Court upholds legality of order, dismisses petitions, finds vicarious liability, confirms territorial jurisdiction, applies Section 138

The court dismissed the petitions, upholding the legality of the impugned order dated 18.01.2019, finding the petitioners vicariously liable, confirming territorial jurisdiction of the CJM, Tinsukia, and applying Section 138 of the Negotiable Instrument Act, 1881 to the dishonored cheques. The court emphasized the business nature of the cheques and directed parties to bear their own costs, vacating any previous stay.

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Issues Involved:
1. Legality of the impugned order dated 18.01.2019.
2. Vicarious liability of the petitioners.
3. Territorial jurisdiction and compliance with Section 202 of the Cr.P.C.
4. Applicability of Section 138 of the Negotiable Instrument Act, 1881.
5. Nature of the cheques as security/advance and their enforceability.

Detailed Analysis:

1. Legality of the Impugned Order:
The petitioners argued that the impugned order dated 18.01.2019, which took cognizance of the offence under Section 138 of the Negotiable Instrument Act, 1881, and issued summons, is "bad in law and abuse of the process of law." They contended that the order was passed without proper consideration of the facts and circumstances, including the existence of an injunction order dated 03.01.2019, which restrained the respondents from utilizing the cheques.

2. Vicarious Liability of the Petitioners:
The petitioners claimed that they were not in charge of or responsible for the company's day-to-day affairs and thus could not be held vicariously liable under Section 141 of the Negotiable Instrument Act, 1881. They cited several judgments, including National Small Industries Corporation Limited Vs. Harmid Singh Pental and N.K. Wahi Vs. Shekhar Singh, to support their argument that mere designation as a director does not automatically imply liability.

However, the court found that specific averments in the complaint indicated that the petitioners were actively involved in the business transactions and were responsible for the conduct of the company's business. Therefore, the court held that the petitioners could be held vicariously liable.

3. Territorial Jurisdiction and Compliance with Section 202 of the Cr.P.C.:
The petitioners argued that the learned Chief Judicial Magistrate (CJM), Tinsukia, lacked territorial jurisdiction and did not comply with the procedural requirements under Section 202 of the Cr.P.C. The court noted that the cheques were presented and dishonored within the jurisdiction of the CJM, Tinsukia, and thus the court had the jurisdiction to take cognizance of the offence.

4. Applicability of Section 138 of the Negotiable Instrument Act, 1881:
The petitioners contended that the ingredients of Section 138 were not met as the cheques were issued as security/advance and not for the discharge of any legally enforceable debt. The court, however, found that the cheques were issued in connection with a business transaction and were dishonored due to insufficient funds. The court held that the factual foundation for the offence was laid down in the complaint, and thus the applicability of Section 138 was justified.

5. Nature of the Cheques as Security/Advance:
The petitioners argued that the cheques were issued as security/advance and not for any legally enforceable debt, thus not attracting the provisions of Section 138. The court, however, noted that the cheques were part of a business transaction and were issued with the understanding that they would be honored. The court referred to the case of M. Krishnan Vs. Vijay Singh, which held that the mere pendency of a civil suit does not bar the initiation of criminal proceedings under Section 138.

Conclusion:
The court dismissed the petitions, finding no merit in the arguments presented by the petitioners. The court held that the impugned order dated 18.01.2019 was legally valid, the petitioners could be held vicariously liable, the CJM, Tinsukia had territorial jurisdiction, and the cheques in question attracted the provisions of Section 138 of the Negotiable Instrument Act, 1881. The court also vacated any stay granted earlier and directed the parties to bear their own costs.

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