H.P. Sandesh, J.

1. Heard the arguments of the petitioners counsel. In spite of service of notice, the respondent did not choose to appear and contest the matter.

2. The parties are referred to as per their ranking before the trial Court for the purpose of convenience.

3. The factual aspects of this petition is that, the respondent herein is the complainant who has filed a complaint under section 200 of Cr.P.C., making the allegation that it is a corporate body and is duly represented by the authorized signatory and the complainant/respondent is engaged in manufacturing and supplying iron ore. The accused No. 1 who is the 1st petitioner herein is the managing director and the accused No. 2 who is the 2nd petitioner herein is the director of the accused company. It is further alleged in the complaint that both of them had represented and that they are dealing in trading of iron ore and would procure iron ore on behalf of the complainant and supply the same. Both the accused had demanded for payment of advance amount and accordingly the complainant paid a sum of ` 62,32,100/- by way of two transactions for a sum of ` 44,88,050/- and ` 22,44,050/- on the same day i.e., on 20.5.2011 through his banker.

4. The accused, after receipt of the said amount, instead of supplying the iron ore as agreed, went on postponing the supply of iron ore to the complainant and did not adhere to the terms of the oral contract between the complainant and the accused. The complainant suspected bona fides of the accused and persistently insisted to repay the advance amount or in the alternative to supply the iron ore and after persisting the demand, both the accused have issued a cheque for a sum of ` 53,65,517/- drawn on Karnataka Bank, K.B. Cross, dated 2.1.2012 and also promised that the said cheque would be honoured and on presentation of the said cheque, signed by these accused persons, came to be dishonoured and thereby they have committed an offence punishable under section 138 of the Negotiable Instruments Act. The complainant attempted to inform about the said dishonour of the cheque and made oral demand for repayment of entire cheque amount, but the accused went on postponing the same on one or the other pretext and ultimately the complainant got issued a legal notice on 28.5.2012 and the same was acknowledged by the accused on 30.5.2012 and in spite of service of notice, the accused failed to make payment and hence, the proceedings has been initiated against the accused persons.

5. Now the present petitioners in the petition have contended that the order passed by the learned Magistrate taking cognizance and issuing process against these petitioners is opposed to law and the same is liable to be quashed. The trial Judge ought not to have directed the issuance of process without complying section 202 and holding an enquiry under the said provision which is mandatory and committed an error in taking the cognizance and failed to take note of the fact that the company has not been made as party to the complaint and it is mandatory and without making the company as party, the complaint cannot be maintained and hence, the entire proceedings is liable to be quashed.

6. It is further contended that the learned trial Judge also failed to notice the averments made in the complaint and the cause title shown in the complaint clearly establish that the managing director and director alone made as accused without making the company as party and the complainant cannot prosecute against both of them in the absence of company and also in the complaint there is no whisper that the managing director and director alone are responsible and not the company.

7. It is further contended that learned Magistrate has failed to notice under section 141 of the Negotiable Instruments Act arraigning the company as an accused is must and then the complainant has to proceed against the other accused persons and thus the complaint is primarily liable to be dismissed on the ground that the complainant has not arraigned the company as accused and the trial Judge mechanically without due application of mind and without considering the factual aspects of the case with regard to the legal requirement to attract a criminal offence has taken cognizance and hence the very proceedings initiated against these petitioners is opposed to the mandatory requirement of the provisions of the Negotiable Instruments Act and the complainant has suppressed the material facts and in spite of the same, the trial Judge has proceeded in an erroneous way.

8. The counsel appearing for the petitioners in his oral argument also reiterated the grounds urged in the petition. In support of his contention, he has relied upon the judgment of the Apex Court decided in Criminal Appeal No. 838/2008 a case between Aneeta Hada vs. Godfather Travels and Tours Pvt. Ltd., and contended that the Apex Court in the judgment invoking section 141(1) and also 141(2) of the held that when a person which is a company commits an offence, then certain categories of persons in charge as well as the company would be deemed to be liable for the offence under section 138 of the Negotiable Instruments Act. For maintaining the prosecution under section 141 of the Negotiable Instruments Act, arraigning of a company as an accused is imperative.

9. The counsel also relied upon the judgment of this Honble Court reported in : 2013(1) KCCR 191, a case between B.N. Boolani vs. Sri Vasanth Kumar Bangera, wherein this Court held that under section 138 and 141, in an offence by company, a complaint filed against the managing director and director, the company was not arraigned as an accused and held that for maintaining the prosecution under section 141 of the Act, arraigning of a company as an accused is imperative. The Honble High Court also relied upon the judgment of the Apex Court which has been referred above.

10. After hearing the arguments of petitioners counsel and also considering the factual aspects of the case and the law laid down by the Apex Court and this Court, the point arises for consideration of this Court is whether this Court can invoke section 482 of Cr.P.C., to quash the proceedings issued against these petitioners in C.C. No. 938/2012 and also to set aside order of issuance of process dated 24.12.2012 against these petitioners in the absence of the company as party to the proceedings.

11. The main contention of these petitioners is that the Court below has committed an error in taking cognizance and directing to issue summons to the petitioners, vide order dated 24.12.2012. As such the trial Court would not have directed the issuance of process without complying with section 202 of Cr.P.C., in the absence of making the company as party to the proceedings and the very learned Magistrate has failed to notice section 141 of the Negotiable Instruments Act as to arraigning the company as an accused is must and then the complainant has to proceed against other accused persons.

12. In order to appreciate the factual aspect and relevant law, it is necessary to refer the proviso of section 141 of the Negotiable Instruments Act, which reads as hereinbelow.

