Cuttack: The Orissa High Court has rejected the petition by a Rajasthan-based multimedia firm challenging an NBW ordered against its director by a lower court in a cheque bounce case against it.
A bench of Justice Chittaranjan Dash, in a recent order, dismissed the petition filed by the director of the firm Rajendra Swami and held that the Court is not convinced to interfere with the order of cognisance.
Petitioner Rajendra Swami, director of Right Step Media Services Private Limited, had filed the application challenging the legality of the order of cognisance dated September 3, 2016, passed by the SDJM(S), Cuttack. The court had taken cognisance of the offence under Section 138 of the N.I. Act and directed the petitioner to appear and answer the accusation, initially by issuance of a bailable warrant and subsequently by issuance of an N.B.W. vide order dated August 30, 2017.
The complainant is the proprietor of M/s. Fast Communication, an INS-accredited accredited agency engaged in media publicity business across India, having its office at Markat Nagar, Cuttack.
M/s. Right Step Media Services Pvt Ltd, represented through its director, Rajendra Kumar Swami, having its office at Bikaner, Rajasthan, is also the Director of Docoss Multimedia Private Ltd, engaged in the business of media activation and sale of mobile handsets.
These companies appointed Fast Communication as their authorised advertisement agency for creating and publishing advertisements of Docoss Mobile and other media companies for two years from the date of publication of the first advertisement, i.e., April 27, 2016.
According to the complaint, Swami requested the authorised staff of the complainant firm to publish advertisements in different newspapers circulated throughout India. Pursuant to the release order issued by the accused, the advertisements were published in Dainik Bhaskar, Rajasthan Patrika, Indian Express, and Dainik Bhaskar’s web portal within the stipulated time.
The advertisements were published at a cost of Rs 88,50,000/-. In discharge of the said liability, four cheques were issued, of which only two amounting to Rs 20,00,000/- were honoured by the complainant’s bank. However, the remaining two cheques totalling Rs 68,50,000/-, when presented before the payee’s bank, were dishonoured for the reason “Funds Insufficient”.
Upon receipt of intimation, the complainant issued two legal notices to Docoss Multimedia Pvt Ltd at Jaipur, Rajasthan, and to Right Step Media Services Pvt Ltd at Bikaner, Rajasthan.
However, neither the companies nor the directors replied to the legal notices nor made payment of the dishonoured cheque amounts, for which the complainant filed a complaint before the court, whereupon cognisance was taken and process was issued against the Petitioner.
Senior Advocate S S Dash appearing for the petitioner assailed the impugned order on the ground that the order dated 03.09.2016 is erroneous both in fact and in law. It was contended that the complaint, while arraying the petitioner under Section 141 of the N.I. Act, did not implead the company as an accused and, in the absence of the company, no vicarious liability could be fastened on the petitioner. Consequently, the director could not have been held liable for the offence under Section 138 read with Section 141 of the N.I. Act. It was further contended that in the case of a private limited company, the director has only limited liability and acts on behalf of the company, and therefore, therefore, in the absence of the company as a party, the entire proceeding stood vitiated and was liable to be quashed in view of the decision in D.J. Rastogi v. State of U.P. & Another reported in 2014 (1) Civil Law Journal 462.
The impugned order was further assailed on the ground that the cheque was issued in Bikaner, the entire transaction took place in Jaipur and Bikaner, the agreement was executed in Bikaner, Docoss Company was situated in Jaipur, and Right Step Company was in Bikaner. Consequently, a complaint was already filed before the learned ACMM, Jaipur. Therefore, the complaint before the SDJM(S), Cuttack lacked jurisdiction to entertain the matter.
The High Court, however, held that the plea of non-impleadment of the company is not tenable in view of the steps already taken by the complainant and the curable able nature of such omission. The contentions regarding absence of averments and want of statutory notice stand answered by the petitioner’s own admissions made on oath before the Hon’ble Supreme Court, which, under Section 58 of the Indian Evidence Act, dispense with the need for further proof. The plea of absence of legally enforceable liability or of issuance of cheques as security, as well as the pendency of civil proceedings, are all matters of defence raising disputed questions of fact which cannot be gone into at this stage and must be left to be determined at trial.
“In view of the foregoing discussion on all three issues, this Court finds no illegality, impropriety or perversity in the order dated 03.09.2016 taking cognizance of the offence under Section 138 of the Negotiable Instruments Act against the Petitioner,” the HC stated in its order of August 1.
For the reasons as above, this Court is not convinced to interfere with the order of cognisance in exercise of jurisdiction under Section 482 Cr.P.C and accordingly, the petition stands dismissed, the order said.