Karnataka High Court
Sri Srinath vs Sri D K Venkatanareshbabu on 14 September, 2015
Equivalent citations: 2016 (2) AKR 356, (2016) 2 ALLCRILR 727, (2016) 2 KCCR 1666, (2016) 1 KANT LJ 490, (2016) 2 BANKCAS 471, (2016) 2 NIJ 58
Author: Rathnakala
Bench: Rathnakala
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 14TH DAY OF SEPTEMBER 2015
BEFORE
THE HON'BLE MRS.JUSTICE RATHNAKALA
CRIMINAL PETITION NO.4993/2015
BETWEEN:
SRI SRINATH
S/O CHANNAKESHAIAH
AGED ABOUT 54 YEARS
RESIDING AT NO.184,
NARASIMHAIAH COMPLEX,
KOTTIGEPALYA,
OUTER RING ROAD,
BENGALURU - 560 091. ...PETITIONER
(BY SRI SACHIDANANDA K., ADV.)
AND:
SRI D.K.VENKATANARESHBABU
S/O D.KRISHNAMURTHY
AGED ABOUT 38 YEARS
RESIDING AT VENKATAPURA
KASABA HOBLI,
PAVAGADA TALUK,
TUMKUR DISTRICT - 561 202. ...RESPONDENT
(BY SRI H.ARAVIND REDDY, ADV.)
THIS CRL.P IS FILED U/S.482 CR.P.C., PRAYING TO
QUASH THE PROCEEDINGS IN C.C.NO.31838/2014 (PCR
NO.23/2012) ON THE FILE OF THE XXII A.C.M.M.,
BANGALORE.
2
THIS CRIMINAL PETITION COMING ON FOR
ADMISSION THIS DAY, THE COURT MADE THE
FOLLOWING:-
ORDER
The petitioner is the accused, who is alleged to have committed the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act').
2. The fact is:
On a private complaint of the respondent herein, alleging that the accused in respect of the loan transaction of Rs.5,00,000/-
issued a cheque and the said cheque when presented to the Bank, bounced with the shara 'Insufficient funds', and even after service of notice on him, he did not pay the loan amount, the jurisdictional Magistrate took cognizance of the matter and procured the accused. He pleaded not guilty to the accusation and the stage of the case is for cross-examination of PW.1.
3. Sri Sachidananda .K, learned Counsel for the petitioner submits that the cheque in dispute is signed by C.Srinath as the 3 Director of M/s.Maruthi Bake Equipments Private Limited. But the demand notice was issued to C. Srinath / the petitioner herein and the private complaint is also filed against C. Srinath only. In that view of the matter, Section 141 of the Act comes into play. The proceedings cannot be sustained without arraigning the Company as the accused.
4. Sri H. Aravind Reddy, learned Counsel for the respondent submits that the accused has not disputed the signature on the cheque in question. He was served with the demand notice in the address of his Company. Even in the complaint, the address of the Company is mentioned. The matter is set down for cross- examination of PW.1 and at this length of time, quashing of the proceedings is not warranted.
5. As reflected in the cheque in question, it is issued by the accused / petitioner in the capacity of the Director of the Company. The complaint allegation is to the effect that the accused availed loan for the purpose of his factory business. In 4 such condition, initial presumption under Section 118 (g) of the Act i.e., the holder of a negotiable instrument is a holder in due course cannot be automatically invoked. Having received the cheque from the Director of the Company and not arraigning the Company as one of the accused is a serious lapse that vitiates the entire proceedings. The Apex Court in the matter of Aneeta Hada Vs. Godfather Travels and Tours Private Limited and connected cases reported in (2012) 5 Supreme Court Cases 661, has held at para No.59, which reads thus:
"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 which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada is overruled with the qualifier as stated in para
51. The decision in Modi Distillery has to be treated to be 5 restricted to its own facts as has been explained by us hereinabove."
6. In the light of the above said reasons, the complainant cannot maintain the prosecution against the accused. The learned Magistrate while taking cognizance has not adverted to this legal proposition and the taking cognizance is vitiated.
7. Accordingly, the petition is allowed.
The proceedings in C.C.No.31838/2014 in PCR No.23/2012, pending on the file of the XXII Additional Chief Metropolitan Magistrate, Bengaluru is quashed.
However, liberty is reserved to the complainant for redressal of his grievance under civil forum, if so advised or need arises.
In view of the disposal of the main petition, I.A.No.2/2015 is disposed of as it does not survive for consideration.
Sd/-
JUDGE nvj