, an INS-accredited ag ted agency engaged in the media publicit ublicity business CRLMC No. 3234 of 4 of 2017 Page 1 of 13 throughout India, India, having its office at Markat Naga Nagar, C.D.A., Cuttack. The accu e accused is a company in the name and st and style of M/s. Right Step Medi Media Services Pvt. Ltd., represented t nted through its Director, Rajendra ajendra Kumar Swami, having its office n ffice near Mataji Mandir, Soorsaga orsagar Lake, Bikaner, Rajasthan, who i who is also the Director of Doco Docoss Multimedia Private Ltd., engag engaged in the business of media media activation and sale of mobile handset andsets. Pursuant to a mutual agree l agreement between the parties, the said said companies appointed the Com e Complainant, i.e., M/s. Fast Communicati nication, as their authorised advert vertisement agency for creating and and publishing advertisements of nts of Docoss Mobile and other media comp companies for a valid period of tw of two years from the date of publication
Legal Reasoning
cation of the first advertisement, i.e. nt, i.e., 27th April, 2016. 3. According ording to the complaint, one of the Dire
Legal Reasoning
Directors, Mr. Rajendra Swami wami @ Rajendra Kumar Swami, req i, requested the authorised staff, n taff, namely Mr. Manish Ahuja, of the C the Complainant firm to publish ad lish advertisements in different newspapers papers circulated throughout India. India. Pursuant to the release order issued ssued by the said accused, the adve e advertisements were published in Daini Dainik Bhaskar, Rajasthan Patrika, atrika, Indian Express, and Dainik Bhaskar’s skar’s web portal within the stipulate ipulated time. 4. The afores aforesaid advertisements were published a shed at a cost of ₹88,50,000/- (Rup (Rupees Eighty-Eight Lakhs Fifty Thou Thousand only) and, in discharge harge of the said liability, four cheques w ues were issued, namely: (i) Cheque heque No. 874240 dated 15.06.2016 for for ₹56,50,000/- Rupees Fifty-Six Lakhs Fifty Thousand only (Rupee d only), CRLMC No. 3234 of 4 of 2017 Page 2 of 13 (ii) Cheque heque No. 874239 dated 05.05.2016 for for ₹11,00,000/- (Rupee ees Eleven Lakhs only), (iii) Cheque heque No. 000051 dated 10.05.2016 for 6 for ₹9,00,000/- Rupees Nine Lakhs only), and (Rupee (iv) Cheque heque No. 000052 dated 20.06.2016 for for ₹12,00,000/- Rupees Twelve Lakhs only), totalling (Rupee ing ₹88,50,000/- Rupees Eighty-Eight Lakhs Fifty Thous (Rupee Thousand only), drawn rawn on UCO Bank, Bikaner Branch ranch, Bikaner, Rajasth ajasthan, in favour of the Complainant. 5. Out of the of the said four cheques, two, namely C ely Cheque No. 874239 dated 05.0 d 05.05.2016 for ₹11,00,000/- (Rupees Ele es Eleven Lakhs only) and Cheque heque No. 000051 dated 10.05.2016 for 6 for ₹9,00,000/- (Rupees Nine La ne Lakhs only), amounting to ₹20,00,000 00,000/- (Rupees Twenty Lakhs only hs only), were presented before the Complain mplainant’s bank and honoured. Ho d. However, the remaining two cheques, i. ues, i.e., Cheque No. 874240 dated dated 15.06.2016 for ₹56,50,000/- (Rupee Rupees Fifty-Six Lakhs Fifty Tho Thousand only) and Cheque No. 000 . 000052 dated 20.06.2016 for ₹12 ₹12,00,000/- (Rupees Twelve Lakhs only hs only), totalling ₹68,50,000/- (Rup (Rupees Sixty-Eight Lakhs Fifty Thous Thousand only), when presented b nted before the payee’s bank, i.e., IDBI B DBI Bank, CDA Branch, Sector-9, 9, CDA, Cuttack, on 13.07.2016, were d were dishonoured for the reason “Fu n “Funds Insufficient”. The payee’s bank in ank intimated the Complainant of the t of the dishonour vide memo dated 13.07.20 .07.2016. 6. Upon rece n receipt of such intimation, the Complain mplainant issued two legal notices otices on 15.07.2016, one to Docoss Multi Multimedia Pvt. Ltd. at Jaipur, Raja r, Rajasthan, and another to Right Step Med p Media Services Pvt. Ltd. at Bikan Bikaner, Rajasthan, in accordance with Sec th Section 138(b) CRLMC No. 3234 of 4 of 2017 Page 3 of 13 of the N.I. Act, Act, calling upon the accused companies panies and their Directors to pay t pay the dishonoured cheque amounts. Howe However, neither the companies no ies nor the Directors replied to the legal n legal notices nor made payment of ent of the dishonoured cheque amounts, for ts, for which the Complainant filed t filed a complaint before the learned court, court, whereupon cognizance was tak taken and process was issued against the nst the Petitioner. 