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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether a complaint under section 138 read with section 141 of the Negotiable Instruments Act, 1881 is maintainable when the company, from whose account the dishonoured cheque was issued, is not arraigned as an accused.
Analysis: The complaint was founded on cheques issued from the company account, and the record showed that the company was in existence when the cheques were issued and when the complaint was filed. The law requires the company to be impleaded as an accused for prosecution under section 141 of the Negotiable Instruments Act, 1881, because the liability of directors in such cases is linked to the company's arraignment. The fact that one cheque did not bear the company seal did not change the position, since it was still drawn on the company's bank account.
Conclusion: The complaint was not maintainable against the applicants alone, and the absence of the company as an accused warranted quashing of the complaint and all consequential proceedings.
Final Conclusion: The writ application succeeded, and the criminal complaint with all subsequent proceedings was set aside.
Ratio Decidendi: For prosecution under section 141 of the Negotiable Instruments Act, 1881, arraignment of the company as an accused is mandatory where the dishonoured cheque is issued from the company's account.
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