- 1 - HC-KAR NC: 2025:KHC-D:11024 CRL.P No. 101360 of 2025 IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 29TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY CRIMINAL PETITION NO. 101360 OF 2025 (482(CR.PC)/528(BNSS)) BETWEEN: 1. M/S. AISHWARYAGIRI CONSTRUCTIONS PVT. LTD., NO.236, 2ND STAGE, 2ND MAIN, 5TH CROSS, KHB COLONY, BASAVESHWARANAGAR, BENGALURU-560 079, REP. BY ITS MANAGING DIRECTOR, SRI. G. JAYARAMAIAH. 2. SRI. G. JAYARAMAIAH S/O GIRIYAPPA, AGED ABOUT 57 YEARS, MANAGING DIRECTOR, AISHWARYAGIRI CONSTRUCTION PVT. LTD., NO.236, 2ND STAGE, 2ND MAIN, 5TH CROSS, KHB COLONY, BASAVESHWARANAGAR, BENGALURU-560 079. … PETITIONERS (BY SRI. TANVEER AHMED SHARIFF, ADVOCATE) AND: SMT. RATNA W/O LATE BASAVARAJ MARADABUDAKIN, AGED ABOUT 36 YEARS, OCC. HOUSE WIFE, R/AT: NEAR KHB COLONY, YALAKKI SHETTAR COLONY, DHARWAD-580 004. … RESPONDENT (BY SRI. VENKATESH M. KHARVI, ADVOCATE) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C. (UNDER SECTION 528 OF BNSS), PRAYING TO QUASH THE PROCEEDINGS IN C.C. NO.54/2023 PENDING BEFORE THE III ADDL. CIVIL JUDGE AND JMFC AT DHARWAD, AGAINST ACCUSED NO.1 AND 2 FOR OFFENCES UNDER SECTION 138 AND 142 OF N.I. ACT. THIS PETITION, COMING ON FOR ADMISSION THIS DAY, ORDER IS MADE THEREIN AS UNDER: RAKESH S HARIHAR Digitally signed by RAKESH S HARIHAR Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - HC-KAR NC: 2025:KHC-D:11024 CRL.P No. 101360 of 2025 ORAL ORDER (PER: THE HON'BLE MR. JUSTICE S.VISHWAJITH SHETTY) Petitioners are before this Court with a prayer to quash the entire proceedings in C.C. No.54 of 2023 pending before the Court of III Additional Civil Judge and JMFC, Dharwad, registered for offences punishable under Sections 138 and 142 of the Negotiable Instruments Act. 2. Heard the learned counsel for the parties. 3. Learned counsel for the petitioners submits that there is no specific allegation against the Managing Director of the accused No.1 – Company and therefore, in the absence of specific averments as against the Managing Director in the complaint, proceedings could not have been initiated against him. 4. Learned counsel for the respondent, however has opposed the prayer made in the petition. 5. The impugned proceedings have been initiated against the Company and its Managing Director, for offence punishable under Sections 138 and 142 of the Negotiable - 3 - HC-KAR NC: 2025:KHC-D:11024 CRL.P No. 101360 of 2025 Instruments Act. It is not in dispute that the cheuqe in question has been drawn on the account maintained by the drawee Bank in the name of the Company, which is arrayed as accused No.1 to the impugned criminal proceedings. Accused No.2 is the Managing Director of the said Company, which has issued the cheque in question. 6. The Hon'ble Supreme Court in the case of K.K. Ahuja vs. V.K. Vora and another1 has observed as follows: “27. The position under section 141 of the Act can be summarized thus: (i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix `Managing' to the word `Director' makes it clear that they were in charge of and are responsible to the company, for the conduct of the business of the company. 1 (2009) 10 SCC 48 - 4 - HC-KAR NC: 2025:KHC-D:11024 CRL.P No. 101360 of 2025 (ii) In the case of a director or an officer of the company who signed the cheque on behalf of the company, there is no need to make a specific averment that he was in charge of and was responsible to the company, for the conduct of the business of the company or make any specific allegation about consent, connivance or negligence. The very fact that the dishonoured cheque was signed by him on behalf of the company, would give rise to responsibility under sub-section (2) of Section 141. (iii) In the case of a Director, Secretary or Manager (as defined in Sec. 2(24) of the Companies Act) or a person referred to in clauses (e) and (f) of section 5 of Companies Act, an averment in the complaint that he was in charge of, and was responsible to the company, for the conduct of the business of the company is necessary to bring the case under section 141(1). No further averment would be necessary in the complaint, though some particulars will be desirable. They can also be made liable under section 141(2) by making necessary averments relating to consent and connivance or negligence, in the complaint, to bring the matter under that sub-section. (iv) Other Officers of a company can not be made liable under sub-section (1) of section 141. Other officers of a company can be made liable only under sub-section (2) of Section 141, be averring in the complaint their position and duties in the company and their role in regard to the issue and dishonour of the cheque, disclosing consent, connivance or negligence. - 5 - HC-KAR NC: 2025:KHC-D:11024 CRL.P No. 101360 of 2025 7. This Court in the case of Agarwal Coal Corporation Pvt. Ltd., vs. Benaka Sponge Iron Pvt Ltd. and others2 has observed as follows: “7. Section 141 of the N.I. Act provides for criminal liability for dishonour of cheque committed by company. In the case of K.K.AHUJA AND V.K.VORA AND ANOTHER – (2009) 10 SCC 48, the Hon’ble Supreme Court after referring to the judgment of SMS PHARMACEUTICALS V. NEETA BHALLA & ANR – 2005 (8) SCC 89 has observed that signatory of a cheque which is dishonoured is clearly responsible for the act and his liability is covered under Section 141(2) of N.I. Act. Therefore, no specific averments would be necessary to make him liable to be prosecuted for offence under Section 138 of N.I. Act. Similarly Managing Director and Deputy Managing Director by virtue of their office which they holding would come under Section 141(1) of N.I. Act even if there is no specific averments against them. Insofar as the other directors are concerned there has to be specific averments as against them in the complaint with regard to their role and responsibility in the conduct of business of the company and in the absence of such allegation or 2 In Crl.P.No.100988/2024 & connected matters disposed of on 19.08.2025 - 6 - HC-KAR NC: 2025:KHC-D:11024 CRL.P No. 101360 of 2025 averments the other directors cannot be prosecuted for the alleged offences. In the case on hand, learned counsel for the petitioner has fairly submitted that insofar as respondent Nos.4 to 6 are concerned, who are the other directors, the petitions are not being pressed. Insofar as respondent No.3 is concerned, who is the sole signatory of the cheques in question even in the absence of any specific allegations or averments against him in the complaint he is liable to be prosecuted.” 8. Under the circumstances, I do not find any merit in the contention urged on behalf of the petitioners that, in the absence of specific averments with regard to the role of the Managing Director of the first accused Company, the impugned proceedings could not have been initiated against accused Nos.1 and 2. 9. Therefore, I am not inclined to entertain this petition. Accordingly, the petition is dismissed. Sd/- (S.VISHWAJITH SHETTY) JUDGE RSH / CT:BCK LIST NO.: 1 SL NO.: 75