- 1 - NC: 2025:KHC-D:2138 CRL.P No. 103309 of 2022 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 4TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR CRIMINAL PETITION NO. 103309 OF 2022 (482(Cr.PC)/528(BNSS)) BETWEEN: 1. MAHAMMADHUSEN S/O. ABDULRAJAKSAB MULLA AGE. 40 YEARS, OCC. BUSINESS, R/O. MULLA GALLI, ATHANI, DIST. BELAGAVI-591304. 2. SMT. AREEFA W/O. MAHAMMADHUSEN MULLA AGE. 36 YEARS, OCC. BUSINESS, R/O. MULLA GALLI, ATHANI, DIST. BELAGAVI-591304. …PETITIONERS (BY SRI. SHADAB HASANSAB YADAWAD, ADVOCATE) AND: ISHWAR S/O. DUNDAPPA PANCHAXARI AGE. 63 YEARS, OCC. SERVICE, R/O. PANCHAXARI GALLI, TERDAL, TQ. BANAHATTI, DIST. BAGALKOT-587311. …RESPONDENT (BY SRI. HARISH MAIGUR, ADVOCATE) THIS CRIMINAL PETITION IS FILED U/S 482 OF CR.P.C., SEEKING TO, QUASH THE ORDER DATED 16.11.2019 IN CC NO.299/2020 (C.C. NO.901/2019 OLD NUMBER) FILED U/S 138 OF N.I. ACT IN TAKING COGNIZANCE BY HON’BLE CIVIL JUDGE AND JMFC, BENAHATTI WHICH IS NOW PENDING BEFORE THE SENIOR CIVIL JUDGE AND JMFC, BANAHATTI AGAINST PETITIONERS/ ACCUSED NO.1 AND 11. THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR B K MAHENDRAKUMAR Digitally signed by B K MAHENDRAKUMAR Location: High Court of Karnataka, Dharwad Bench Date: 2025.02.07 11:09:29 +0530 - 2 - NC: 2025:KHC-D:2138 CRL.P No. 103309 of 2022 ORAL ORDER 1. The present petition is filed challenging the cognizance taken for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. 2. The respondent filed a private complaint under Section 200 of the Cr.P.C., stating that he and his family members had deposited money with Karnataka Co-operative Credit Society Ltd. Despite the deposit having matured, the accused failed to return the amount. Upon the respondent approaching the Society for repayment, a cheque for Rs. 3,37,584/- was issued towards the return of the deposited amount. However, when the said cheque was presented for encashment, it was dishonored with the endorsement “payment stopped by the drawer.” Consequently, the learned Magistrate, after recording the sworn statement, issued summons to the accused. 3. The learned counsel for the petitioners submitted that the subject cheque was allegedly issued on behalf of the Society. However, as the Society itself has not been arraigned as an accused, the petitioners, who were merely office bearers of the Society, cannot be held vicariously liable under Section 141 of the Negotiable Instruments Act, 1881. 4. In response, the learned counsel for the respondent contended that the petitioners/accused were involved in the day-to- day affairs of the Society and were responsible for its conduct. - 3 - NC: 2025:KHC-D:2138 CRL.P No. 103309 of 2022 Therefore, they are liable to be prosecuted under Section 138 of the Negotiable Instruments Act. 5. Upon considering the arguments advanced by both parties, the following is noted: A perusal of the subject cheque dated 28.08.2019 indicates that it was signed by two authorized signatories. However, the complaint does not contain specific averments attributing liability to each of the accused for issuing the cheque. 6. Section 141 of the Negotiable Instruments Act, 1881, deals with offences by companies and defines a “company” as including any body corporate, firm, or other association of individuals. In the present case, the Society falls within the ambit of a “body corporate” under Section 141. Since the Society itself has not been arraigned as an accused, the petitioners, being its office bearers, cannot be held vicariously liable. 7. In the absence of specific allegations against the petitioners and the non-arraignment of the Society as an accused, the continuation of criminal proceedings would amount to an abuse of the process of law. Accordingly, I pass the following: ORDER i) The petition is allowed. ii) The impugned proceedings in CC No.299/2020 pending on the file of the learned Civil Judge and - 4 - NC: 2025:KHC-D:2138 CRL.P No. 103309 of 2022 JMFC, Banahatti, insofar as it relates to the petitioners – accused Nos.1 and 11 is hereby quashed. Sd/- (HEMANT CHANDANGOUDAR) JUDGE BKM Ct:vh List No.: 1 Sl No.: 47