Court quashes proceedings under Section 138 N.I. Act; stresses company inclusion in

The court allowed the petition seeking to quash proceedings under Section 138 of the Negotiable Instruments Act, as the accused individuals, employees of a cooperative society, could not be solely held responsible without the society being impleaded. Relying on legal precedents and the provisions of Section 141 of the N.I. Act, the court emphasized the necessity of including the company in such cases. The court granted the respondent liberty to add the cooperative society as an accused, highlighting the importance of strict compliance with the law in maintaining the prosecution under Section 141.

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Issues:
Seeking quashing of proceedings under Section 138 of Negotiable Instruments Act - Whether the cooperative society should be impleaded as an accused in the case.

Analysis:
The petitioners, accused Nos.1 and 2, filed a petition seeking to quash the proceedings in C.C. No.606/2016 related to an offence under Section 138 of the Negotiable Instruments Act. The respondent-complainant had filed a private complaint against the petitioners for dishonoring a cheque issued by a cooperative society. The petitioners contended that as employees of the society, they cannot be held solely responsible without the society being made a party to the proceedings. They relied on the Supreme Court's decision in Aneeta Hada v. Godfather Travels and Tours Private Limited, emphasizing the importance of impleading the company in such cases.

The respondent argued that the petitioners, being in charge of the society's business, were responsible for issuing the dishonored cheque and should be held guilty. They sought to amend the complaint to include the cooperative society as an accused, citing precedents like U.P. Pollution Control Board v. Modi Distillery and others. The court considered the provisions of Section 141 of the N.I. Act, which holds individuals responsible if the company commits an offence. The court referred to the strict construction of the law and the necessity of impleading the company for maintaining the prosecution under Section 141.

The court referred to the Supreme Court's decision in Himanshu v. B. Shivamurthy, which emphasized the need to arraign the company as an accused for offences under Section 138. As the petitioners were employees of the society and signed the cheque on its behalf, the absence of the society as an accused made the complaint against the petitioners not maintainable. Therefore, the court allowed the petition, quashing the proceedings against the petitioners and granting the respondent liberty to file an application to add the cooperative society as an accused. The decision on such an application was left to the trial court for consideration on its merits.

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