"141. Offences by companies.--(1) if the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and 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 proceed against and punished accordingly."

13. The counsel appearing for the petitioners also relied upon the judgment of the Apex Court passed in Aneeta Hada vs. Godfather Travels and Tours Pvt. Ltd., (supra), the Apex Court relying upon section 138 of the Negotiable Instruments Act and also sections 141 and 142 has examined with regard to the term of person. When a person which is a company commits an offence, then certain categories of persons in charge as well as the company would be deemed to be liable for the offence under section 138 of the Negotiable Instruments Act and held that, for maintaining the prosecution under section 141 of the Negotiable Instruments Act, arraigning of a company as an accused is imperative.

14. This Court also by referring the very same judgment, in the judgment reported in : 2013(1) KCCR 191 in Sri B.L. Boolani vs. Vasanth Kumar Bangera also held that complaint filed against the managing director and director without making the company as accused is a fatal and for maintaining the prosecution under section 141 of the Act, arraigning of a company as an accused is imperative and set aside the conviction and sentence of concurrent finding.

15. Now, this Court also would like to refer the judgment of the Apex Court reported in : (2016) 6 Supreme Court Cases 62, [LQ/SC/2016/504] in the case between Standard Chartered Bank vs. State of Maharashtra and others. In this case also the Apex Court discussing in detail with regard to section 141 of the Negotiable Instruments Act held that it is necessary to specifically aver in complaint under section 141 of the Negotiable Instruments Act that at the time offence was committed, present accused was in charge of and responsible for conduct of business of the company and such averment is an essential requirement of section 141 which has to be averred in the complaint. Without such averment, requirement under section 141 of thecannot be said to be satisfied. Liability depends on role one plays in affairs of company and not on his designation or status. Further held that, there cannot be any vicarious liability unless there is prosecution against company.

16. This Court also would like to refer a recent judgment of the Apex court reported in : (2018) 13 Supreme Court Cases 663, [LQ/SC/2017/1272] in a case between N. Harihara Krishnan vs. J. Thomas. In this judgment also the Apex Court has discussed section 141, 142 and 138 and held that the liability is only statutory because of his legal status as director. Every person signing the cheque on behalf of the company on whose account cheque is drawn does not become drawer of cheque and is only an authorized signatory. The liability of appellant was only vicarious. In this judgment and Apex Court also discussed the very proviso of section 138 and also 141 of the Negotiable Instruments Act and also referred the earlier judgment of the Apex Court in Aneeta Hada (supra) in paragraph No. 21 that the Apex Court had an occasion to examine the question 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 and also discussed paragraph No. 59 of the earlier judgment of Aneeta Hada (supra) and further observed that, to arrive at the irresistible conclusion that for maintaining the prosecution under section 141 of the Act, arraigning of the company as an accused is imperative. The other categories of offenders can only brought in the dragnet and the touchstone of vicarious liability as the same has been stipulated in the provision itself. It is further observed in paragraph No. 22 that the High Court failed to appreciate that the liability of the appellant, if any, in the context of the facts of the present case is only statutory because of his legal status as the director of Dakshin. Every person signing a cheque on behalf of a company on whose account a cheque is drawn does not become the drawer of the cheque. Such a signatory is only a person duly authorized to sign the cheque on behalf of the company/drawer of the cheque. If Dakshin/drawer of the cheque is sought to be summoned for being tried for an offence under section 138 of thebeyond the period of limitation prescribed under the, the appellant cannot be told in view of the law declared by the Apex Court in Aneetha Hada (supra) that he can make no grievance of the fact on the ground that Dakshin did not make any grievance of such summoning. It is always open to Dakshin to raise the defence that the initiation of prosecution against it is barred by limitation. Dakshin need not necessarily challenge the summoning order. It can raise such a defence in the course of trial.

17. In the instant case on hand, the grievance of the petitioners is that the managing director and the director only have been made as party to the proceedings and not made the company as party to the proceedings and further it is rightly pointed out by the counsel appearing for the petitioners that nowhere in the complaint which has been filed before the trial Court narrated with regard to the company and there is no any averment in the complaint that the transactions are taken place between the company and the complainant and nothing is stated in the complaint that these petitioners are in the helm of affairs of the company and in the charge of company affairs, they have been made in their personal capacity as Managing Director and Director. On perusal of the cheque, which is produced before the Court below is also issued in the name of the company and no doubt both these petitioners have signed in the capacity as managing director and director and it is specifically mentioned on perusal of the cheque that for Clariya Steels Pvt. Ltd., the cheque has been issued and having considered the principles laid down in the judgments referred supra, the citations quoted by the counsel appearing for the petitioners and also the citations which are referred by this Court are also aptly applicable to the case on hand and the earlier judgment of Aneeta Hada (supra) is also followed by the Supreme court in the recent judgments also. In the absence of the company the complainant cannot prosecute against these two persons. No doubt they are the vicariously liable but not in the absence of the company and in all the judgments it is specifically held that maintaining of the prosecution under section 141 of thearraigning of a company as an accused is imperative. Every person singing the cheque on behalf of company on whose account cheque is drawn does not become drawer of cheque and is only an authorized signatory. The liability of the petitioner was only vicarious. The liability is only statutory because of their legal status as Director and Managing Director and hence this Court can invoke section 482 of Cr.P.C. to quash the proceedings against these petitioners.

18. In view of the discussions made above, this Court proceed to pass the following:

ORDER

The petition is allowed.

The impugned order passed in

C.C. No. 938/2012, pending on the file of II Addl. Civil Judge (Jr. Dn.) and JMFC, Ballari, with regard to issuance of process dated 24.12.2012 as against these petitioners is quashed.