1 2025:CGHC:6295 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR ACQA No. 776 of 2024 • Rajeev Kumar Gupta S/o Late Jamunalal Gupta Aged About 48 Years R/o Gali No. 02, Vikas Nagar, Kotraroad, Tahsil And District Raigarh (C.G.) ... Appellant. versus • Rameshwar Prasad S/o Choloram Aged About 38 Years R/o Putkapuri, Tahsil Pussor District Raigarh (C.G.) ... Respondent For appellant. : Mr. Manoj Kumar Jaiswal, Advocate. For Respondent. : Mr. Rahul Mishra, Advocate appears on behalf of Mr. Dhaniram Patel, Advocate. (Hon’ble Mr.Justice Narendra Kumar Vyas) Order on Board 04/02/2025 1. The appellant/complainant has filed this appeal being aggrieved by acquittal of the impugned order dated 9-12-2021 passed by the 2 Judicial Magistrate First Class, Raigarh (CG) in Complaint Case No. 173 of 2019 whereby the complaint filed by the appellant - complainant has been rejected mainly on the count that the appellant has not arrayed the Milk Production Sahkari Samiti Maryadit as party to the case. 2. The brief facts of the case are that the appellant/complainant has filed a complaint case before the learned Judicial Magistrate First Class, Raigarh under Section 138 of the Negotiable Instruments Act alleging that the respondent/accused is Secretary of the Milk Production Sahkari Samiti Maryadit Putkapuri Block Pussore and the appellant is proprietor and running business of Bhawani Milk Diary at village Kurmapali and during the period from 1st September to 30th September, the respondent/accused had purchased 1900 liters milk from the appellant and account of that the respondent/accused having bank account No. 36840657065 had issued cheque No.241635 dated 26-12-2018 of Rs.50,460/- of State bank of India in the name of the appellant. 3. The appellant presented the said cheque in the State Bank of India, Branch Kotraroad, Raigarh for payment and the said cheque was returned back with an endorsement that the said cheque was dishonoured due to insufÏcient funds in the account of respondent/accused. Thereafter, on 21-1-2019 the appellant sent a registered notice through his counsel which was received by the respondent on 4-2-2019, but the respondent deliberately has not returned the amount, therefore, the appellant filed a complaint case against the respondent under Section 200 of the Code of Criminal Procedure read with Section 138 of the Negotiable Instruments Act before the learned Judicial Magistrate First which is registered as Criminal Case No. 173 of 2019 and prayed for grant of 3 said amount of cheque along with two times compensation and also prayed for imposition of punishment against the respondent. 4. Learned trial Court taking cognizance of issue has summoned notice to the respondent/accused. Complainant has examined in examination of chief by way of an afÏdavit as provided under Section 145 of the Negotiable Instruments Act and exhibited the cheque (Ex,.P/1), Bank forwarded memo (Ex,.P/2), postal receipt along with notice (Ex.P/3). The witness was cross examined wherein it has been specifically stated that he is supplying the mil on behalf of Bhavani milk diary, Kurmapali, Kotraroad, Police Station Raigarh and also stated that he never supplied the milk on his behalf. He has further stated that he is owner of Bhavani milk diary, Kurmapli, Kotraroad. He has also admitted that the milk was supplied to Milk Diary Sahkari Samiti, Putkapuri, Tahsil Raigarh. He voluntarily stated that the respondent came to Milk diary and he is the Secretary of the Milk production Co-operative Society. He ha also admitted that he has not filed any documents with regard to authorization to file a complaint. He has also admitted that he has not filed any document to demonstrate that he supplied the milk from January 2018 till December to the Milk Diary Sahakari Samiti. He has also admitted that cheque (Ex.P/1) bearing signature of Secretary and Vice President of Milk Diary Cooperative Society is available. Respondent/accused has not examined any witness but he has examined under Section 313 of Cr.P.C. 5. Learned trial Court on the basis of evidence and material placed on record has dismissed the complaint by recording its finding that the appellant is unable to discharge his liability and has also not complied the provisions of Section 139 of the NI Act and acquitted the respondent. Being aggrieved by the said order, the 4 appellant/complainant has filed the instant acquittal appeal. 6. Learned counsel for the appellant/complainant reiterating the submission before the learned trial Court would submit that the finding recorded by the learned trial court is perverse and contrary to the evidence and material on record and would pray for allowing the acquittal appeal. 