# Sanjay Singh v. State of U.P. & Anr

- **Citation:** (2021) 3 ILRA 407
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-02-10
- **Case number:** Application U/S 482 Cr.P.C. No. 2162 of 2016
- **Bench:** Ravi Nath Tilhari
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sanjay-singh-v-state-of-u-p-anr-46886
- **Pages:** 13

## Headnote

Law
-
Code
of
Criminal
Procedure, 1973-Section 482 & Negotiable
Instrument
Act,
1881-Sections
138quashing of entire proceeding-admitted fact
of issuance of cheque is there, dishonour of
it
by
bank
concerned-notice
to
accused/applicant
by
complainant
by
registered post is there - cheque was issued
by the company-complaint has not been
filed against the company - the applicant
had signed the cheque as its authorized
signatory-the company had not been made
party accused-no vicarious liability can be
imposed
on
the
accused-applicantcomplaint
cannot
proceed
against the
applicant in his personal capacity-Hence,
prima facie case, is not made out against the
applicant u/s 138 r/w section 141 of the
Act-order under challenge deserves to be
quashed.(Para 2 to 46)

B. In exercising jurisdiction u/s 482 CrPC
High Court would not embark upon an
enquiry whether the allegations in the
complaint are likely to be established by
evidence or not.it has to be exercised
sparingly, carefully and with caution and
only when such exercise is justified by the
tests specifically laid down in the section
itself. (Para 42)

C. Before a Magistrate taking cognizance
of an offence u/s 138/141 of the N.I. Act,
making a person vicariously liable has to
ensure strict compliance of the statutory
requirements.to settle the scores between
the parties which are more in the nature
of a civil dispute, the parties cannot be
permitted to put the criminal law into
motion and courts cannot be a mere
spectator to it. (Para 43)

The Application is allowed. (E-5)

List of Cases cited: -

## Text

_Characters 0–39,918 of 43,631. This is a partial read: ask again with offset=39918 for what follows._

3 All. Sanjay Singh Vs. State of U.P. & Anr.
407
legal or otherwise, warranting interference
in the submission of charge-sheet. It is not
a case of grave injustice. No good ground
to quash the charge-sheet.

14. Application under Section 482
Cr.P.C. lacks merit and is accordingly
dismissed.

15. It is however, provided that if the
applicants move an application for discharge
at proper stage, same shall be heard and
decided by the court concerned preferably
and expeditiously within three months in
accordance with law, considering the material
facts
and
evidence
collected
by
the
Investigating Officer during investigation and
plea raised by accused-applicants.
----------
(2021)03ILR A407
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 10.02.2021

BEFORE

THE HON'BLE RAVI NATH TILHARI, J.

Application U/S 482 Cr.P.C. No. 2162 of 2016

Sanjay Singh ...Applicant
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicant:
Sri Aishwini Kumar, Sri Ganesh Shanker
Srivastava, Sri Ashwini Kumar Srivastava

Counsel for the Opposite Parties:
A.G.A.

A.
Criminal
Law
-
Code
of
Criminal
Procedure, 1973-Section 482 & Negotiable
Instrument
Act,
1881-Sections
138quashing of entire proceeding-admitted fact
of issuance of cheque is there, dishonour of
it
by
bank
concerned-notice
to
accused/applicant
by
complainant
by
registered post is there - cheque was issued
by the company-complaint has not been
filed against the company - the applicant
had signed the cheque as its authorized
signatory-the company had not been made
party accused-no vicarious liability can be
imposed
on
the
accused-applicantcomplaint
cannot
proceed
against the
applicant in his personal capacity-Hence,
prima facie case, is not made out against the
applicant u/s 138 r/w section 141 of the
Act-order under challenge deserves to be
quashed.(Para 2 to 46)

B. In exercising jurisdiction u/s 482 CrPC
High Court would not embark upon an
enquiry whether the allegations in the
complaint are likely to be established by
evidence or not.it has to be exercised
sparingly, carefully and with caution and
only when such exercise is justified by the
tests specifically laid down in the section
itself. (Para 42)

C. Before a Magistrate taking cognizance
of an offence u/s 138/141 of the N.I. Act,
making a person vicariously liable has to
ensure strict compliance of the statutory
requirements.to settle the scores between
the parties which are more in the nature
of a civil dispute, the parties cannot be
permitted to put the criminal law into
motion and courts cannot be a mere
spectator to it. (Para 43)

The Application is allowed. (E-5)

