Page 1 IN THE HIGH COURT OF ORISSA AT CUTTACK CRLMC No. 344 of 2026 along with CRLMC No. 346 of 2026 (In the matter of an application under Section 482 of Criminal Procedure Code, 1973 corresponding to Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023). Nigam Institute of Engineering and Technology (In both the cases) …. Petitioner(s) -versus- Sadhu Charan Palei …. Opposite Party (s) Advocates appeared in the case through Hybrid Mode: For Petitioner(s) : Mr. Amit Prasad Bose, Advocate. For Opposite Party (s) : Mr. Ramesh Chandra Nayak, Advocate CORAM: DR. JUSTICE SANJEEB K PANIGRAHI DATE OF HEARING:-05.03.2026 DATE OF JUDGMENT:-13.03.2026 Dr. Sanjeeb K Panigrahi, J. 1. The same Petitioner in both the CRLMCs has instituted the present Criminal Miscellaneous Case under Section 482 of the Code of Criminal Procedure, 1973/ Section 528 of Bharatiya Nagarik Suraksha Sanhita, 2023, invoking the inherent jurisdiction of this Court. The present application has been filed challenging the order of cognizance dated 06.12.2025 passed by the learned Nayadhikari, Gram Nayalaya, Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 2 Puri in ICC Case No. 16/2025 and 17/2025, whereby cognizance has been taken for the alleged offences under Section 138 of Negotiable Instrument Act. I. FACTUAL MATRIX OF THE CASE: 2. The brief facts of the case are as follows: (i) The case of the Petitioner, in brief, is that he had purchased two parcels of land, owing to a shortage of funds at the relevant time, requested the Complainant to extend a friendly loan of Rs. 20,00.000/- with an assurance to repay the said amount within a period of one month. (ii) Thereafter, when the Petitioner failed to repay the loan within the stipulated time, he issued a cheque bearing No. 000107 drawn on ICICI Bank, Baramunda Branch, for an amount of Rs. 20,00,000/-. The said cheque was issued for encashment from the account maintained in the name of Nigam Engineering of Technology, bearing the seal and signature of the Petitioner in his capacity as the Managing Director and Chairman of the said institution. (iii) Pursuant to the said request, the Opp. Party presented the aforesaid cheque for encashment by depositing the same in his account in S.B.I., Chandanpur Branch, Puri. However, the cheque was returned unpaid by the band with the endorsement “funds insufficient”. Consequently, the Opp. Party instituted a complaint case in respect of the said dishonour. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 3 (iv) It is further stated that the learned Trial Court has taken cognizance against the Petitioner in his individual capacity, notwithstanding the fact that the cheque in question was issued by him in his capacity as the Managing Director and Chairman of the Institution. (v) Thereafter, the Opp. Party filed the present ICC Case on 30.07.2025, subsequent to reciving summons in the complaint case bearing ICC No. 2215 of 2025, which had earlier been instituted on 16.04.2025 before the learned J.M.F.C.-II, Bhubaneswar. (vi) It is further stated that a complaint case has also been instituted against the Opp. Party has filed under Sections 420, 318, 115(2), 126, 336, 351, 109, 296, 393, 303(3) of the I.P.C. , in which statement of the complainant has been recorded in accordance with the law. (vii) The impugned complaints, cognizance has been taken in ICC Case No. 16 of 2025 and 17 of 2025 against the present Petitioner. The Petitioner contends that the said proceedings are not maintainable in law, inasmuch as the cheque in question was issued by him in his capacity as the Chairman and Managing Director of the Institution and not in his individual capacity. Being aggrieved by the aforesaid facts and circumstances, the Petitioner has been constrained to approach this Court by filing the present CRLMC Application seeking appropriate relief in accordance with law. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 4 II. SUBMISSIONS ON BEHALF OF THE PETITIONER: 3. The learned counsel for the Petitioner respectfully and earnestly made the following submissions in support of his contentions: (i) The Petitioner submits that the present petition arises out of the allegations levelled against him in connection with the ICC Case No. 16/ 2025 and 17/2025. It is contended that the impugned proceedings were instituted on the basis of the said alleged allegations. The Petitioner, inter alia, challenges the order of cognizance dated 06.12.2025, passed by the Gram Nyayalaya, Puri, whereby cognizance of the alleged offences was taken. (ii) The Petitioner further submits that the cheque in question was issued from the account of ICICI Bank, Barmunda Branch in the name of Nigam Institute of Engineering and Technology, bearing the seal and signature of the Managing Director. It is contended that the Complaint case is not maintainable in the present form, as the Institute itself has not been made a party to the proceedings. (iii) The Petitioner contends that, in terms of Section 141 of N.I. Act, 1881, both the company and the person responsible for the company are liable to be proceeded against jointly. In the present case, since the Institution has not been made a party to the proceedings, the person in charge of the Institution cannot, in his individual capacity, be held personally liable. (iv) The Petitioner further contends that the judgments relied upon by the Opp. Party are not applicable in the present case, as it is Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 5 undisputed that the institution has not been made a party ot the Complaint. Consequently, the proceedings initiated against the Petitioner are liable to be quashed. (v) The