7. Per contrary, learned counsel for the respondent would submit that the learned trial Court after appreciating the evidence and material available on record has acquitted the respondent and there is no perversity or illegality in the impugned judgment of the trial Court warranting any interference by this Court. 8. I have heard learned counsel for the parties and perused the record along with impugned judgment. 9. From the submissions made by learned counsel for the parties at length, the points emerge for determination of this Court are (1) whether the respondent who is Secretary of the Milk Diary Cooperative Society is liable to be arrayed as accused in the complaint case under Section 138 of the NI Act and in absence thereof what is its effect ? and (2) whether the finding recorded by the trial Court regarding dismissal of the complaint case is legal and justified. 10. To appreciate this issue raised in this appeal, it is expedient for this Court to extract Section 141 of the Negotiable Instruments Act, 1881 which reads as under. “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 5 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 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 ofÏce 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 ofÏcer of the company, such director, manager, secretary or other ofÏcer 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. 11. From bare perusal of complaint under Section 141 of the NI Act, it is quite vivid that company means company any body corporate and includes a firm or other association of individuals; and director means a partner in the firm. From perusal of the aforesaid provisions, it is quite vivid that the respondent being Co-operative Society falls within the company as defined in explanation under Section 141 of the NI Act. Whether the Cooperative society falls within the ambit of company as defined in Section 141 of NI Act is the subject matter of consideration before the High Court of Kerala in case of P.M. Mathew vs. State of Kerala in Cri.M.C.No.4884 , 4885 and 4893 of 2017 decided on 29-8-2017 wherein this Court has considered that the ofÏce bearer who is ofÏcer of the Co- 6 operative society cannot be made to personally suffer either any substantive sentence or fine or default sentence on account of nonpayment of fine by the accused. It is held that as per Kerala Co-operative Society Act, 1969, only the Managing Director can sue or be sued in the name of Co-operative society concerned. Therefore, non-arraying the accused is illegality and on this count alone the petition is liable to be dismissed. 12. The same issue has come up for consideration before the Hon’ble Supreme Court in the case of Aneeta Hada vs. Godfather Travels and Tours Pvt Ltd and other writ petitions, reported in (2012) 5 SCC 661 wherein Hon’ble the the Supreme Court has held in para 24, 26, 32 to 39 as under. “24  Section 141 uses the term ‘person’ and refers it to a company. There is no trace of doubt that the company is a juristic person. The concept of corporate criminal liability is attracted to a corporation and company and it is so luminescent from the language employed under Section 141 of the Act. It is apposite to note that the present enactment is one where the company itself and certain categories of ofÏcers in certain circumstances are deemed to be guilty of the offence. 32. We have referred to the aforesaid authorities to highlight that the company can have criminal liability and further, if a group of persons that guide the business of the companies have the criminal intent, that would be imputed to the body corporate. In this backdrop, Section 141 of the Act has to be understood. The said provision clearly stipulates that when a person which is a company commits an offence, then certain categories of persons in charge as well as the company would be deemed to be liable for the offences under Section 138. Thus, the statutory intendment is absolutely plain. As is perceptible, the provision makes the functionaries and the companies to be liable and that is by deeming fiction. A deeming fiction has its own signification. 7 33. In this context, we may refer with profit to the observations made by Lord Justice James in Ex Parte Walton, In re, Levy[34], which is as follows: “When a statute enacts that something shall be deemed to have been done, which, in fact and truth was not done, the Court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to.” 34. Lord Asquith, in East end Dwellings Co. Ltd. v. Finsbury Borough Council[35] , had expressed his opinion as follows: “If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents, which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.... The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.”359. In The Bengal Immunity Co. Ltd. v. State of Bihar and others[36], the majority in the Constitution Bench have opined that legal fictions are created only for some definite purpose. 