List of Cases cited: -

1. Aneeta Hada Vs M/s Godfather Travels &
Tours Pvt. Ltd., (2012) 5 SCC 661

2. Harihara Krishnan Vs J Thomas, (2018) 13
SCC 663

3. Harshendra Kumar D. Vs Rebatilata Koley,
(2011) 3 SCC 351

4. Anita Malhotra V.s Apparel Export Promotion
Council & anr., (2012) 1 SCC 520

5. Pooja Ravinder Devidasani Vs St. of Mah. &
anr. (2015) 88 ACC 613
408 INDIAN LAW REPORTS ALLAHABAD SERIES
6.
Ashoke
Bafna
Vs
Upper
India
Steel
Manufacturing & Engeeniring Co. Ltd. (2018) 14
SCC 202

7. Rishipal Singh Vs St. of U.P. & ors. (2014) 7
SCC 215

8. Medchl Chemicals & Pharma (P) Ltd., (2002)
3 SCC 269

(Delivered by Hon'ble Ravi Nath Tilhari, J.)

1. Heard Shri Ganesh Shankar
Srivastava, learned counsel for the applicant,
Sri Pankaj Saxena, learned A.G.A. for the
State and perused the material on record.

2. This petition under section 482 of the
Code of Criminal Procedure, 1973 (Cr.P.C.)
has been filed with prayer for quashing of the
summoning order dated 17.8.2015 passed by
the Additional Chief Judicial, Magistrate,
Court No. 10, Varanasi in Complaint Case
No. 1153 of 2015 (Manoj Kumar vs Sanjay
Singh) under Section 138 of the Negotiable
Instruments (N.I.) Act, Police Station, Sigra,
District-Varanasi. The applicant has also
challenged
the
revisional
order
dated
28.10.2015 passed by the Additional Sessions
Judge, Court No. 4, Varanasi in Criminal
Revision No. 317 of 2015 (Sanjay Singh vs
State of U.P. and others) as also the entire
proceedings of the aforesaid complaint case.

3. By order dated 15.2.2016 a notice
was
issued
to
Opposite
Party
No.2/complainant and as per the office report
dated 17.8.2016 notice issued to Opposite
Party No. 2 has been served. However, no
one has put in appearance for the Opposite
Party No. 2.

4. The facts of the case as stated by
the learned counsel for the applicant are
that the applicant is the Director of Udit
Infraheights
Pvt.
Ltd.,
a
company
incorporated under the Companies Act,
1956.
The
complainant/opposite
party
No.2, an employee in the railways, by
giving assurance of contract of road
construction from his superior officers in
favour of the applicant's company, situated
at Lahartara Railway Colony, Varanasi
obtained post dated cheque of rupees five
lacs in terms of security money. The
complainant assured the applicant that
when the applicant earns profits of the said
contract work and presents gifts to the
complainant, the complainant would return
the post dated cheque. However, it is the
case of the applicant that without any prior
notice to the company, the complainant
presented the cheque in the bank which was
dishonoured due to non availability of
funds. The legal notice dated 16. 6.2015
was not received to the applicant, but the
second notice dated 4.7.2015 was served.

5.

The
opposite
party
No.2
complainant filed complaint registered as
Complaint Case No. 1153 of 2015 (Manoj
Kumar vs. Sanjay Singh) under section 138
N.I. Act, Police Station, Sigra, DistrictVaranasi, on the averments, inter alia, that
the complainant had advanced rupees
5,50,000/- to the applicant for purchase of
land as the applicant was engaged in the
business of property dealing but the land
was not transferred. The complainant made
repeated demands for return of money and
consequently the applicant gave a cheque
of rupees 5,00,000/- dated 30.4.2015 to the
complainant, which, on presentation in
bank was dishonored. The complainant
served the applicant with legal notice
within the stipulated period but as the
amount under cheque was not paid, the
complaint was filed.

6. The Additional Chief Judicial
Magistrate, Court No.10 Varanasi, on
3 All. Sanjay Singh Vs. State of U.P. & Anr.
409
consideration of the statement of the
complainant recorded under Section 200
Cr.P.C. and the material placed before him
passed
the
summoning
order
dated
17.8.2015. This order was challenged by
the applicant in Criminal Revision No. 317
of 2015, but the same was rejected by the
order dated 2.9.2015 passed by the
Additional Sessions Judge, Court No.4,
Varanasi.

7. The learned counsel for the
applicant has submitted that the orders
under challenge suffer from illegality and
amount to abuse of the process of the court.
His submission is that the cheque in
question was issued by the company. The
applicant had signed the cheque in the
capacity of the authorised signatory of the
company. He had not issued the cheque nor
signed in his personal capacity, but, the
company was not made party accused in
the complaint. The applicant, Director of
the company, could not be held liable for
the alleged offence as there was no
prosecution of the company. Consequently,
no prosecution of the applicant could be
launched and summons could not be issued
to him to face the trial. Learned counsel for
the applicant has placed Sections 138 and
141 of the N.I. Act and relied upon the
judgement of the Hon'ble Supreme Court in
the case of Aneeta Hada Vs. M/s
Godfather Travels and Tours Pvt. Ltd.,
reported in (2012) 5 SCC 661, in support
of his contention that there could be only
vicarious liability of the person who, at the
time the offence was committed, was
incharge of the business of the company
but even such person can not be held liable
if the company is not arrayed as an
accused.

