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2022 (4) TMI 246 - HC - Indian LawsDishonor of Cheque - insufficiency of funds - framing of charges - vicarious liability - whether the complaint under Section 138 of Negotiable Instruments Act without arraigning the company as an accused would be maintainable? - HELD THAT:- Dealing with similar issue wherein only directors of company is made the accused, leaving the company, the complaint under Section 138 of Negotiable Instruments Act would not lie. In recent judgment in case of HINDUSTAN UNILEVER LIMITED VERSUS THE STATE OF MADHYA PRADESH [2020 (11) TMI 1021 - SUPREME COURT] the Court held the person who is in charge of and responsible to the company for the conduct of business would be guilty of the offence. Likewise in case of HIMANSHU VERSUS B. SHIVAMURTHY & ANR. [2019 (3) TMI 294 - SUPREME COURT], the Supreme Court held that commission of offence by the company is an express condition precedent to attract the vicarious liability of others and the word “as well as the company” makes it clear 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 that the company is a juristic person. The petitions have been filed at the stage of framing of charges. Whether it would be maintainable ? In order to arrive at an answer to the query, the complaint and the orders summoning the accused is examined. Admittedly, the company was not made an accused in the cases expect the Directors, therefore, applying the law laid down by the Supreme Court as cited supra, it appears that while summoning the accused, the Magistrate has failed to see the principles of law and in turn when the objection was made, the learned Sessions Judge also failed to take into account the principles laid down by the Supreme Court - applying the principles as has been decided in case of M/S. PEPSI FOODS LTD. & ANR VERSUS SPECIAL JUDICIAL MAGISTRATE & ORS [1997 (11) TMI 518 - SUPREME COURT] which mandates that the Magistrate has to carefully scrutinize the evidence brought on record and cannot be a silent spectator at the time of recording of preliminary evidence, the petition under Section 482 would be maintainable for the reason that both the Courts below have failed to take into account. Petition allowed.
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