7. Mr. S.S. D S.S. Das, learned Senior Advocate appear appearing for the Petitioner, assailed ssailed the impugned order primarily on the n the ground that the order dated 03 ted 03.09.2016 is erroneous both in fact an act and in law. It was contended th ded that the complaint, while arraying the ng the Petitioner under Section 141 n 141 of the N.I. Act, did not implead the c d the company as an accused and, and, in the absence of the company, no ny, no vicarious liability could be ld be fastened on the Petitioner. Conseq onsequently, the Director could no uld not have been held liable for the off he offence under Section 138 read read with Section 141 of the N.I. Act. It w ct. It was further contended that in that in the case of a private limited com d company, the Director has only s only limited liability and acts on beh n behalf of the company, and th d therefore, in the absence of the company pany as a party, the entire proceedi oceeding stood vitiated and was liable to be to be quashed in view of the decisi decision in D.J. Rastogi v. State of U.P. .P. & Another reported in 2014 ( 2014 (1) Civil Law Journal 462. The impu e impugned order was further assail assailed on the ground that, as per the c the case of the Opposite Party No rty No. 2, the cheque was issued in Bikaner ikaner, the entire transaction took p took place in Jaipur and Bikaner, the agre e agreement was executed in Bikan Bikaner, Docoss Company was situated in ted in Jaipur, and Right Step Compa Company was in Bikaner. Consequently, a ntly, a complaint was already filed filed before the learned ACMM, Jaipur. Th ur. Therefore, in CRLMC No. 3234 of 4 of 2017 Page 4 of 13 view of the afore aforesaid complaint before the ACMM, MM, Jaipur, the complaint before efore the S.D.J.M.(S), Cuttack lacked juri d jurisdiction to entertain the mat e matter. It was also contended that the at the complaint petition was not sp not specific as to when the transaction took n took place so as to confer territori erritorial jurisdiction upon the court for t for the alleged complaint. The im he impugned order was also challenged on ed on the ground that the authorise thorised signatory of the Opposite Parti Parties, having colluded with th ith the Opposite Parties, had already i ady instituted a complaint case in ase in connection with Siprapath P.S. Case Case No. 466 of 2016 on the very e very same facts but under a different s rent statute, and therefore, the pres e present complaint was not maintainable inable. Mr. Das, learned Senior Adv ior Advocate, also argued that the Petitioner tioner was neither a Director of Do of Docoss Mobile at the relevant time n ime nor was he involved at the tim the time of publication and placing of the or the order or even at the time of fili of filing of the complaint on 10.08.2016. 2016. Hence, the liability of Docoss ocoss Mobile at the relevant time could no uld not attract the offence, and the Pe the Petitioner, who at no point of time look e looked after the affairs of Docoss M coss Mobile Company, could not be made li ade liable for the offence under the er the N.I. Act. It was further submitted tha ed that there was no averment in the t in the complaint indicating that the Petition etitioner, being a Director, was resp s responsible for the day-to-day affairs of th s of the company. In the absence of ce of such an averment, no liability could b could be fastened upon him for the a r the alleged dishonour of the cheque. Accor Accordingly, the cognizance of of of offences implicating the Petitioner w ner was beyond jurisdiction and, be and, being illegal, was liable to be quashed 8. Mr. Ashok Ashok Mohanty, learned Senior Advocate ap cate appearing on behalf of the Oppo Opposite Parties, countered the submission issions advanced CRLMC No. 3234 of 4 of 2017 Page 5 of 13 by the learned cou ed counsel for the Petitioner. Drawing the a g the attention of this Court to the fa the factual position, he submitted that the p t the plea of non- service of notice o tice on the Petitioner is wholly false. He con e contended that the Petitioner, ha er, having duly received the notice, appr , approached the Hon’ble Supreme reme Court in S.L.P. No. 3020/2018, seeki seeking transfer of the case from th rom the jurisdiction of the Court at Cuttack uttack to Bikaner. The Hon’ble Sup e Supreme Court, having declined the s the said prayer, directed the Peti e Petitioner to deposit the entire chequ cheque amount. Therefore, the arg he argument advanced on behalf of the Pet he Petitioner that no notice was serv as served either on the companies or on th on the Directors stands nullified. M ied. Mr. Mohanty further submitted that the hat the Petitioner, being a Director o ctor of the companies, was responsible for th e for their day-to- day affairs and wa nd was also the signatory to the cheques, m ues, making him liable for the offen offence. The submission that no specific av ific averment was made in the compl complaint regarding his responsibility in the in the day-to-day affairs of the comp e company, according to him, was made on de only to evade liability. He also also drew the attention of this Court to t rt to the transfer petition filed befo d before the