8. Learned counsel for the applicant
has further submitted that the cheque,
undisputedly
the
very
basis
of
the
complaint, evidenced that it was issued in
the capacity of authorized signatory for the
company. Any legal notice was not served
to the company. There was non compliance
with the provisions of Sections 138 and 141
of N.I. Act and no offence was made out
even, prima facie, against the applicant.

9. Learned A.G.A., Shri Pankaj
Saxena has submitted that there is no
illegality in the summoning order as the
Magistrate was satisfied, on consideration
of the material before him, that prima facie,
offence under Section 138 N.I. Act was
made out, for summoning of the applicant
to face the trial.

10. Learned A.G.A. has further
submitted that the Revisional Court has
specifically recorded that as per the
complaint case, the cheque was given to the
complainant by the applicant in his
personal capacity and not in the capacity of
authorised signatory for the company.
Consequently, the company was not a
necessary party to be arrayed as accused.
His submission is that Section 141 of N.I.
Act is not attracted and the challenge to the
impugned orders deserves rejection.

11. I have considered the submissions
advanced by the learned counsel for the
parties and have perused the material
brought on record.

12. In the light of the submissions
advanced the following points arise for
consideration:

(i)
Whether
the
Criminal
prosecution against the person in charge of,
and responsible for conduct of the business
of the company under Section 138
Negotiable
Instruments
Act,
can
be
410 INDIAN LAW REPORTS ALLAHABAD SERIES
maintained,
in
the
absence
of
any
prosecution of the Company for such
offence and without making the company
an accused, in view of Section 141 of the
Negotiable Instruments Act?

(ii)
Whether
the
cheque
in
question was issued by the applicant in his
personal capacity or in the capacity of
director of Udit Infraheights Pvt. Ltd.
Company?

(iii) Whether the orders under
challenge and the criminal proceedings
against the applicant deserve to be quashed
in the exercise of jurisdiction under Section
482 Cr.P.C.?

13. I proceed to Consider point No.1
and for such consideration it is necessary to
have a look at the provisions of Section 138
and 141 of the Negotiable Instruments Act.

14.

Section
138
Negotiable
Instruments Act, 1881

"Dishonour
of
cheque
for
insufficiency, etc., of funds in the account. -
-Where any cheque drawn by a person on
an account maintained by him with a
banker for payment of any amount of
money to another person from out of that
account for the discharge, in whole or in
part, of any debt or other liability, is
returned by the bank unpaid, either
because of the amount of money standing to
the credit of that account is insufficient to
honour the cheque or that it exceeds the
amount arranged to be paid from that
account by an agreement made with that
bank, such person shall be deemed to have
committed an offence and shall, without
prejudice to any other provisions of this
Act, be punished with imprisonment for 19
[a term which may be extended to two
years], or with fine which may extend to
twice the amount of the cheque, or with
both:

Provided that nothing contained
in this section shall apply unless--

(a) the cheque has been presented
to the bank within a period of six months
from the date on which it is drawn or
within the period of its validity, whichever
is earlier;

(b) the payee or the holder in due
course of the cheque, as the case may be,
makes a demand for the payment of the
said amount of money by giving a notice in
writing, to the drawer of the cheque,
[within thirty days] of the receipt of
information
by
him
from
the
bank
regarding the return of the cheque as
unpaid; and

(c) the drawer of such cheque
fails to make the payment of the said
amount of money to the payee or, as the
case may be, to the holder in due course of
the cheque, within fifteen days of the
receipt of the said notice."

15.

Section
141
Negotiable
Instruments Act reads as under:

"Offences by companies. -

(1) If the person committing an
offence under section 138 is a company,
every person who, at the time the offence
was committed, was in charge of, and was
responsible to the company for the conduct
of the business of the company, as well as
the company, shall be deemed to be guilty
of the offence and shall be liable to be
proceeded
against
and
punished
accordingly:

Provided that nothing contained
in this sub-section shall render any person
liable to punishment if he proves that the
offence
was
committed
without
his
knowledge, or that he had exercised all due
3 All. Sanjay Singh Vs. State of U.P. & Anr.
411
diligence to prevent the commission of
such offence:

Provided further that where a
person is nominated as a Director of a
company by virtue of his holding any office
or employment in the Central Government
or State Government or a financial
corporation owned or controlled by the
Central
Government
or
the
State
Government, as the case may be, he shall
not be liable for prosecution under this
Chapter.

