2025:HHC:25014 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Cr. Appeal No. 401 of 2025 Reserved on: 21.07.2025 Date of Decision: 30.07.2025 Executive Director (Personnel), HPSEBL ... Appellant Versus Director, GNG Trading Company Pvt. Ltd. ...Respondent Coram Hon’ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting?1 Yes For the Appellant : Mr. Bhairav Gupta, Advocate. For the Respondent : Nemo. Rakesh Kainthla, Judge The appellant has filed the present appeal against the judgment dated 30.05.2025 passed by learned Additional Chief Judicial Magistrate, Court No.1, Shimla, District Shimla, H.P. (learned Trial Court) vide which the complaint filed by the complainant was dismissed. (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.) 1 Whether reporters of Local Papers may be allowed to see the judgment? Yes. P a g e | 2 2025:HHC:25014 2. Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (in short ‘NI Act’). It was asserted that the accused was Director of M/s GNG Trading Company Pvt. Ltd. An agreement was executed between M/s GNG Trading Company Pvt. Ltd., Government of Himachal Pradesh and Society for Promotion of Information Technology and E-Governance on 08.09.2008. A Tripartite Memorandum of Understanding was executed on 15.05.2010. M/s GNG Company started collecting electricity bills through Lok Mitra Kendra, however, it remained irregular in paying the collected amount to the complainant. The accused issued 24 cheques of ₹13,41,79,737/-. Out of which four cheques of ₹1,66,79,737/- were honoured; however, other cheques were dishonoured with the endorsement ‘funds insufficient’. The complainant issued a legal notice to the correct address of the accused, asking him to make the payment, and the notice was duly served upon the accused. However, the accused failed to make any payment; hence, a complaint was filed to take action against the accused as per law. P a g e | 3 2025:HHC:25014 3. Learned Trial Court recorded the preliminary evidence and found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to him for the commission of an offence punishable under Section 138 of the NI Act, to which he pleaded not guilty and claimed to be tried. 4. The complainant examined himself (CW1) to prove his case. 5. The accused, in his statement recorded under Section 313 of Cr.P.C., admitted that he was a Director of the Company but denied that he had issued the cheques. 6. Learned Trial Court held that the cheques were issued by the authorised signatory Company of M/s GNG Company Pvt. Ltd. The Company is primarily liable for the dishonour of the cheques. The liability of the accused is vicarious, and in the absence of the Company, the accused cannot be held liable for the commission of the offence. Hence, the complaint was dismissed. 7. Feeling aggrieved and dissatisfied with the judgment passed by the learned Trial Court, the complainant has filed the present appeal, asserting that the learned Trial Court had failed to appreciate the material placed on record. The evidence was P a g e | 4 2025:HHC:25014 ignored, and the accused was wrongly acquitted. There is a presumption that the cheque was issued in discharge of the liability, and this presumption was not rebutted. The accused did not dispute the issuance of the cheque, and the presumption would arise in the present case. The accused failed to produce any evidence to establish the plea taken by him. The accused admitted that he was Managing Director of M/s GNG Trading Company Ltd. It was wrongly held that the Company was required to be added as a party. The accused was In charge of the affairs of the Company, and he was liable for the commission of an offence. The provisions of Section 141 of the NI Act were ignored. Therefore, it was prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside. 8. Mr. Bhairav Gupta, learned counsel for the appellant/complainant, submitted that the learned Trial Court erred in dismissing the complaint. The accused did not dispute that he was the Managing Director of M/s GNG Trading Company, therefore, he was liable by virtue of his position for the commission of an offence punishable under Section 138 of the NI Act. Learned Trial Court erred in dismissing the complaint, hence, P a g e | 5 2025:HHC:25014 he prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside. 9. I have given considerable thought to his submissions made at the bar and have gone through the records carefully. 