Petitioner further submits that, if the criminal proceedings are allowed to continue, he will be subjected to undue mental agony and harassment. Finding no expeditious remedy available, the Petitioner is constrained to challenge the order of cognizance dated 06.12.2025, passed by the Gram Nyayalaya, Puri. III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES: 4. Per contra, the learned counsel for the Opposite Parties earnestly made the submission that the present CRLMC is not maintainable before this Court and deserves to be rejected in limine. (i) The Opp. Parties submits that, as a preliminary objection, the present petition is not maintainable. It is contended that the Petitioner is not the Institution and, therefore, is not an accused in Complaint Case No. 16/2025 and 17/2025. Being a third party who is neither an accused nor has suffered any legal injury, the Petitioner has no locus standi to invoke the inherent jurisdiction of this Court for quashing of criminal proceedings. (ii) The Opp. Party further submits that, on account of non- paymnet, the Complaint Case was filed under Section 138 of the N.I. Act. It is contended that the Complainant clearly discloses all statutory ingredients of the alleged offence. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 6 (iii) The Opp. Party submits that the alleged offence is primarily committed by the Company and Directors are sought to be prosecuted by virtue of Section 141 of N.I. Act, on the basis of vicarious liability. (iv) It further submits that the Institution neither incurred the debt nor derived any benefit from the transaction. Consequently, the Institution cannot be regarded as the primary offender. It is contended that the Petitioner alone incurred the liability and issued the cheque, allegedly misusing the corporate protection. Hence, Section 141 of the act cannot be invoked against the Petitioner. (v) The Opp. Party further contends that the Petitioner signed the cheque as the sole authority and operator, and issued in its discharge of his personal liability. Whether the Petitioner misused the funds or not, is a matter between him and the institution but such dispute does not absolve him liability under Section 138 of N.I. Act. (vi) The Opp. Party further submits that the Complaint, on its face, discloses all the essential ingredients of Section 138 of N.I. Act. It is contended that the Petitioner has not disputed either the existence of debt or the issuance of cheque in discharge of his personal liability. (vii) The Opp. Party submits that the underlying transaction pertains to the personal purchase of land by the Petitioner, and the liability arising therefrom is personal in nature, making the Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 7 Petitioner the primary debtor. It is contended that merely because the cheque was drawn on the account of the institution, where the Petitioner holds the position of Chairman and Managing Director, he cannot, ipso facto, be absolved of criminal liability. IV. COURT’S REASONING AND ANALYSIS: 5. Heard Learned Counsel for parties and perused the documents placed before this Court. 6. In light of the foregoing facts and circumstances of the case, this Court is of the considered view that the under the Negotiable Instrument Act, the liability under Section 138 of the Act is primarily fastened upon the drawer of the cheque. It is a well-settled principle of law that a company or institution, being a juristic person, acts through its authorized representatives, and the authorized signatory merely signs the cheque on behalf of such entity. The doctrine of separate corporate personality mandates that the institution itself remains the drawer of the cheque, and not the individual who signs it in an official capacity. therefore, the liability, if any, must primarily attach to the institution as the drawer of the cheque, unless specific statutory conditions exist to fasten vicarious liability upon other persons connected with the affairs of the institution. 7. Section 138 of the N.I. Act finds place in Chapter XVII of the Act, which has been specifically incorporated to provide for penalties in cases involving the dishonour of cheques on account of insufficiency of funds or where the amount exceeds the arrangement made with the Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 8 bank. The legislative intent underlying the said provision is to enhance the credibility of commercial transactions and to instill confidence in the efficiency of banking operations by attaching penal consequences to the failure of honouring duly issued cheques. 8. The Supreme Court has authoritatively elucidated the essential ingredients required to constitute an offence Section 138 of N.I. Act in Kusum Ingots & Alooys Ltd. v. Pennar Paterson Securities Ltd. & Ors,1, wherein it has been held that: “10. On reading of the provision of Section 138 of the N.I. Act it is clear that the ingredients which are to be satisfied for making out a case under the provision are: (i) A person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability; (ii) That cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (iii) That cheque is returned by the bank unpaid, wither because the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank; (iv) The payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; 1 (2000) 2 SCC 745 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 9 (v) The drawer of such cheque fails to make payment of the said amount to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.” 