(2)
Notwithstanding
anything
contained in sub-section (1), where any
offence under this Act has been committed
by a company and it is proved that the
offence has been committed with the
consent or connivance of, or is attributable
to, any neglect on the part of, any director,
manager, secretary or other officer of the
company, such director, manager, secretary
or other officer shall also be deemed to be
guilty of that offence and shall be liable to
be
proceeded
against
and
punished
accordingly.

Explanation.-- For the purposes
of this section,--

(a) "company" means any body
corporate and includes a firm or other
association of individuals; and

(b) "director", in relation to a
firm, means a partner in the firm.]"

16. The essential ingredients of offence
under Section 138 of the N.I. Act are : (i)The
person drew a cheque on an account
maintained by him with the banker; (ii) when
such a cheque is presented to the bank is
returned by the bank unpaid; (iii) such cheque
was presented to the bank within a period of
six months from the date it was drawn or
within the period of its validity, which ever is
earlier; (iv) the payee demanded in writing
from the drawer of the cheque the payment of
the amount of money due under the cheque to
the payee; (v) Such a notice of payment is
made within a period of 30 days from the
date of the receipt of the information by the
payee from the bank regarding return of the
cheque, as unpaid and (vi) inspite of the
demand notice the drawer of the cheque
failed to make the payment within a period of
15 days from the date of receipt of the
demand notice.

17. In order to constitute the offence
under Section 138 N.I. Act all the aforesaid
ingredients (i) to (vi) must co-exist. Each one
of the ingredients (i) to (v) flows from the
document, which evidences the existence of
such an ingredient. The only other ingredient
no. (vi) the complainant can only assert but
cannot prove. The burden is essentially on the
drawer of the cheque to prove that he had
infact made the payment pursuant to the
demand.

18. In the case of Aneeta Hada (supra)
the Hon'ble Supreme Court has held that
Section 141 of the N.I. Act is concerned with
the offences by the company. It makes the
other
persons,
vicariously
liable
for
commission of an offence on the part of the
company.
The
vicarious
liability
gets
attracted when the condition precedent laid
down in Section 141 of the Act stands
satisfied. There can be no vicarious liability
unless there is a prosecution against the
company. For maintaining a prosecution
under section 141 of the N.I. Act, arraying of
the company as an accused is imperative. The
other categories of offenders can only be
brought in the dragnet on touchstone of
vicarious liability as the same has been
stipulated in the provision of Section 141 N.I.
Act itself. Paragraph Nos. 53 and 59 of
Aneeta Hada (supra) read as under:

"53. It is to be borne in mind that
Section 141 of the Act is concerned with the
412 INDIAN LAW REPORTS ALLAHABAD SERIES
offences by the company. It makes the other
persons vicariously liable for commission
of an offence on the part of the company.
As has been stated by us earlier, the
vicarious liability gets attracted when the
condition precedent laid down in Section
141 of the Act stands satisfied. There can
be no dispute that as the liability is penal in
nature, a strict construction of the
provision would be necessitous and, in a
way, the warrant.

59. In view of our aforesaid
analysis, we arrive at the irresistible
conclusion
that
for
maintaining
the
prosecution under Section 141 of the Act,
arraigning of a company as an accused is
imperative.
The
other
categories
of
offenders can only be brought in the
dragnet on the touchstone of vicarious
liability as the same has been stipulated in
the provision itself. We say so on the basis
of the ratio laid down in C.V. Parekh
(supra) which is a three-Judge Bench
decision. Thus, the view expressed in
Sheoratan Agarwal (supra) does not
correctly
lay
down
the
law
and,
accordingly, is hereby overruled. The
decision in Anil Hada (supra) is overruled
with the qualifier as stated in para 44. The
decision in Modi Distilleries has to be
treated to be restricted to its own facts as
has been explained by us hereinabove."

19. In Standard Chartered Bank Vs.
State of Maharashtra and others (2016) 6
SCC 62, also, it has been held that there
cannot be any vicarious liability unless
there is a prosecution against the Company.
Paras 9,11 and 12 of the report read as
under:

9. On a studied scrutiny of the
aforesaid provision, it is quite limpid that
to constitute the criminal liability the
complainant is required to show that a
cheque was issued; that it was presented in
the bank in question; that on due
presentation, it was dishonoured; that, as
enshrined in the provision, requisite notice
was served on the person who was sought
to be made liable for criminal liability; and
that in spite of service of notice, the person
who has been arraigned as an accused did
not comply with the notice by making
payment or fulfilling other obligations
within the prescribed period, that is, 15
days from the date of receipt of notice.

