JUDGMENT : 1. Petitioner seeks quashing of the complaint as well as cognizance taken by the learned Chief Judicial Magistrate, Ramban vide order dated 18.07.2019 under section 138 of the Negotiable Instruments Act, 1881 (herein after referred as N. I. Act) in case titled Faiz-Ul-Rehman V/s Ajaz Yousaf. 2. A complaint under section 138 of the N.I. Act, 1881 was filed by the respondent-complainant against the petitioner in the Court of learned Chief Judicial Magistrate, Ramban, alleging that the petitioner had issued three cheques in favour of the respondent in order to discharge liability which had accrued, as rent of the machinery hired by him. These cheques, bearing No. 206364 dated 30.04.2019 for Rs. 6,00,000/-, No. 206363 dated 29.04.2019 for Rs. 50,000/- and No. 206362 dated 10.04.2019 for Rs. 3,00,000/- were drawn on Jammu and Kashmir Bank, Branch Maitra, Ramban from bank account No. 0491010100000160 maintained by the company ‘Uzair Construction Private Ltd.’. When these cheques were presented by the respondent to the banker for encashment, the same were returned unpaid by the banker with the endorsement that the ‘payment stopped by drawer’. On the failure of the petitioner to pay the amount due, a complaint was instituted and the learned Chief Judicial Magistrate, Ramban took cognizance of the same under Section 138 of the Negotiable Instruments Act, 1881 vide its order dated 18.07.2019. 3. It is submitted that the petitioner is only one of the Directors of the Uzair Construction Company Private Ltd. with its office at Govindpura near District Complex Maitra, Ramban. This company is duly registered with the Registrar of the Companies. The petitioner being a Director of the Company entered an agreement with the respondent on 18.09.2018 on behalf of the Company and had taken on rent two JCBs 3DX Rock Breaker machines for JIO Cable work. The aforementioned cheques which were issued by the company in order to discharge its liability which had accrued towards the respondent. 4. The petitioner is aggrieved of the cognizance taken by the trial Court on the ground that cheques were issued in the capacity as Director of Uzair Construction Private limited and not in his individual capacity, but the respondent did not institute the complaint against the Company.
4. The petitioner is aggrieved of the cognizance taken by the trial Court on the ground that cheques were issued in the capacity as Director of Uzair Construction Private limited and not in his individual capacity, but the respondent did not institute the complaint against the Company. It is also submitted that since the respondent has failed to issue notice or institute the complaint against the Company, therefore, the petitioner could not be prosecuted, without Company being arraigned as an accused as the cheques were not issued by the authorized signatory in his personal capacity. 5. The Apex Court in ‘Aneeta Hada vs. Godfather Travels & Tours Private Limited’, (2012) 5 SCC 661 , while considering the similar issue has held as under:- “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.” 6. It is further held as under: “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….……” 7. Similarly, the Hon’ble Apex Court in ‘Himanshu V. B. Shivamurthy and another’ AIR 2019 (SC) 3052 has held as under: “15.
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….……” 7. Similarly, the Hon’ble Apex Court in ‘Himanshu V. B. Shivamurthy and another’ AIR 2019 (SC) 3052 has held as under: “15. The provisions of Section 141 postulate that if the person committing an offence under Section 138 is a company, every person, who at the time when the offence was committed was in charge of or 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. 16. In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused”. 8. In view of the settled position of law, the respondent having failed to arraign the Company as an accused in the complaint, the proceedings in the complaint as well as cognizance taken by the Chief Judicial Magistrate, Ramban under section 138 of Negotiable Instruments Act, 1881 in case titled Faiz-Ul-Rehman V/s Ajaz Yousaf pending in the court of learned Chief Judicial Magistrate, Ramban are hereby quashed. 9. Disposed of accordingly alongwith all the connected applications.