10. The present appeal has been filed against a judgment of acquittal. It was laid down by the Hon’ble Supreme Court in Surendra Singh v. State of Uttarakhand, 2025 SCC OnLine SC 176: (2025) 5 SCC 433 that the Court can interfere with a judgment of acquittal if it is patently perverse, is based on misreading/omission to consider the material evidence and reached at a conclusion which no reasonable person could have reached. It was observed: “11. Recently, in the case of Babu Sahebagouda Rudragoudar v. State of Karnataka 2024 SCC OnLine SC 4035, a Bench of this Court to which one of us was a Member (B.R. Gavai, J.) had an occasion to consider the legal position with regard to the scope of interference in an appeal against acquittal. It was observed thus: “38. First of all, we would like to reiterate the principles laid down by this Court governing the scope of interference by the High Court in an appeal filed by the State for challenging the acquittal of the accused recorded by the trial court. 39. This Court in Rajesh Prasad v. State of Bihar [Rajesh Prasad v. State of Bihar, (2022) 3 SCC 471: (2022) 2 SCC (Cri) 31] encapsulated the legal position covering the field after considering various earlier judgments and held as below : (SCC pp. 482-83, para 29) P a g e | 6 2025:HHC:25014 “29. After referring to a catena of judgments, this Court culled out the following general principles regarding the powers of the appellate court while dealing with an appeal against an order of acquittal in the following words: (Chandrappa case [Chandrappa v. State of Karnataka, (2007) 4 SCC 415: (2007) 2 SCC (Cri) 325], SCC p. 432, para 42) ‘42. From the above decisions, in our considered view, the following general principles regarding the powers of the appellate court while dealing with an appeal against an order of acquittal emerge: (1) An appellate court has full power to review, reappreciate and reconsider the evidence upon which the order of acquittal is founded. (2) The Criminal Procedure Code, 1973 puts no limitation, restriction or condition on the exercise of such power and an appellate court, on the evidence before it, may reach its own conclusion, both on questions of fact and law. (3) Various expressions, such as “substantial and compelling reasons”, “good and sufficient grounds”, “very strong circumstances”, “distorted conclusions”, “glaring mistakes”, etc., are not intended to curtail the extensive powers of an appellate court in an appeal against acquittal. Such phraseologies are more in the nature of “flourishes of language” to emphasise the reluctance of an appellate court to interfere with an acquittal than to curtail the power of the court to review the evidence and to come to its own conclusion. (4) An appellate court, however, must bear in mind that in case of acquittal, there is a double presumption in favour of the accused. Firstly, the presumption of innocence is available to him under the fundamental principle of P a g e | 7 2025:HHC:25014 criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused, having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court. (5) If two reasonable conclusions are possible on the basis of the evidence on record, the appellate court should not disturb the finding of acquittal recorded by the trial court.” 40. Further, in H.D. Sundara v. State of Karnataka [H.D. Sundara v. State of Karnataka, (2023) 9 SCC 581: (2023) 3 SCC (Cri) 748] this Court summarised the principles governing the exercise of appellate jurisdiction while dealing with an appeal against acquittal under Section 378CrPC as follows: (SCC p. 584, para 8) “8. … 8.1. The acquittal of the accused further strengthens the presumption of innocence. 8.2. The appellate court, while hearing an appeal against acquittal, is entitled to reappreciate the oral and documentary evidence; 8.3. The appellate court, while deciding an appeal against acquittal, after reappreciating the evidence, is required to consider whether the view taken by the trial court is a possible view which could have been taken on the basis of the evidence on record; 8.4. If the view taken is a possible view, the appellate court cannot overturn the order of acquittal on the ground that another view was also possible; and 8.5. The appellate court can interfere with the order of acquittal only if it comes to a finding that the only conclusion which can be recorded on the basis of the evidence on record was that the guilt of the accused was proved beyond a reasonable doubt and no other conclusion was possible.” P a g e | 8 2025:HHC:25014 41. Thus, it is beyond the pale of doubt that the scope of interference by an appellate court for reversing the judgment of acquittal recorded by the trial court in favour of the accused has to be exercised within the four corners of the following principles: 41.1. That the judgment of acquittal suffers from patent perversity. 41.2. That the same is based on a misreading/omission to consider material evidence on record; and 41.3. That no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.” 