11. On a perusal of the aforesaid
provision, it is clear as crystal that if the
person who commits an offence under
Section 138 of the Act is a company, the
company as well as other person in charge
of or responsible to the company for the
conduct of the business of the company at
the time of commission of the offence is
deemed to be guilty of the offence. Thus, it
creates a constructive liability on the
persons responsible for the conduct of the
business of the company.

12. At one point of time, an issue
had arisen before this Court, whether a
complaint could be held to be maintainable
without making the company a party. The
said controversy has been put to rest by a
three-Judge Bench decision in Aneeta
Hada v. Godfather Travels and Tours
Private Limited wherein it has been held
that: (SCC p. 688, para 58)

"58......... when the company can
be prosecuted, then only the persons
mentioned in the other categories could be
vicariously liable for the offence subject to
the averments in the petition and proof
thereof."

20. In N. Harihara Krishnan Vs. J
Thomas (2018) 13 SCC 663 the Hon'ble
Supreme Court held that Section 141
stipulates the liability for the offence
punishable under Section 138 N.I. Act
3 All. Sanjay Singh Vs. State of U.P. & Anr.
413
when the person committing such an
offence happens to be a company. In other
words when a drawer of the cheque
happens to be a company. Relevant part of
paragraphs 20, 21 and 22 of the report read
as under:

"20. The offence under Section
138 of the Act is capable of being
committed only by the drawer of the
cheque. The logic of the High Court that
since
the
offence
is
already
taken
cognizance of, there is no need to take
cognizance of the offence against Dakshin
is flawed. Section 141 stipulates the
liability for the offence punishable under
Section 138 of the Act when the person
committing such an offence happens to be a
company - in other words when the drawer
of the cheque happens to be a company.
Relevant portion of Section 141 reads as
follows:-

"141. Offences by companies.--
(1) If the person committing an offence
under Section 138 is a company, every
person who, at the time the offence was
committed, was in charge of, and was
responsible to the company for the conduct
of the business of the company, as well as
the company, shall be deemed to be guilty
of the offence and shall be liable to be
proceeded
against
and
punished
accordingly:"

21.
This
Court
in
Aneeta
Hada,(SCC p. 668, para 1), had an
occasion to examine the question "whether
an authorised signatory of a company
would be liable for prosecution under
Section 138 of the Negotiable Instruments
Act, 1881 (for brevity "the Act") without the
company being arraigned as an accused"
and held as follows:-

"59. In view of our aforesaid
analysis, we arrive at the irresistible
conclusion
that
for
maintaining
the
prosecution under Section 141 of the Act,
arraigning of a company as an accused is
imperative.
The
other
categories
of
offenders can only be brought in the dragnet on the touchstone of vicarious liability
as the same has been stipulated in the
provision itself. ..."

22. The High Court failed to
appreciate that the liability of the appellant
(if any in the context of the facts of the
present case) is only statutory because of
his legal status as the Director of Dakshin.
Every person signing a cheque on behalf of
a company on whose account a cheque is
drawn does not become the drawer of the
cheque. Such a signatory is only a person
duly authorised to sign the cheque on
behalf of the company/drawer of the
cheque."

21. It has thus been settled in Aneeta
Hada (supra) that for maintaining a
prosecution against the person in charge of
and responsible for conduct of the business
of the company under Section 138 N.I. Act,
arraigning of the Company as an accused is
imperative in view of Section 141 of the
Act, as such a person can only be held
vicariously liable. Consequently, on point
No.1 it is so determined. Such a person,
cannot be prosecuted unless there is
prosecution of the company.

22. Now I proceed to consider the
second point, i.e. whether the cheque in
question was issued by the applicant in his
personal capacity or in the capacity of the
Director of the Company.

23. There is no averment in the
complaint that the cheque was issued by the
company or/and the applicant-accused
signed the cheque in the capacity of the
Director or the person in charge of the
affairs of the Company. The complaint has
414 INDIAN LAW REPORTS ALLAHABAD SERIES
been filed without any refefence to the
company, which has also not been made a
party-accused in the Complaint.

24. In paragraph 4 of the complaint,
there is an averment that the applicantaccused gave an account payee cheque No.
613677 dated 30.4.2015 drawn on ICICI
Bank, Branch Sigra, for Rs. 5,00,000/- to
the complainant-opposite party No.2.

25. This Court by order dated
27.1.2016 granted time to learned counsel
for the applicant to enable him to file a
photocopy of the cheque in question and in
the light of that order the applicant filed
supplementary affidavit dated 14/15.2.2016
annexing therewith copy of the cheque, as
annexure No.1.

26. By order dated 15.2.2016 the
supplementary affidavit was taken on
record
and
the
proceedings
of
the
complaint case were stayed.

