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TMI Blog2019 (3) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... e under Section 138 is a company, every person, who at the time when the offence was committed was in charge of or 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. In the absence of the company being arraigned as an accused, a complaint against the appellant was therefore not maintainable. The appellant had signed the cheque as a Director of the company and for and on its behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Code of Criminal Procedure, 1973 ( CrPC ) before the High Court of Karnataka. Paragraph 6 of the petition states the ground on which the jurisdiction of the High Court was invoked. 6. The cheque was issued by one of the directors of M/s Lakshmi Cement and Industries Ltd., i.e., on behalf of said company. The said company was public limited company and in order to demonstrate the said fact, the accused herewith produces copies of the memorandum and articles of association of the company alongwith the certification of incorporation of the company and which are marked as ANNEXURE C1, C2 AND C3 respectively. In paragraph 7, the appellant averred thus:- 7. The complainant approached the learned Magistrate with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecuted without the company being named as an accused. The cheque was issued by the company and was signed by the appellant as its Director. Secondly, it was urged that the observation of the High Court that the company can now be proceeded against in the complaint is misconceived. Learned counsel submitted that the offence under Section 138 is complete only upon the issuance of a notice of demand and the failure of payment within the prescribed period. In absence of compliance with the requirements of Section 138, it is asserted, the direction of the High Court that the company could be impleaded/arraigned at this stage is erroneous. The first submission on behalf of the appellant is no longer res integra. A decision of a three Judge B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought in the drag-net on the touchstone of vicarious liability as the same has been stipulated in the provision itself . The judgment of the three Judge Bench has since been followed by a two Judge Bench of this Court in Charanjit Pal Jindal vs. L.N. Metalics (2015) 15 SCC 768 . There is merit in the second submission which has been urged on behalf of the appellant as well. The proviso to Section 138 contains the pre-conditions which must be fulfilled before an offence under the provision is made out. These conditions are; (i) presentation of the cheque to the bank within six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (ii) a demand being made in writing by the payee or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e three conditions mentioned above and enumerated under the proviso to Section 138 as clauses (a), (b) and (c) thereof that an offence under Section 138 can be said to have been committed by the person issuing the cheque. The importance of fulfilling these conditions has been adverted to in a recent judgment of a two Judge Bench of this Court in N. Harihara Krishnan vs. J. Thomas (2018) 13 SC 663 . Adverting to the ingredients of Section 138, the Court observed as follows: 26. .Obviously such complaints must contain the factual allegations constituting each of the ingredients of the offence under Section 138. Those ingredients are: (1) that a person drew a cheque on an account maintained by him with the banker; (2) that such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf. Moreover, in the absence of a notice of demand being served on the company and without compliance with the proviso to Section 138, the High Court was in error in holding that the company could now be arraigned as an accused. We, accordingly, are of the view that the High Court was in erorr in rejecting the petition under Section 482 of the CrPC. We hence allow the appeal and set aside the judgment of the High Court. In consequence, the complaint, being C.R.P No. 27/2004 shall stand quashed. During the pendency of these proceedings, this Court on 28 November 2008 recorded the statement of the appellant that he was willing to deposit the entire cheque, and hence issued the following directions: Learned counsel appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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