ORDER

DEEPAK KUMAR TIWARI, J. --

1. Heard.

2. Being aggrieved with the order dated 29.8.2018 passed in regular Criminal Case No.33571/2018 by the Judicial Magistrate First Class, Durg, whereby, an offence under Section 138 of the Negotiable Instrument Act, 1881 (in short “the Act, 1881”) has been registered and also the order dated 30.5.2019, whereby, the charges have been framed, this petition has been filed by the petitioner for quashing of the said criminal proceedings.

3. Brief facts of the case are that the respondent filed a complaint under Section 138 of the Act, 1881 alleging that in the year 2012, the petitioner took a loan of Rs.5 lakhs for business use and issued a cheque dated 2.7.2018 with regard to Account No.915020034645236, which is maintained in the Axis Bank, Nehru Nagar, Bhilai in the name of BSR Health Ventures Private Ltd., however, on presentation of such cheque on 4.7.2018, the said cheque got dishonoured on the ground of insufficient funds. Hence, a legal notice was sent in the name of the petitioner but spite of such notice, when the petitioner did not pay the amount of the cheque, the complaint case was filed.

4. Learned counsel for the petitioner would submit that for maintaining prosecution under Section 141 of the Act, 1881, while dealing with an offence of dishonour by Companies, arraigning of a company as an accused is imperative. He submits that in the matter of Aneeta Hada V. Godfather Travels & Tours Private Limited, (2012) 5 SCC 661, the principle in this regard has been well settled by the three Judge Bench of Hon'ble the Supreme Court, which was reiterated in the matter of Himanshu Vs. B. Shivamurthy and another, (2019) 3 SCC 797. Therefore, learned counsel prays that in absence of the Company being arraigned as an accused, the present complaint against the petitioner is not maintainable. Hence, he prays to allow the petition and quash the criminal proceedings.

5. On the other hand, learned counsel for the complainant would submit that the cheque was not issued by the petitioner in the capacity of the Director of the Company but in fact, the loan was taken by him in his personal capacity, therefore, no offence can be said to have been committed by the Company, therefore, the complainant has rightly impleaded the petitioner alone as a party in the complaint case. Learned counsel further submit that as the present petitioner is the Director of both the companies, therefore, he, in a deceitful manner, has issued the cheque in the name of the concerned Company.

6. Heard learned counsel for the parties and also perused the documents annexed along with the petition.

7. In Himanshu (supra), the law relating to Offence by companies has been clarified. There relevant paras 7, 12 & 13 reads thus :

“7. The first submission on behalf of the appellant is no longer res integra. A decision of a three Judge Bench of this Court in Aneeta Hada vs. Godfather Travels and Tours Private Limited governs the area of dispute. The issue which fell for consideration was whether an authorized signatory of a company would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 without the company being arraigned as an accused. The three Judge Bench held thus:-

“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.”

In similar terms, the Court further held:

“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…. “

12. 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.

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.”

8. Reverting back to the facts of the present case, it is indisputable that the cheque was issued in the capacity of an authorized signatory of BSR Health Ventures Private Limited and the said cheque was not issued from a personal account and also the name of the company has been wrongly mentioned since 'BSR Super Specialty Hospitals Ltd' and 'BSR Health Ventures Private Ltd' are two separate entities and the existence of both the companies are different and distinct. Further, the cheque was issued in the name of BSR Health Ventures Private Ltd., however, the notice was issued and the complaint was filed against the Director of BSR Super Specialty Hospitals Ltd.

9. In view of the aforesaid discussion, since a wrong notice has been served and a wrong party has been made and further, the Company has also not been arrayed as an accused, the continuation of the criminal proceeding against the petitioner would amount to abuse of the process of law.

10. Consequently, the petition is allowed and the criminal proceedings against the petitioner is quashed.

Petition allowed.

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