27. In the summoning order the
Magistrate has observed that the photocopy
of the cheque and other documentary
evidence was filed in support of the
complaint and the original of those
documents was produced before him for
perusal. The particulars of the cheque have
been mentioned as an account payee
cheque bearing No. 613677 dated 3.4.2015
drawn on ICICI Bank Branch Sigra for an
amount of rupees 5 lakhs.

28. Perusal of the copy of the cheque,
annexure No. 1 to the supplementary
affidavit, shows that it bears the same
particulars as are mentioned in the
complaint and in the summoning order.

29. There is, as such, no doubt or
dispute that the very cheque annexure No.1
to the supplementary affidavit, is the basis
of the prosecution against the applicant
under Section 138 N.I. Act.

30. The issuance of cheque, whether
in the personal capacity or in the capacity
of authorized signatory of the Company,
can be determined from perusal of the
cheque itself. It is one of the essential
ingredients to constitute on offence under
Section 138 N.I. Act, that the person drew a
cheque on an account maintained with the
Banker and the existence of this ingredient
is to be proved from the document itself i.e.
the cheque, and for its proof no other
evidence is required. Therefore, in the
exercise of jurisdiction under Section 482
Cr.P.C. this Court can determine if the
cheque was issued as authorized signatory
or in personal capacity by the applicant, as
such a determination does not involve
making of any comparative assessment of
the evidence/material on record before the
Magistrate or the merit or demerit of such
material. This would also not involve
taking of a view different from the view
taken by the Courts below on assessment of
the evidence. This is also not considering
the defence of the accused applicant but is
an exercise to see if one of the basic
ingredients to constitute an offence under
Section 138 N.I. Act is or is not made out,
prima facie, on the basis of the material on
record, the very document i.e. cheque,
which is the basis of the complaint and is
undisputed.

31. In Harshendra Kumar D. Vs.
Rebatilata Koley (2011) 3 SCC 351 the
Hon'ble Supreme Court has laid down that
while exercising jurisdiction under Section
482 Cr.P.C. or criminal jurisdiction under
Section 397 Cr.P.C. in a case where
complaint is sought to be quashed, in an
appropraite case, if on the face of the
3 All. Sanjay Singh Vs. State of U.P. & Anr.
415
document which are beyond suspicion or
doubt placed by the accused, the accusation
against accused cannot stand, it would be
travesty of justice if the accused is
relegated to trial and is asked to prove his
defence before the trial court. In such a
matter, for promotion of justice or to
prevent injustice or abuse of a process, the
High Court may look into the materials
which have a significant bearing on the
matter at a prima facie stage. In Anita
Malhotra Vs. Apparel Export Promotion
Council and another (2012) 1 SCC 520,
the same principle has been reiterated.
Paragraphs 19 and 20 of the Anita Malhotra
(supra) read as under:

"19. In Harshendra Kumar D. v.
Rebatilata Koley, while considering the
very same provisions coupled with the
power of the High Court under Section 482
of the Code of Criminal Procedure, 1973
(in short "the Code") for quashing of the
criminal proceedings, this Court held:
(SCC pp.361-62, para 25)

"25. In our judgment, the above
observations cannot be read to mean that
in a criminal case where trial is yet to take
place and the matter is at the stage of
issuance of summons or taking cognizance,
materials relied upon by the accused which
are in the nature of public documents or
the materials which are beyond suspicion
or doubt, in no circumstance, can be looked
into by the High Court in exercise of its
jurisdiction under Section 482 or for that
matter in exercise of revisional jurisdiction
under Section 397 of the Code. It is fairly
settled now that while exercising inherent
jurisdiction under Section 482 or revisional
jurisdiction under Section 397 of the Code
in a case where complaint is sought to be
quashed, it is not proper for the High Court
to consider the defence of the accused or
embark upon an enquiry in respect of
merits of the accusations. However, in an
appropriate case, if on the face of the
documents - which are beyond suspicion or
doubt - placed by accused, the accusations
against him cannot stand, it would be
travesty of justice if accused is relegated to
trial and he is asked to prove his defence
before the trial court. In such a matter, for
promotion of justice or to prevent injustice
or abuse of process, the High Court may
look into the materials which have
significant bearing on the matter at prima
facie stage.

20. As rightly stated so, though it
is not proper for the High Court to
consider the defence of the accused or
conduct a roving enquiry in respect of
merit of the accusation, but if on the face of
the document which is beyond suspicion or
doubt placed by the accused and if it is
considered the accusation against her
cannot stand, in such a matter, in order to
prevent injustice or abuse of process, it is
incumbent on the High Court to look into
those document/documents which have a
bearing on the matter even at the initial
stage and grant relief to the person
concerned by exercising jurisdiction under
Section 482 of the Code."

