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Madhya Pradesh High Court · body

2022 DIGILAW 170 (MP)

Manoj Gupta v. Mukesh Chandra Virmani

2022-01-31

G.S.AHLUWALIA

body2022
JUDGMENT None for the applicant. Shri Ankur Modi, Counsel for respondent No.1. 1. This application under Section 482 of Cr.P.C. has been filed against the order dated 18.2.2021 passed by 6th Additional Sessions Judge, Shivpuri in Criminal Revision No.46/2020 thereby affirming the order dated 5.3.2020 passed by JMFC, Shivpuri in Criminal Case No.800018/2006 by which the application filed by the applicant under Section 141 of Negotiable Instruments Act has been rejected. 2. The necessary facts for disposal of present application in short are that the respondent Mukesh Chandra Virmani has filed a criminal complaint under Section 138 of Negotiable Instruments Act on the allegations that respondent had invested in the Firm Navniketan Builders Pvt. Ltd. Thereafter, some professional differences arose between the applicant and the respondent, therefore, the respondent requested the applicant to finalize his accounts and it was also agreed upon between the applicant and the respondent that the goods which are with the company of the applicant would continue to remain with the applicant and the applicant would pay Rs.13,00,000/- to the respondent. Accordingly, a post dated cheque of Rs.13,00,000/- was given by the applicant to the respondent. When the respondent deposited the said cheque, it was returned back with an endorsement of 'Insufficient Fund'. Thereafter, the respondent sent a notice to the applicant by registered post dated 14.12.2005 but the applicant refused to receive the registered notice but accepted the notice sent by UPC. 3. The applicant appeared before the Trial Magistrate and filed an application for dismissing the complaint on the ground that the cheque in question was issued by the firm and, therefore, the firm is the primary accused. Neither, the firm has been impleaded as an accused nor any notice was given to the firm and, therefore, the prosecution of the applicant in absence of the firm is not in accordance with law. 4. The said application was rejected by the Trial Court by order dated 5.3.2020 by holding that it would not be appropriate to give any finding at this stage and the objection raised by the applicant shall be decided on merits after the conclusion of trial. 5. 4. The said application was rejected by the Trial Court by order dated 5.3.2020 by holding that it would not be appropriate to give any finding at this stage and the objection raised by the applicant shall be decided on merits after the conclusion of trial. 5. Being aggrieved by the said order passed by the Trial Magistrate, the applicant preferred Criminal Revision before the Revisional Court which too has been dismissed on the ground that in case if the respondent has not impleaded the company/firm, then he would be the sufferer. However, it was also observed that prima facie it appears that the cheque transaction has taken place between the applicant and the respondent, therefore it is not necessary to issue notice to the firm and its Directors. 6. By this application filed under Section 482 of Cr.P.C., the applicant has challenged the proceedings on the ground that in absence of the company he cannot be prosecuted. 7. None appears for the applicant. 8. It is submitted by the counsel for the respondent that concurrent findings of facts have been given by two Courts below and it would not be appropriate by this Court to interfere at this stage. Even the applicant avoided the service of notice/bailable warrant for 10 years and he appeared after 10 years of filing of criminal complaint and now he has moved an application for dismissal of the complaint. Both the Courts below have held that the question of maintainability of the complaint shall be decided on merits after recording the evidence. Thus there is no miscarriage of justice. It is further submitted that from the complaint it appears that it was a personal transaction between the applicant and the respondent and the company has nothing to do with the same. 9. Heard the learned counsel for the respondent. 10. In the complaint, it is specifically mentioned that the respondent had invested in Navniketan Builders Pvt. Ltd. and thereafter on account of commercial differences, the respondent requested the applicant to finalize his entitlements/liabilities with a clear compromise that the goods which are in possession of the company would continue with the applicant and the applicant would give Rs.13,00,000/- to the respondent. Thus, by no stretch of imagination it can be said that the cheque was issued in discharge of personal liability. Thus, by no stretch of imagination it can be said that the cheque was issued in discharge of personal liability. The complaint specifically speaks about the investment made by the respondent in the Company and it was also specifically alleged that the amount of Rs.13,00,000/- was payable on account of his investment in the Company. Furthermore, the cheque has been issued in the name of the Company. 11. Under these circumstances, this Court is of the considered opinion that the cheque was issued in lieu of the investment made by the respondent in the Company. 12. The record of the Court below has been received and it is clear that the notice under Section 138 of Negotiable Instruments Act was issued to the applicant only. 13. The question whether the Director can be prosecuted in absence of the Company is no more res integra. 14. The Supreme Court in the case of Himanshu vs. B. Shivamurthy and another reported in (2019) 3 SCC 797 has held as under: 13. 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. 15. From the facts of this case also, it is clear that the cheque was issued by the Company in discharge of its liability. The primary accused in the present case is the Company/firm to whom neither a notice under Section 138 of Negotiable Instruments Act was issued nor it has been made an accused. In absence of the primary accused the Director cannot be fastened with his vicarious liability. Furthermore, the applicant had raised a pure question of law which can be ascertained on the basis of averments made in the complaint. The Courts below committed material illegality by postponing the decision on this issue. 16. In absence of the primary accused the Director cannot be fastened with his vicarious liability. Furthermore, the applicant had raised a pure question of law which can be ascertained on the basis of averments made in the complaint. The Courts below committed material illegality by postponing the decision on this issue. 16. Considering the averments made in paragraphs 2 and 3 of the complaint coupled with the fact that the cheque was issued by the Company which was signed by the applicant in the capacity of Director, this Court is of the considered opinion that in absence of the Company as an accused, the applicant cannot be prosecuted in the capacity of Director. 17. Accordingly, the complaint filed by the respondent is liable to be dismissed. 18. Ex-consequenti, the order dated 18.2.2021 passed by 6th Additional Sessions Judge, Shivpuri in Criminal Revision No.46/2020 and order dated 5.3.2020 passed by JMFC, Shivpuri in Criminal Case No.800018/2006 are set aside and the complaint filed by the respondent is dismissed. 19. The application succeeds and is hereby allowed.