Hon’ble Supreme Court by the by the Petitioner, wherein he had n had not only corresponded as Director of tor of Right Step Media Services Pv ces Pvt. Ltd. but had also received commun mmunications on behalf of the said e said company relating to the business tr ness transactions. The legal notice is otice issued to the Petitioner clearly reveale evealed his name as Director of Rig of Right Step Media Services Pvt. Ltd. as td. as well as of Docoss Multimedi timedia Pvt. Ltd. The averments made by th by the Petitioner in the transfer pet er petition further depicted his position as on as Director of M/s. Right Step Step Media Services Pvt. Ltd. and M nd M/s. Docoss Multimedia Pvt. L Pvt. Ltd., as well as his authority to engage engage M/s. Fast CRLMC No. 3234 of 4 of 2017 Page 6 of 13 tion Communication ts for publishing advertisements in different in newspapers circula circulated throughout India. 9. Having reg ing regard to the contentions of the parties a arties as raised in course of the hear e hearing, the Petitioner has challenged the d the order dated 03.09.2016 primar primarily on the grounds that the prosecu rosecution is not maintainable unde e under Sections 138 and 141 of the N.I. A N.I. Act without arraying the comp company as an accused; that the complain laint lacks any averment showing howing that the Petitioner was in char charge of and responsible for th for the conduct of the company’s busine business; that no statutory notice un tice under Section 138 of the N.I. Act was se was served on the company; and that d that there was no legally enforceable debt debt or liability either against the P st the Petitioner personally or against the co the company, the Board of Directo irectors having never authorised him to im to issue the cheques in questio uestion 10. On consid consideration of the pleadings and submiss bmissions of the parties, the challen challenge to the order of cognizance dated dated 03.09.2016 essentially gives ri ives rise to three issues for determination, na ion, namely: (i) whether the er the prosecution under Sections 138 and 8 and 141 of the N.I. Act is n ct is not maintainable for want of impleadm pleadment of the company as any as an accused; (ii) whether the er the complaint lacks necessary avermen erments showing that the Pet he Petitioner was in charge of and responsi sponsible for the conduct of t ct of the company’s business and whether n ether no statutory notice was was served as required under Section 13 on 138(b) of the ct; and N.I. Act; and CRLMC No. 3234 of 4 of 2017 Page 7 of 13 (iii) whether the there was no legally enforceable debt debt or liability either again against the Petitioner personally or a or against the company, it any, it being contended that the Board of Di of Directors had never author authorised him to issue the cheques in questi question. These issues are ex are examined hereinafter. 11. For Issue ( sue (i), the Petitioner contends that the pro the prosecution is not maintainable a able as the company, Right Step Media Se dia Services Pvt. Ltd., has not been t been arrayed as an accused, and therefore, n fore, no vicarious liability can be fa be fastened upon him under Section 141 141 of the N.I. Act. However, th er, the record reveals that the Opposite posite Party has impleaded all the D ll the Directors as parties to the complaint a laint and has also taken steps to impl o implead the company itself. Even assumin suming there was any initial omissi omission, the law recognises that such o uch omission is curable and that that the complainant may take steps steps even at a subsequent stage t stage to bring the company on record, so l d, so long as the cognizance of the of the offence itself is based on legally gally sustainable grounds. In fact, fact, the Opposite Party has stated to ha to have already moved to include t clude the company as an accused, and nothin nothing prevents the complainant fr nant from amending the cause title even at t en at this stage to cure the defect, if a ect, if any. The object object of Section 141 is to fasten liability bility upon those who were in cha in charge of and responsible for the cond e conduct of the company’s busine business when the offence was committed, itted, apart from the company itse y itself. The materials on record indicat indicate that the cheques were issu e issued and signed by the Petitioner in his in his capacity as Director, and the t d the transaction itself was initiated by him o him on behalf of the company. In s y. In such circumstances, the omission to m n to mention the CRLMC No. 3234 of 4 of 2017 Page 8 of 13 company’s name i name in the initial cause title, when steps ha teps have already been taken to corr o correct it, cannot be a ground to hold the p d the prosecution itself as not m t maintainable. Accordingly, the content ontention of the Petitioner that the at the prosecution is vitiated for non-imple impleadment of the company does does not merit acceptance. 