Court upholds complaint against company despite notice to Managing Director only; irregularity doesn't invalidate prosecution.

The court dismissed the petition seeking to quash the summoning order under Section 138 of the Negotiable Instruments Act. The complaint filed against the company was upheld as maintainable despite the statutory notice being addressed solely to the Managing Director. The court clarified that serving notice on the Managing Director is deemed as notice to the company, meeting the statutory requirements. The irregularity in notice service did not invalidate the prosecution, and the complaint against the company was deemed valid.

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Issues Involved:
1. Quashing of the summoning order dated 06.03.2013.
2. Quashing of the complaint filed under Section 138 of the Negotiable Instruments Act (N.I. Act).
3. Whether the complaint under Section 138 N.I. Act is maintainable when statutory notice was issued only to the Managing Director and not to the company.

Detailed Analysis:

Issue 1: Quashing of the summoning order dated 06.03.2013
The petitioner sought the quashing of the summoning order dated 06.03.2013. The court examined the legal position and found no grounds to quash the proceedings initiated under Section 138 of the N.I. Act. The petition was accordingly dismissed.

Issue 2: Quashing of the complaint filed under Section 138 of the N.I. Act
The petitioner also sought the quashing of the complaint filed under Section 138 of the N.I. Act. The respondent had filed a complaint contending that two cheques amounting to Rs. 75 lakhs issued by the petitioner were dishonoured due to "insufficient funds." The court held that the complaint was maintainable and dismissed the petition.

Issue 3: Whether the complaint under Section 138 N.I. Act is maintainable when statutory notice was issued only to the Managing Director and not to the company
The petitioner argued that the statutory notice was only addressed to Mr. M.S. Narula, the Managing Director, and not to DSC Ltd., and hence the complaint was not maintainable. The court referred to the Supreme Court's judgment in Krishna Texport & Capital Markets Ltd. v. Ila A. Agrawal, which clarified that the notice under Section 138 is required to be given to "the drawer" of the cheque. The court noted that the company, being a juristic entity, functions through its directors, and service of notice on the Managing Director is sufficient service on the company.

The court further referenced N. Rangachari v. BSNL, where it was held that a company acts through its directors, and knowledge of the company is deemed to be the knowledge of the directors. Therefore, serving notice on the Managing Director implies that the company is aware of the dishonour of the cheque and the demand for payment.

The court concluded that the irregularity in serving the statutory notice on the Managing Director instead of the company was not fatal to the prosecution. The statutory requirements of Section 138 N.I. Act were sufficiently complied with, and the complaint against the company was maintainable.

Conclusion:
The court dismissed the petition, finding no grounds to quash the proceedings initiated under Section 138 of the N.I. Act. The complaint was deemed maintainable despite the statutory notice being addressed only to the Managing Director. The court emphasized that the knowledge of the Managing Director is attributed to the company, and serving notice on the Managing Director is sufficient to meet the statutory requirements.

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