9. In the case at hand, the cheque in question was admittedly signed by the Petitioner in his capacity as the Chairman and Managing Director of the Institution, and not in his personal and individual capacity. Thus, the act of signing the cheque was undertaken in a representative capacity, signifying the liability of the institution as the drawer, rather than that of the Petitioner in his individual capacity. 10. Further in the case of Jugesh Sehgal v. Shamsher Singh,2, the Supreme Court laid significant emphasis on the foundational requirement that, for an offence under Section 138 of the Negotiable Instrument Act to be made out, the dishonoured cheque must have been drawn by the accused on an account maintained in his own name and held that: “22. As already noted hereinbefore, in Para 3 of the complaint, there is a clear averment that the cheque in question was issued from an account which was non- existent on the day it was issued or that the account from where the cheque was issued “pertained to someone else”. As per the complainant’s own pleadings, the bank account from where the cheque had been issued, was not held in the name of the appellant and therefore, one of the requisite ingredients of Section 138 of the Act as not satisfied. Under the circumstances, continuance of further proceedings in the complaint under Section 138 of the Act against the appellant would be an abuse of the process of the Court… ” 2 (2000) 2 SCC 745 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 10 11. As per the legislative scheme underlying Section 138 of the N.I. Act, it is primarily the drawer of the cheque who is sought to be made liable for the offence contemplated therein. The statutory framework clearly postulates that criminal liability is attracted upon the person or entity in whose name the account is maintained and from which the cheque is issued. 12. In the instant case, the Chairman and Managing Director of the Institution have signed and issued the cheque in his capacity as an authorized signatory, acting on behalf of the institution and in furtherance of its affairs. The issuance of the cheque, therefore, cannot be construed as an act undertaken in his personal or individual capacity. Consequently, upon dishonour of the said cheque, the liability, if any, would attach to the institution as the drawer of the cheque, and not to the Chairman and Managing Director in his individual capacity, save and except in circumstances where the statutory requirements for fastening vicarious liability are duly satisfied. 13. Even assuming, arguendo, that the cheque in question had been issued towards the discharge of a personal liability of the accused in favour of the Complainant, had the Nigam Institute of Engineering has been arraigned as an accused in the complaint case before the learned Trial Court, it would have remained open to the Complainant to establish with the aid of the statutory presumption under Section 139 of the N.I Act, that the cheque issued on behalf of the institution was in discharge of a legally enforceable debt or liability. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 11 14. However, in the absence of the drawer of the cheque, namely the said institution, being impleaded as an accused, the prosecution could have been validly sustained against the accused in his personal capacity alone. The statutory scheme mandates that the primary liability rests upon the drawer, and any vicarious liability of persons in charge of and responsible for the conduct of the business of the company can be invoked only by virtue of Section 141 of the N.I. Act. Such vicarious liability, however, is contingent upon the company itself being arraigned as an accused. In the absence thereof, fastening criminal liability upon the accused in his individual capacity would be legally untenable and contrary to the settled position of law. 15. The liability under Section 138 of the N.I. Act cannot be mechanically extended to individuals who merely cat as authorized signatories, unless the statutory prerequisites embodied under Section 141 are duly satisfied. This Court is of the considered view that vicarious liability, as engrafted under Section 141, predicates that the company or institution must be prosecuted as the principal offender, being the drawer of the cheque. 16. In the absence of the company having been arraigned as an accused, the prosecution against its directors or authorized signatories alone is rendered legally unsustainable. Consequently, no criminal lability can be fastened upon such individuals in their personal capacity, unless the foundational requirement of impleading the company as an accused is fulfilled, in consonance with the settled principles governing vicarious liability under the Act. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 12 17. Moreover, it is the drawer Institution which is required to be treated as the principal offender under Section 138 of the N.I. Act, before culpability can be extended, by way of a legal fiction, to the Directors or other persons who are in charge of and responsible for the conduct of the business of the Company. The statutory scheme clearly postulates that such vicarious liability is contingent upon the primary liability of the drawer itself. In the absence of fastening liability upon the drawer institution, there arises no occasion to invoke the provisions of vicarious liability against the other individuals connected with the affairs of the company. Consequently, unless the drawer institution is prosecuted and held liable in the first instance, the question of extending criminal liability to its directors or persons in charge does not arise, rendering such prosecution legally unsustainable under the Act. 18. The Court is of the considered