32. In view of the law laid down in
the above judgment if a document which is
beyond suspicion or doubt, even if filed by
the accused, can be looked into, the
document filed by the complainant forming
the basis of the complaint which is beyond
doubt can also be looked into for the
purpose of ascertaining if prima facie
offence is made out for summoning the
accused.

33. A perusal of the copy of the
cheque shows that it is signed by Sanjay
Singh, the applicant, for Udit Infraheights
Private Limited, as its authorised signatory.
416 INDIAN LAW REPORTS ALLAHABAD SERIES

34. The Magistrate, in passing the
summoning order did not consider this
aspect of the matter, if the averments of the
complaint, even if taken to be true on their
face value, were established, prima facie,
from
the
documentary
evidence,
in
particular, copy of the cheque filed in
evidence as also from perusal of the
original cheque which was produced before
the Magistrate. In other words, the
Magistrate had to satisfy himself, prima
facie, if the cheque was issued by the
applicant in his personal capacity which
was
the
Complaint
Case
and
this
satisfaction could be easily arrived at on the
basis of the cheque document itself. From
perusal of the cheque document it was
evident that it was issued by the applicant
not in his personal capacity and as such the
learned
Magistrate
ought
to
have
considered that the complaint case was not
supported by the documentary evidence.

35. The cheque, on its face evidencing
to have been isued by the Company and the
applicant having signed it in the capacity of
authorized signatory, the Magistrate ought
to have considered the basic question,
going to the root of the maintainability of
the complaint against the applicant, for
want of the company being arrayed as
accused, in view of Section 141 N.I. Act. In
the absence of the company, as accused,
any offence was not made out, even prima
facie,
against
the
applicant
for
his
summoning under Section 138 read with
Section 141 of the N.I. Act.

36. Perusal of the order passed in
Revision shows that the applicant raised this
plea in revision that the cheque in question
was issued as Director of the Company but
the company was not made a party-accused
and as such no offence was made out against
the applicant. Reliance was also placed on the
judgment in the case of Aneeta Hada
(supra) before the revisional Court.

37. The Revisional Court dealt with the
above isue only in a cursory manner, by
observing that as the averment in the
complaint was, giving money to the applicant
in personal capacity and giving of cheque to
the complainant by the applicant in personal
capacity the company was not the necessary
accused-party.
On
this
reasoning,
the
judgment in Aneeta Hada (supra) was also
distinguished. The revisional court failed to
look at the cheque which on the face of it was
signed by the applicant as authorized
signatory for the named company.

38. In Pooja Ravinder Devidasani Vs.
State of Maharashtra and another 2015
(88) ACC 613 the Hon'ble Supreme Court
has held that putting criminal law into motion
is not a matter of course. A Magistrate taking
cognizance of an offence under Section
138/141 of the N.I. Act, making a person
vicariously liable has to ensure strict
compliance of the statutory requirements.

39. In Ashoke Bafna Vs. Upper India
Steel Manufacturing and Engineering
Company Limited (2018) 14 SCC 202 the
Hon'ble Supreme Court held that before
summoning an accused under Section 138
N.I. Act, the Magistrate is expected to
examine the nature of the allegations made in
the complaint and the evidence, both oral and
documentary, in support thereof, and then to
proceed further with proper application of
mind to the legal principles on the issue.

40. On the second point I hold that the
cheque was issued by the applicant as
authorized signatory for the company.

41. Now coming to the last point if
the criminal proceedings and the orders
3 All. Sanjay Singh Vs. State of U.P. & Anr.
417
under challenge deserve to be quashed in
the exercise of jurisdiction under section
482 Cr.P.C.

42. In Rishipal Singh Vs. State of
Uttar pradesh and others (2014) 7 SCC
215 the Hon'ble Supreme Court, while
considering the scope of Section 482
Cr.P.C. held that when a prosecution at the
initial stage is asked to be quashed, the test
to be applied is as to whether the
uncontroverted allegations as made in the
complaint prima facie establish the case.
The Courts have to see whether the
contravention of the complaint amounts to
abuse of process of law and whether
contravention of criminal proceedings
results in miscarriage of justice or when the
court comes to a conclusion that quashing
the proceedings would otherwise secure the
ends of justice, then the Court can exercise
the power under Section 482 Cr.P.C. The
judgment in the case of Medchl Chemicals
and Pharma (P) Ltd. (2002) 3 SCC 269
was referred, in which the Hon'ble Apex
Court held that in the event, the Court on
perusal of the Complaint comes to a
conclusion that the allegations levelled in
the Complaint or charge sheet on the face
of it does not constitute or disclose any
offence as alleged there ought not to be any
hesitation to rise up to the expectation of
the people and deal with the situation as is
required under law. Paragraphs 10 to 13
and 17 of Rishipal Singh (Supra) read as
under:

"10. Before we deal with the
respective contentions advanced on either
side, we deem it appropriate to have
thorough look at Section 482 Cr.P.C.,
which reads:

"482, Saving of inherent powers
of High Court- Nothing in this Code shall
be deemed to limit or affect the inherent
powers of the High Court to make such
orders as may be necessary to give effect to
any orders under this Code, or to prevent
abuse of process of any court or otherwise
to secure the ends of justice".

