- 1 - NC: 2025:KHC:11734 CRL.P No. 347 of 2020 C/w CRL.P.NO.875/2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE MOHAMMAD NAWAZ CRIMINAL PETITION NO. 347 OF 2020 482(Cr.PC) / 528(BNSS) C/W CRIMINAL PETITION NO. 875 OF 2020 (482(Cr.PC) / 528(BNSS)) IN CRL.P.NO.347/2020: BETWEEN: KAVITHA D. SHETTY W/O T.DILIPKUMAR SHETTY, AGED ABOUT 44 YEARS, M/S. YAJNACHITS PRIVATE LTD NO.2891, 2ND FLOOR, KALIDASA ROAD, V.V.MOHALLA,MYSORE-570 002, KARNATAKA. …PETITIONER (BY SRI. T. MOHANDAS SHETTY, ADVOCATE) AND: 1. SRIKANTH C., NO.724, 1STFLOOR, S. V. M. COMPLEX, RAMANUJA ROAD, FORT MOHALLA, MYSORE-570 002 KARNATAKA. 2. T.DILIPKUMAR SHETTY, S/O HIRIYANNA SHETTY, R/AT YAJNACHITS PRIVATE LTD, NO.2891, 2ND FLOOR, KALIDASA ROAD, V.V.MOHALLA, MYSORE-570 002, KARNATAKA. …RESPONDENTS Digitally signed by LAKSHMI T Location: High Court of Karnataka - 2 - NC: 2025:KHC:11734 CRL.P No. 347 of 2020 C/w CRL.P.NO.875/2020 (R-1 AND R-2 ARE SERVED) THIS CRL.P FILED U/S 482 OF CR.P.C., PRAYING TO QUASH THE PROCEEDINGS INITIATED AGAINST THE PETITIONER HEREIN IN C.C.NO.5557/2019 ON THE FILE OF I ADDITIONAL I CIVIL JUDGE AND J.M.F.C., MYSURU. IN CRL. P.NO. 875 OF 2020 : BETWEEN: T. DILIPKUMAR SHETTY, S/O. HIRIYANNA SHETTY, AGED ABOUT 51 YEARS, R/AT. YAJNACHITS PRIVATE LTD. NO.2891, 2ND FLOOR, KALIDASA ROAD, V.V.MOHALLA, MYSORE-570 002. KARNATAKA. …PETITIONER (BY SRI. T. MOHANDAS SHETTY, ADVOCATE) AND: 1. SRIKANTH C., NO.274, 1ST FLOOR, S V M COMPLEX, RAMANJUNA ROAD, FORT MOHALLA, MYSORE - 570002, KARNATAKA. 2. KAVITHA D SHETTY, W/O. T DILIPKUMAR SHETTY, AGED ABOUT 44 YEARS, R/AT YAJNACHITS PRIVATE LTD. NO.2891, 2ND FLOOR, KALIDASA ROAD, V.V.MOHALLA, MYSORE-570 002. KARNATAKA. …RESPONDENTS (R1 AND R2 ARE SERVED) THIS CRL.P FILED U/S 482 CR.PC PRAYING TO QUASH THE PROCEEDINGS INITIATED BY THE 1ST RESPONDENT AGAINST THE PETITIONER HEREIN C.C.NO.5557/2019 ON THE FILE OF THE 1st ADDITIONAL CIVIL JUDGE AND JMFC AT MYSURU. - 3 - NC: 2025:KHC:11734 CRL.P No. 347 of 2020 C/w CRL.P.NO.875/2020 THESE PETITIONS, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE MOHAMMAD NAWAZ ORAL ORDER These two petitions arise out of CC No.5557/2019 pending on the file of the Court of I Additional Civil Judge and JMFC, Mysore. Hence, taken up together for disposal. 2. Heard the learned counsel for petitioners. Complainant/respondent No.1 is served but unrepresented. 3. Complaint is filed alleging an offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short ‘NI Act’). It is stated in the complaint that accused No.1 is the Managing Director and accused No.2 is the Office Bearer of one ‘Yagna Chits Pvt. Ltd.’, No.2891, 2nd floor, Kalidasa Road, V.V.Mohalla, Mysore. During the course of said chit fund business, the complainant was the successful bidder of the chit, in respect of which, accused No.1 issued a cheque for Rs.15,85,400/-. The said cheque, when presented to the Bank, got dishonoured with an endorsement “Funds Insufficient” and - 4 - NC: 2025:KHC:11734 CRL.P No. 347 of 2020 C/w CRL.P.NO.875/2020 as the accused failed to make payment inspite of issuance of a legal notice, complaint was filed. 4. The contention raised by the learned counsel appearing for petitioners is that the complaint which is filed without making the company as a party is not maintainable and therefore, the learned Magistrate was not justified in taking cognizance and issuing process to the complainant. He relied on a decision of the Hon’ble Apex Court in the case of ‘Himanshu v. B.Shivamurthy & another’ reported in (2019) 3 SCC 797. 5. A perusal of complaint averments clearly goes to show that the petitioners are arraigned as accused in the capacity of Managing Director and the Office Bearer of one ‘Yagna Chits Pvt. Ltd.’. Cheque was allegedly issued by accused No.1 in the capacity of Managing Director. However, admittedly the said ‘Yagna Chits Pvt. Ltd.’ has not been arraigned as accused in the complaint. The Hon’ble Apex Court, in the above referred decision has observed, in an identical circumstance, that in the absence of the company - 5 - NC: 2025:KHC:11734 CRL.P No. 347 of 2020 C/w CRL.P.NO.875/2020 being arraigned as an accused, a complaint was not maintainable. Para-13 of the judgment is extracted hereunder: “13. In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused.” 6. It is also relevant to extract para-43 of Judgment of Hon’ble Apex Court in the case of ‘Aneeta Hada v. M/s. Godfather Travels & Tours Pvt. Ltd.’ reported in (2012) 5 SCC 661, which is extracted hereunder: “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 which is a three Judge Bench decision. Thus, the view expressed in Sheoratan - 6 - NC: 2025:KHC:11734 CRL.P No. 347 of 2020 C/w CRL.P.NO.875/2020 Agarwal does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada is overruled with the qualifier as stated in paragraph 37. The decision in Modi Distilleries has to be treated to be restricted to its own facts as has been explained by us hereinabove.” 7. It is also relevant to mention that insofar as accused No.2 is concerned, admittedly, she is not a signatory to the cheque in question. She has been arraigned as an accused alleging that she was one of the Office Bearer of the said establishment. On such bald allegations, a complaint alleging an offence under Section 138 of N.I. Act is not maintainable against the said accused. 8. For the forgoing reasons, the following: ORDER i. Both the petitions are allowed. ii. The entire proceedings in CC No.5557/2019 pending on the file of the Court of I Additional Civil Judge and JMFC, Mysore, is quashed. Sd/- (MOHAMMAD NAWAZ) JUDGE TL List No.: 1 Sl No.: 39