Cheque Dishonour under S.138 of Negotiable Instruments Act, 1881 and Examination of Jurisdictional issues

Cheque Dishonour under S.138 of Negotiable Instruments Act, 1881 and Examination of Jurisdictional issues

Section 138 - Complaint - "Jurisdictional issue" - Who can file complaint - Scope of Interference under S.322 of Code of Criminal Procedure, 1973 -  A through his SPA authorized B to file complaint under S.138 against C, D, E and others - D&E were Directors of the Company C -  MM issued summons to accused persons D&E - D&E filed application before Magistrate to review the summoning order - Magistrate dismissed the application of accused - D&E approached High Court challenging the order of Magistrate - Held, "from the plain reading of sub clause (a) of sub section (1) of Section 322 of Code, 1973, it is evident that a magistrate can not take cognizance in the matter, if he lacks jurisdiction. For bringing a case within the ambit of section 322 of Code, the petitioner has to demonstrate that the Ld. Magistrate lacked jurisdiction or had defective jurisdiction, legal or territorial. It may be mentioned that vide present petition and even during arguments, Ld. counsel did not challenge the territorial jurisdiction or the legal jurisdiction of the Ld. Magistrate per se. The main contention of the accused persons is that as the SPA authorized the attorney to proceed only against the respondent no. 3 i.e. C and not D&E ; thus, the Ld. Magistrate could not have proceeded against them/summoned them in the complaint u/S. 138 of N.I. Act as it was filed without authority and conferred no jurisdiction on the Ld. Magistrate" This is hardly a jurisdictional issue as contemplated u/S. 322 (1)(a). Petition filed under S.482 challenging issuance of summons to Directors of accused company was dismissed. - Sanjay Shandilya v. State [2022] GCtR 1999 (Delhi)

Section 138 - SPA Holder as Complainant - SPA Holder can file complaint against a company and can implead and prosecute directors of Company. Actions of SPA holder can be ratified later by complainant. - Sanjay Shandilya v. State [2022] GCtR 1999 (Delhi)

Section 138 - Impleadment of Juristic Persons - A had filed complaint a company C - Held, C being a juristic person had to be impleaded through its directors/persons in charge responsible to the company for the conduct of its business. - Sanjay Shandilya v. State [2022] GCtR 1999 (Delhi)

Section 141 - Role of Persons in Charge of Company - "Section 141 of N. I. Act specifies that when offence u/S. 138 of N.I.Act is committed by the company, the persons in charge and responsible to the company for the conduct of its business, shall be deemed to be guilty." - Sanjay Shandilya v. State [2022] GCtR 1999 (Delhi)