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2022 (1) TMI 54 - HC - Indian LawsDishonor of Cheque - insufficiency of funds - vicarious liability of the accused - The complaint would not disclose as to what is the status of the Indus Hospital, whether it is a Company or a Corporation. The complaint also would not disclose as to how the accused were connected with the said hospital, whether they were Directors, Managing Directors etc. - invocation of Section 141 and 142 of the NI Act - HELD THAT:- The complaint was filed under Sections 138 and 142 of NI Act. The complaint would not disclose as to what is the status of the Indus Hospital, whether it is a Company or a Corporation. The complaint also would not disclose as to how the accused were connected with the said hospital, whether they were Directors, Managing Directors etc. The Indus Hospital was not shown as an accused. The complaint would not disclose how vicarious liability could be fastened to the petitioners herein. Considering the above judgment of the Hon’ble Apex Court, if Indus Hospital is considered as a Company, it has to be arrayed as an accused. Without arraying it as an accused, the persons cited as A1 and A3 cannot be held liable without even stating as to how they are connected to the hospital. A perusal of the cheque would disclose that it was issued by Sri M. Madhusudhan Reddy, who was shown as A2, on behalf of Indus Hospitals. This petition is filed by only Accused Nos.1 and 3, who are not signatories to the said cheques which are returned / dishonoured. As per Section 138 of the NI Act, the emphasis has been laid on the fact that the cheque has to be drawn by a person on the account maintained by him. He must have issued the cheque in discharge of any debt or other liability. As the petitioners are not the persons, who had drawn the cheque and they were not shown as the persons who were maintaining the account in the bank and that they had issued the subject cheques in discharge of their liability, continuation of the proceedings against them is considered as an abuse of process of law and as such liable to be quashed. Petition allowed.
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