- 1 - NC: 2025:KHC:13049 CRL.P No. 657 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 657 OF 2025 (482(Cr.PC) / 528(BNSS)) BETWEEN: 1. MR. G. R. NARAYAN AGED ABOUT 74 YEARS, SON OF LATE G. RAMAIAH 2. MRS. SUVASINI NARAYAN AGED ABOUT 63 YEARS, WIFE OF G.R. NARAYAN BOTH PETITIONERS RESIDING AT NO.005, KUMAR PARADISE APARTMENT, B.P. WADIA ROAD, BASAVANAGUDI, BANGALORE - 560004. …PETITIONERS (BY SMT. VAISHNAVI NAIK., ADVOCATE) AND: 1. VADIRAJA BHAT. Y AGED ABOUT 36 YEARS, SON OF VENKATARAMANA RESIDING AT BHAT, 1013, VIJAYALAKSHMI NILAYA, 2ND STAGE, B BLOCK, Digitally signed by R HEMALATHA Location: High Court of Karnataka - 2 - NC: 2025:KHC:13049 CRL.P No. 657 of 2025 S.P.S NAGARA, DAVANAGERE …RESPONDENT THIS CRL.P IS FILED U/S 482 CR.PC (FILED U/S 528 BNNS) PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 29.06.2024 PASSED IN C.C. 1628/2024 BY THE HONBLE III ADDITIONAL SENIOR CIVIL JUDGE AND JMFC, DAVANAGERE, IN SO FAR AS THE PETITIONERS ARE CONCERNED. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR ORAL ORDER The petitioners are contesting the cognizance taken for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (N.I. Act). 2. The respondent filed a private complaint under Section 200 of the Code of Criminal Procedure, 1973 (Cr.P.C.), stating that the subject cheque, issued by accused No.1-company, was dishonoured upon presentation due to insufficient funds. 3. The petitioners’ counsel submitted that accused Nos.4 and 5 had ceased to be directors of the company as of the date of cheque issuance. In the absence of any material evidence to substantiate that the petitioners were involved in the day-to-day affairs and conduct of the - 3 - NC: 2025:KHC:13049 CRL.P No. 657 of 2025 business, they cannot be held vicariously liable along with the company as stipulated under Section 141 of the N.I. Act. 4. In response, the respondent’s counsel argued that whether the petitioners were involved in the company’s daily operations and whether they had ceased to be directors at the time of cheque issuance are matters to be determined during the trial and cannot be adjudicated at this preliminary stage. 5. Upon hearing the learned counsels for both parties, it is observed that the complaint lacks specific allegations indicating that accused Nos.4 and 5 were involved in the day-to-day affairs and conduct of the company’s business. Furthermore, the petitioners have provided documents issued by the Ministry of Corporate Affairs indicating that they ceased to be directors of the company effective from May 25, 2022, while the subject cheque was issued in November 2023. Given that the petitioners-accused Nos.4 and 5 were not directors of accused No.1-company at the time the cheque was issued, they cannot be held vicariously liable under Section 141 of the N.I. Act. Continuing criminal proceedings against them under these circumstances would constitute an abuse of the process of law. - 4 - NC: 2025:KHC:13049 CRL.P No. 657 of 2025 Accordingly, the petition is allowed. The impugned proceedings in C.C. No.1628/2024, pending before the learned III Additional Senior Civil Judge and JMFC, Davanagere, insofar as they relate to the petitioners- accused Nos.4 and 5 are hereby quashed. Sd/- (HEMANT CHANDANGOUDAR) JUDGE BKM List No.: 2 Sl No.: 15