35. In Bengal Immunity Co. Ltd. vs. State of Bihar, the majority in the Constitution Bench have opined that legal fictions are created only for some definite purpose. 36 In Hira H. Advani Etc. v. State of Maharashtra, while dealing with a proceeding under the Customs Act, especially sub-section (4) of Section 171-A wherein an enquiry by the custom authority is referred to, and the language employed therein, namely, "to be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code", it has been opined as follows: “It was argued that the Legislature might well have used the word "deemed" in Sub-section (4) of Section 171 not in the first of the above senses but in the second, if not the third. In our view the meaning to be attached to the word "deemed" must depend upon the context in which it is used.” 8 37. In State of Tamil Nadu v. Arooran Sugars Ltd.[38], the Constitution Bench, while dealing with the deeming provision in a statute, ruled that the role of a provision in a statute creating legal fiction is well settled. Reference was made to The Chief Inspector of Mines and another v. Lala Karam Chand Thapar Etc.[39], J.K. Cotton Spinning and Weaving Mills Ltd. and anr. v. Union of India and others[40], M. Venugopal v. Divisional Manager, Life Insurance Corporation of India[41]  and Harish Tandon v. Addl. District Magistrate, Allahabad[42] and eventually, it was held that when a statute creates a legal fiction saying that something shall be deemed to have been done which in fact and truth has not been done, the Court has to examine and ascertain as to for what purpose and between which persons such a statutory fiction is to be resorted to and thereafter, the courts have to give full effect to such a statutory fiction and it has to be carried to its logical conclusion. 38. 38. From the aforesaid pronouncements, the principle that can be culled out is that it is the bounden duty of the court to ascertain for what purpose the legal fiction has been created. It is also the duty of the court to imagine the fiction with all real consequences and instances unless prohibited from doing so. That apart, the use of the term 'deemed' has to be read in its context and further the fullest logical purpose and import are to be understood. It is because in modern legislation, the term 'deemed' has been used for manifold purposes. The object of the legislature has to be kept in mind. 39. The word ‘deemed’ used in Section 141 of the Act applies to the company and the persons responsible for the acts of the company. It crystallizes the corporate criminal liability and vicarious liability of a person who is in charge of the company. What averments should be required to make a person vicariously liable has been dealt with in SMS Pharmaceuticals Ltd. (supra). In the said case, it has been opined that the criminal liability on account of dishonour of cheque primarily falls on the drawee company and is extended to the ofÏcers of the company and as there is a specific provision extending the liability to the ofÏcers, the conditions incorporated in Section 141 are to be satisfied” 9 13. It is incumbent upon the complainant to array the company as Society as party to the case and in absence of arraying the society as party to the case, the finding recorded by the learned trial Court that the appellant has not been able to discharge his liability by the company does not suffer from any perversity or illegality warranting any interference by this Similarly, the finding recorded by the learned trial Court does not suffer from perversity regarding no document has been produced by the complainant showing that he is authorized by the company proprietor which is well frame work of the provisions of Section 138 of the Negotiable Instruments. 14. Considering all the facts and circumstances of the case, evidence and material on record and in view of the law laid down by the Hon’ble Supreme Court in case of Aneeta Hada (supra), I am of the opinion that there is no scope for interference by this court. Accordingly, the acquittal appeal being devoid of merit is liable to be and is hereby dismissed. Sd/- (Narendra Kumar Vyas) JUDGE Raju RAVVA SATYANARAYANA RAJU Digitally signed by RAVVA SATYANARAYANA RAJU Date: 2025.03.26 14:34:45 +0530