12. It could thus be seen that it is a settled legal position that the interference with the finding of acquittal recorded by the learned trial judge would be warranted by the High Court only if the judgment of acquittal suffers from patent perversity; that the same is based on a misreading/omission to consider material evidence on record; and that no two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.” 11. The present appeal is required to be decided as per the parameters laid down by the Hon’ble Supreme Court. 12. It was specifically asserted in the complaint that the Master Service Agreement was executed between M/s GNG Trading Company Ltd. and Society for Promotion of Information Technology and E-Governance on 08.09.2008. A Tripartite Memorandum of Understanding was executed on 15.05.2010, and M/s GNG Trading Company started collecting electricity bills through Lok Mitra Kendra. The Company was irregular in paying P a g e | 9 2025:HHC:25014 the collected amount, and the cheques were issued to discharge the liability of the Company. Therefore, it is apparent from the averments made in the complaint that the primary responsibility for the payment of the amount was that of the Company. 13. Learned Trial Court had rightly noticed that cheque was issued on behalf of the Company and it was signed by authorised signatory; therefore, the Company would be liable for the commission of an offence punishable under Section 138 of the NI Act. It was laid down by the Hon'ble Supreme Court in Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661, that it is not permissible to prosecute the Directors in the absence of the Company. It was observed: “58. Applying the doctrine of strict construction, we are of the considered opinion that the commission of the offence by the company is an express condition precedent to attract the vicarious liability of others. Thus, the words “as well as the company” appearing in the section make it unmistakably clear that 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. One cannot be oblivious to the fact that the company is a juristic person and it has its respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a Director is indicted. P a g e | 10 2025:HHC:25014 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.” 14. This judgment was followed by the Hon'ble Supreme Court in Charanjit Pal Jindal v. L.N. Metalics, (2015) 15 SCC 768: 2015 SCC OnLine SC 1033, and it was held: “11. From the aforesaid finding, we find that after analysing all the provisions and having noticed the different decisions rendered by this Court, the three-judge Bench arrived at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning a company as an accused is imperative. Hence, in this case, we find no reason to refer the matter to the larger Bench. 12. In the present case, only the appellant was impleaded as an accused. In that view of the matter, we are of the view that the complaint with respect to the offence under Section 138 read with Section 141 of the Act was not maintainable following the decision in Aneeta Hada [Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661: (2012) 3 SCC (Civ) 350: (2012) 3 SCC (Cri) 241]. We set aside the judgment dated 17-4-2010 passed by the trial court, the order dated 27-5-2011 passed by the appellate court and the impugned judgment dated 9-11-2012 passed by the High Court of Orissa, Cuttack in Charanjit Pal Jindal v. L.N. Metalics [Charanjit Pal Jindal v. L.N. Metalics, Criminal Revision No. 467 of 2011, decided on 9-11-2012 (Ori)]. The appellant stands acquitted.” 15. This position was reiterated in Himanshu v. B. Shivamurthy, (2019) 3 SCC 797: 2019 SCC OnLine SC 83, and it was held: P a g e | 11 2025:HHC:25014 “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.” 16. A similar view was taken in Pawan Kumar Goel v. State of U.P., 2022 SCC OnLine SC 1598, wherein it was held: “31. This Court has been firm with the stand that if the complainant fails to make specific averments against the company in the complaint for the commission of an offence under Section 138 of the NI Act, the same cannot be rectified by taking recourse to general principles of criminal jurisprudence. Needless to say, the provisions of Section 141 impose vicarious liability by deeming a fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub-sections (1) and (2) would not be liable to be convicted based on the principles of vicarious liability.” 17. Therefore, in view of the binding precedents of the Hon’ble Supreme Court, the prosecution of the Company was necessary before the accused could be held vicariously liable in his capacity as the Managing Director. Since the Company was not arrayed as an accused, therefore, the learned Trial Court had rightly dismissed the complaint. P a g e | 12 2025:HHC:25014 18. In view of the above, the present appeal fails, and the same is dismissed. (Rakesh Kainthla) Judge 30th July, 2025 (ravinder)