12. For Issue ( sue (ii), it is argued by the Petitioner that n r that no statutory notice, as required quired under Section 138(b) of the N.I. Act, . Act, was served either upon the com the company or upon the Petitioner personal rsonally, and that the complaint does nt does not contain specific averments as to h as to how he was in charge of and r d responsible for the conduct of the busi e business of the company at the rel the relevant time. These subm e submissions, however, do not hold good o good on the facts of the present cas nt case. The complaint attributes to the Pe the Petitioner the initiation of the a the agreement with the complainant and i t and issuance of cheques in his ca his capacity as Director. The record reve reveals that on 19.04.2016, the Pe the Petitioner, in his capacity as Director, i ctor, initiated the business arrangem rangement with the complainant for the the purpose of media advertiseme tisements and issued cheques towards disch discharge of the agreed liability, in lity, including cheque no. 874240 dated 1 ated 15.06.2016. These cheques wer es were dishonoured on 13.07.2016 for insuf r insufficiency of funds. Though the gh the Petitioner has placed reliance on his on his resignation from the Directo Directorship of Docoss Multimedia Pvt a Pvt. Ltd. on 06.07.2016, such r such resignation came after he had already e eady executed the agreement and iss nd issued the cheques on behalf of the com he company. The cause of action, th ion, therefore, flows from acts undertaken by ken by him while holding office as ce as Director, and he cannot be absolved olved of liability merely by subsequ bsequently resigning. CRLMC No. 3234 of 4 of 2017 Page 9 of 13 13. More impo e importantly, in the transfer petition filed filed before the Hon’ble Supreme preme Court seeking transfer of the present resent complaint from Cuttack to B k to Bikaner, the Petitioner himself admitte dmitted his status as Director and and acknowledged receipt of statutory tory notices. In paragraph (v) of th ) of the said petition, the Petitioner categori tegorically stated as follows: “The Resp his advoca post to one Rajasthan Services Pv in accorda of Negotia above men notices issu Petitioner 14.07.2016 marked as Respondent after return of the cheques, th vocate, issued two legal notices by regi one M/s Docoss Multimedia Pvt. Ltd. at J han and another to M/s Right Step es Pvt. Ltd. office situated at Bikaner, Raja ordance with the provision under Section otiable Instruments Act, 1881 with regar mentioned dishonour of the cheques. The s issued by the Respondent were received ner herein. True copy of legal notices 2016, which was filed is annexed herewi d as Annexure – P5 (pages 18 to 19).” s, through registered . at Jaipur, tep Media Rajasthan, tion 138(b) gard to the . The legal ived by the ices dated rewith and Thus, the p , the plea that no statutory notice under Sec er Section 138(b) of the N.I. Act was ct was served upon either the company or th y or the Petitioner personally stands tands answered by the Petitioner’s own ad wn admission on oath before the Ho the Hon’ble Supreme Court. 14. Under Sec er Section 58 of the Indian Evidence Act, Act, 1872, facts admitted need no ed not be proved. The admissions ma s made by the Petitioner in the n the transfer petition were voluntary, su ry, supported by affidavit, and mad d made on oath before a competent court of ourt of law. Such admissions dispen dispense with the need for further proo r proof and can legitimately be re be relied upon by this Court while cons considering the legality of the orde e order of cognizance. An accused who, in p o, in proceedings before a competen petent court, acknowledges his status in re s in relation to a CRLMC No. 3234 of 4 of 2017 Page 10 of 13 company and his d his knowledge of a complaint filed ag iled against him, cannot subsequent equently plead ignorance of notice or deny deny such status in a proceeding eding arising out of the same transacti ansaction. These admissions, havin having been made consciously and on on oath, carry significant eviden evidentiary value and must be accepted epted as binding against the maker maker unless shown to be erroneous or s or withdrawn, which is not the ca the case here. Accordingl rdingly, these undisputed admissions, when , when read with the complaint’s int’s specific reference to the Petitioner itioner’s role in initiating the agree agreement and issuing the cheques, prima f rima facie satisfy the statutory requi requirement under Section 141 of the N.I. e N.I. Act that he was a person in c n in charge of and responsible for the con e conduct of the business of the com the company in relation to the transaction in q on in question. 