Court Rules Complaint Not Maintainable Without Impleading Society as a Party
In a significant ruling, the Himachal Pradesh High Court, presided over by Justice Sandeep Sharma, quashed a criminal complaint against Sh. Parveen Rajput, an authorized signatory of a society, under Section 138 of the Negotiable Instruments Act, 1881. The court held that the complaint was not maintainable as the society, a juristic person, was not impleaded as a party to the proceedings.
The case, titled Kuldeep Singh v. Parveen Rajput, revolved around a cheque issued by Rajput, the General Secretary of "Professors Educational and Welfare Society," which was dishonored due to insufficient funds. The complainant, Sh. Kuldeep Singh, filed a complaint under Section 138 of the Negotiable Instruments Act, alleging that the cheque was issued towards the discharge of a lawful liability.
The court emphasized that the liability primarily rests with the society, which is a juristic entity. Without the society being impleaded, the complaint against the authorized signatory could not be maintained. Justice Sharma noted that the cheque was issued from the account of Delhi Convent School, run by the society, and not from the personal account of Rajput.
Relying on precedents, including the Supreme Court's judgment in Aneeta Hada v. Godfather Travels and Tours Private Limited, the court underscored that for maintaining a prosecution under Section 141 of the Act, arraigning the company or society as an accused is imperative. The court further observed that the provisions of the Negotiable Instruments Act require that the drawer of the cheque be prosecuted, which in this case was the society.
The court's decision to quash the complaint is expected to have significant implications for cases involving cheques issued by authorized signatories on behalf of juristic entities. It reinforces the principle that legal proceedings must correctly identify the entity liable for the debt or obligation.
Bottom line:-
Section 138 of the Negotiable Instruments Act, 1881 - Complaint against an authorized signatory of a society - Held, without impleading the society as a party, the complaint under Section 138 is not maintainable, as the liability primarily rests with the society, which is a juristic person.
Statutory provision(s): Section 138 of the Negotiable Instruments Act, 1881, Section 141 of the Negotiable Instruments Act, 1881, Section 482 of the Criminal Procedure Code, 1973 (now Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023)
Sh. Parveen Rajput v. Sh. Kuldeep Singh, (Himachal Pradesh) : Law Finder Doc id # 2906566