view that the identity of the drawer of the cheque is evident and discernible from the cheque itself, and therefore, it was always open to the Complainant to take appropriate steps for impleadment of the company, being the drawer of the cheque, as an accused in the complaint proceedings. It is further well- settled that an offence under Section 138 of the N.I. Act is essentially person-specific, fastening liability primarily upon the drawer of the cheque. In the absence of adherence to the statutory scheme, and dehors the applicability of general principles under the CrPC, the learned Magistrate could not have validly taken cognizance of the complainant without the drawer who can be prosecuted for the Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 13 offence under Section 138, the omission to implead the company strikes at the very root of the maintainability of the complaint, rendering the proceedings unsustainable in the eye of law. 19. It is borne out from the record that, in the case at hand, the accused had allegedly borrowed a sum of money from the Complainant in connection with the purchase of a plot for his son. upon demand, a cheque came to be issued in the name of the institution for the purpose of encashment; however, the same was subsequently dishonoured upon presentation. 20. Be that as it may, it is now well-settled by a catena of authoritative pronouncements of the Supreme Court that where a cheque is issued on behalf of a company or institution by its authorized signatory, the prosecution cannot be validly maintained against such authorized signatory or other office bearers of the company, as contemplated under the Act, unless the company itself- being the drawer of the cheque, is arraigned as an accused in the complaint case instituted before the learned Magistrate. The failure to implead the principal offender, namely the drawer company, vitiates the very substratum of the prosecution and renders the proceedings legally untenable. 21. In the absence of the drawer of the cheque having been arraigned as an accused, it manifests that no prosecution could have validly proceeded against the accused in his personal capacity. The legal position in this regard stands no longer res integra, having been authoratively settled by the Supreme Court in Aneeta Hada v. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 14 Godfather Travels and Tours Private Limited,3, wherein it has been held that: “58. Applying the doctrine of the strict construction, we are of the considered opinion that commission of 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 absolutely 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 of the fact that the company is a juristic person and it has its own 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 indicated.” 22. The aforesaid general rule is also informed by the well-recognized legal maxim Lex non cogit ad impossibilia, signifying that the law does not compel a person to do that which is impossible. However, in the fats of the present case, the said principle does not come to the aid of the Complainant so as to sustain the prosecution. Rather, it fortifies the conclusion that the complaint is liable to be quashed, inasmuch as the Chairman and Managing Director of the company has been arrayed as the sole accused for the dishonour of a cheque drawn on an account maintained in the name of the company. 23. This Court if of the considered view that the settled and fundamental principles of criminal jurisprudence, as well as the statutory mandate under the Negotiable Instrument Act, must govern the field. In the 3 (2012) 5 SCC 661 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 15 absence of the company, being the drawer of the cheque, having been arraigned as an accused, the prosecution against the individual alone cannot be sustained as an accused, the prosecution against the individual alone cannot be sustained, rendering the continuation of such proceedings an abuse of the process of law. 24. This Court is of the considered view that, in the absence of any cogent and convincing material to justify the non-impleadment of the institution, being the drawer of the cheque, in the present proceedings, fastening liability solely upon the individual in his personal capacity is impermissible in the eye of law. Such an approach stands expressly proscribed by the scheme of the Negotiable Instruments Act, as well as by a plethora of authoritative pronouncements of the Supreme Court. Consequently, the prosecution, having been instituted in derogation of the settled legal principles governing liability under Section 138 and 141 of the Act, cannot be sustained. Accordingly, the complaint case is liable to be quashed, as it continuance would amount to a manifest abuse of the process of law. V. CONCLUSION: 25. In view of the foregoing analysis, and upon meticulous and consideration of the material facts and circumstances of the case, this Court is of the considered opinion that the continuance of the impugned proceedings cannot be sustained in the eye of law. Accordingly, the ICC Case No. 16 of 2025 and 17 of 2025, along with all consequential criminal proceedings emanating therefrom, are liable Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 23-Mar-2026 11:57:44 Signature Not Verified Page 16 to be quashed and set aside. Consequently, this Court is inclined to accede to the relief sought for by the Petitioner, and the same is thereby granted. 26. Accordingly, both the CRLMCs stand allowed. 27. Interim order, if any, passed earlier stands vacated. (Dr. Sanjeeb K Panigrahi) Judge Orissa High Court, Cuttack, Dated 13th March, 2026/ CUTTACK