A bare perusal of Section 482
Cr.P.C. makes it crystal clear that the
object of exercise of power under this
section is to prevent abuse of process of
Court and to secure ends of justice. There
are no hard-and-fast rules that can be laid
down for the exercise of the extraordinary
jurisdiction, but exercising the same is an
exception, but not a rule of law. It is no
doubt true that there can be no straight
jacket formula nor defined parameters to
enable a court to invoke or exercise its
inherent powers. It will always depend
upon the facts and circumstances of each
case. The Courts have to be very
circumspect while exercising jurisdiction
under Section 482 Cr.P.C.

11.
This
Court
in
Medchl
Chemicals & Pharma (P) Ltd. v Biological
E. Ltd has discussed at length about the
scope and ambit while exercising power
under Section 482 Cr.P.C. and how
cautious and careful the approach of the
Courts should be. We deem it apt to extract
the relevant portion from that judgement,
which reads:

"2. Exercise of jurisdiction under
inherent power as envisaged in Section 482
of the Code to have the complaint or the
charge-sheet quashed is an exception
rather than rule and the case for quashing
at the initial stage must have to be treated
as rarest of rare so as not to scuttle the
prosecution. With the lodgement of first
information report the ball is set to roll and
thenceforth the law takes its own course
and the investigation ensues in accordance
with the provisions of law. The jurisdiction
as such is rather limited and restricted and
its undue expansion is neither practicable
418 INDIAN LAW REPORTS ALLAHABAD SERIES
nor warranted. In the event, however, the
court on a perusal of the complaint comes
to a conclusion that the allegations levelled
in the complaint or charge-sheet on the fact
of it does not constitute or disclose any
offence as alleged, there ought not to be
any hesitation to rise up to the expectation
of the people and deal with the situations
as is required under the law. Frustrated
litigants ought not to be indulged to give
vent to their vindictiveness through a legal
process and such an investigation ought
not to be allowed to be continued since the
same is opposed to the concept of justice,
which is paramount".

12. This Court in plethora of
judgments has laid down the guidelines
with regard to exercise of jurisdiction by
the Courts under Section 482 Cr.P.C. In
State of Haryana v. Bhajan Lal this Court
has listed the categories of cases when the
power under Section 482 can be exercised
by the Court. These principles or the
guidelines were reiterated by this Court in
(1) CBI v. Duncans Agro Industries Ltd (2)
Rajesh Bajaj v. State (NCT of Delhi) and
(3) Zandu Pharmaceuticals Works Ltd. v
Mohd. Sharaful Haque. This Court in
Zandu Pharmaceuticals Ltd. observed that:

"The power under Section 482 of
the Code should be used sparingly and with
circumspection to prevent abuse of process
of Court, but not to stifle legitimate
prosecution. There can be no two opinions
on this, but if it appears to the trained
judicial mind that continuation of a
prosecution would lead to abuse of process
of Court, the power under Section 482 of
the
Code
must
be
exercised
and
proceedings must be quashed".

13. What emerges from the above
judgments is that when a prosecution at the
initial stage is asked to be quashed, the test
to be applied by the Court is as to whether
the uncontroverted allegations as made in
the complaint prima facie establish the
case. The courts have to see whether the
continuation of the complaint amounts to
abuse of process of law and whether
continuation of the criminal proceeding
results in miscarriage of justice or when
the court comes to a conclusion that
quashing
these
proceedings
would
otherwise serve the ends of justice, then the
Court can exercise the power under Section
482 Cr.P.C. While exercising the power
under the provision, the Courts have to
only look at the uncontroverted allegation
in the complaint whether prima facie
discloses an offence or not, but it should
not convert itself to that of a trial Court
and dwell into the disputed questions of
fact.

17. It is no doubt true that the
Courts have to be very careful while
exercising the power under Section 482
Cr.P.C. At the same time we should not
allow a litigant to file vexatious complaints
to otherwise settle their scores by setting
the criminal law into motion, which is a
pure abuse of process of law and it has to
be interdicted at the threshold. A clear
reading of the complaint does not make out
any offence against the appellant Branch
Manager, much less the offences alleged
under Section 34, 379, 411, 417, 418, 420,
467, 458 and 477 I.P.C.