15. For Issue sue (iii), the Petitioner contends that the hat there was no legally enforceabl rceable debt or liability and that the che he cheques were issued merely as s ly as security, without any authority from th rom the Board of Directors to bind th bind the company. It is further urged that a c hat a civil dispute between the parti parties is already pending, which, accord according to the Petitioner, renders ainable. enders the criminal prosecution unsustainable These argu e arguments are primarily matters of defe f defence which raise disputed que d questions of fact, requiring appreciation o ation of evidence. The complaint spe int specifically alleges that the cheques wer es were issued in discharge of liabil liability arising from the business transacti nsaction initiated by the Petitioner h ioner himself on behalf of the company. The y. The allegation that the cheques w ques were issued only as security is not born borne out from the complaint or t nt or the admitted documents but is a defen defence that can only be adjudica judicated at trial. Similarly, whether the er the Board of CRLMC No. 3234 of 4 of 2017 Page 11 of 13 Directors authoris thorised the Petitioner or whether the che he cheques were issued beyond his nd his authority are also issues of evide vidence, which cannot be conclusi nclusively determined at this stage. Even assum assuming that a civil dispute is pending b ding between the parties, it is well se well settled that the existence of a civil reme l remedy does not bar prosecution un tion under Section 138 of the N.I. Act, whic t, which creates a distinct statutory o utory offence for dishonour of cheques. Th es. The criminal liability under Sec er Section 138 is independent of civil proce l proceedings and is intended to enha o enhance the credibility of commercial trans l transactions. Therefore, efore, these contentions cannot be grounds f unds for quashing the order of cogn f cognizance in exercise of jurisdiction und on under Section 482 Cr.P.C. and m and must be left to be determined in the cou the course of trial on the basis of evid of evidence adduced by the parties. 16. The Petiti Petitioner also seeks to question the the validity of cognizance on the on the ground that no statutory notice und ce under Section 138(b) of the N.I. e N.I. Act was served upon either the comp e company or the Petitioner persona ersonally. This plea also stands answer nswered by the Petitioner’s own own conduct in approaching the Hon’bl on’ble Supreme Court seeking tran g transfer of the complaint from Cuttack ttack to Bikaner, which unequivoca uivocally demonstrates his knowledge of the of the complaint and the transactio nsaction giving rise to it. Once actual kn al knowledge is established, the tec the technical objection regarding notice lose ce loses its force, particularly when when the Petitioner, instead of disputing puting receipt of intimation, actively ctively sought transfer of the case itself. 17. To summa ummarise, the plea of non-impleadment of th t of the company is not tenable in vi e in view of the steps already taken by the c y the complainant and the curable na ble nature of such omission. The contention entions regarding CRLMC No. 3234 of 4 of 2017 Page 12 of 13 absence of averme averments and want of statutory notice stan e stand answered by the Petitioner itioner’s own admissions made on oath oath before the Hon’ble Supreme preme Court, which, under Section 58 of 58 of the Indian Evidence Act, disp ispense with the need for further proof. T roof. The plea of absence of legally egally enforceable liability or of issuance of nce of cheques as security, as well well as the pendency of civil proceedin ceedings, are all matters of defence efence raising disputed questions of fact wh act which cannot be gone into at this at this stage and must be left to be determine ermined at trial. 18. In view of iew of the foregoing discussion on all three three issues, this Court finds no il no illegality, impropriety or perversity in sity in the order dated 03.09.2016 .2016 taking cognizance of the offence und ce under Section 138 of the Negotia egotiable Instruments Act against the Petitio Petitioner. 19. For the re the reasons as above, this Court is not co not convinced to interfere with the th the order of cognizance in exercise of se of jurisdiction under Section 482 n 482 Cr.P.C. 20. According ordingly, the CRLMC stands dismissed sed. Pending applications, if any
Decision
, if any, are also disposed of. (Chittaranjan Da n Dash) Judge Bijay Signature Not Verified Digitally Signed Signed by: BIJAY KETAN SAHOO Reason: Authentication Location: HIGH COURT OF ORISSA Date: 05-Aug-2025 11:18:12 CRLMC No. 3234 of 4 of 2017 Page 13 of 13