PATEL DHAVALCHANDRA KAUSHIKCHANDRA vs STATE OF GUJARAT
- Court
- Gujarat High Court
R/CR.MA/15910/2019 (GJHC240257862019) JUDGMENT DATED:
07/09/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 15910 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE P. M. RAVAL
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Approved for Reporting Yes No
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PATEL DHAVALCHANDRA KAUSHIKCHANDRA
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR.S D MOTWANI(6681) for the Applicant(s) No. 1
ROMIL R SHAH(8433) for the Applicant(s) No. 1
MR SANJAY PRAJAPATI(3227) for the Respondent(s) No. 2
MR. KM ANTANI, APP for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE P. M. RAVAL
Date : 07/09/2026
JUDGMENT
1. The petitioner before this Court has invoked Section 482 of
the Code of Criminal Procedure, 1973, inter alia, praying for
quashing and setting aside the criminal complaint lodged by
respondent No. 2 herein, being Criminal Complaint No.
2701871/2016, filed before the Metropolitan Magistrate, Court
No. 27, at Ahmedabad, for the offence punishable under Section
138 of the NI Act, 1881.
2. The facts of the case in nutshell are to the effect that:
2.1 The complainant, i.e. respondent No. 2 herein, and the
applicant herein are childhood friends. Since the applicant
herein was in immediate need of money, he requested the
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complainant to lend him an amount of Rs. 15,00,000/-.
Accordingly, the complainant, respondent No. 2 herein, gave the
said amount to the applicant with an understanding that the
same would be returned within a period of eight months.
2.2 It is further alleged by the complainant that, after the
agreed period of eight months had expired, he requested the
applicant to return the said amount. However, the applicant kept
delaying the payment and, thereafter, issued cheque bearing
Nos. 000099 and 000100, each for an amount of Rs. 7,50,000/-,
totalling Rs. 15,00,000/-, dated 23.04.2016, drawn on HDFC
Bank, Bodakdev Branch.
2.3 It is further alleged that the applicant assured the
complainant that the said cheques would be honoured and,
accordingly, the same were presented for encashment. However,
upon being deposited for clearing, both the cheques were
dishonoured and returned with the endorsement “Stopped
Payment by Drawer”. Therefore, the complainant, through his
advocate, issued a notice to the applicant on 18.05.2016,
pursuant to which the impugned complaint came to be lodged.
Hence, the present application.
3. Learned advocate Mr. S.D. Motwani for the applicant would
submit that the complainant, by presenting a distorted version of
the facts, is wrongly harassing the applicant, as the applicant
has never taken any amount from the complainant and has
never issued any cheque to the complainant in his personal
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capacity. The cheques in question were issued by Maharsh
Unipro Pvt. Ltd. sometime in October 2014 in connection with
certain transactions between the complainant and the said
company. It is further submitted that the blank cheques were
issued as security by the said company, i.e. Maharsh Unipro Pvt.
Ltd., to the complainant. However, later on, since the transaction
was cancelled, the complainant was requested time and again to
return the blank cheques, but the complainant did not return
the said cheques. The complainant has misused the said blank
cheques and is now trying to wrongly implicate the present
applicant, for which no offence under Section 138 of the N.I. Act
is made out.
3.1 Learned advocate drew the attention of this Court towards
the reply to the notice dated 16.05.2016, on behalf of the
complainant, wherein specific averments have been made that
the complainant had misused the blank cheques in 2014, which
were issued for a bona fide transaction between c and the
complainant, and that, upon cancellation of the said bona fide
transaction, despite having repeatedly requested the
complainant to return the said undated cheques, the
complainant had misused the said cheques. Thus, it is
submitted that the said notice itself answers the issue that the
cheques were not issued by the applicant and that the amount of
Rs. 15,00,000/- was neither handed over to the present
applicant as a loan nor was it a personal transaction, but arose
out of the business transactions between the complainant and
Maharsh Unipro Pvt. Ltd.
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3.2 Thus, it is argued that when the company itself has not
been arraigned as an accused, such a complaint, without
arraigning the company as an accused, would not be
maintainable. Learned advocate has relied upon the judgment of
the Hon’ble Supreme Court in the case of Himanshu v. B.
Shivamurthy and Another, reported in (2019) 3 SCC 797 .
4. When the matter was called out learned advocate Mr.
Sanjay Prajapati for the complainant is not present.
5. The only issue which has been raised before this Court is
whether the complaint is maintainable when neither a notice has
been issued to the company nor has the company been
arraigned as an accused in the complaint lodged before the
competent Court under the provisions of Section 138 of the N.I.
Act.
6. As held by the Hon’ble Supreme Court in the case of
Himanshu (supra), when the notice of demand was served only
upon the complainant without arraigning the company as an
accused, and the accused had signed the cheque as a Director of
the company and on its behalf, under such circumstances, the
Hon’ble Supreme Court held that, in the absence of the company
being arraigned as an accused, the complaint against the
accused was not maintainable and, accordingly, quashed and set
aside the same.
7. Even for the sake of argument, if it is believed that, as
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stated by the complainant, the applicant was given an amount of
Rs. 15,00,000/- as a loan, the cheques were issued by the
applicant as an authorised signatory of Maharsh Unipro Pvt.
Ltd., for an amount of Rs. 7,50,000/- each, totalling Rs.
15,00,000/-, bearing cheque Nos. 000099 and 000100, dated
23.04.2016. If the complaint, annexed at page 19 of the petition,
is perused, it appears that only the applicant, Patel
Dhavalchandra Kaushikchandra, has been arraigned as an
accused.
8. As per the judgment of the Hon’ble Supreme Court in the
case of Aneeta Hada v. Godfather Travels & Tours (P) Ltd.,
reported in (2012) 5 SCC 661 , it has been held that the
commission of an offence by the company is an express
condition precedent to attract the vicarious liability of the other
persons, such as the Directors or employees of the company.
Thus, the words “as well as the company” appearing in the
Section make it absolutely clear that when the company can be
prosecuted, only then can the persons mentioned in the other
categories be held vicariously liable for the offence, subject to the
allegations made in the complaint and the same being proved.
9. This is because a company is a separate juristic person,
and therefore, arraigning the company as an accused is
necessary for maintaining a prosecution under Section 141 of
the N.I. Act. It is, therefore, held that it is only when the
company is held guilty of the offence under Section 138 read
with Section 141 of the N.I. Act that the other categories of
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offenders can also be proceeded against on the touchstone of the
principle of vicarious liability, as the same has been mandated
by Section 141 of the Act itself.
10. Even in the case of Aneeta Hada (supra), the company
involved was a private limited company incorporated under the
provisions of the Companies Act, 1956. In the case on hand also,
the cheque was issued by a private limited company. Though it
is averred in the complaint that the amount was handed over to
the present applicant as a friend, a specific contention has been
raised by the applicant in the reply to the statutory notice that
the said transaction was between the company and the
complainant. Even for the sake of argument, if it is assumed that
the amount was handed over to the applicant in his personal
capacity, the cheques were nevertheless issued in the name of
the company. Under the circumstances, without arraigning the
company as an accused, the complaint would not be
maintainable.
11. In the result, the present application is allowed. Criminal
Complaint No. 2701871/2016, filed before the Metropolitan
Magistrate, Court No. 27, at Ahmedabad, and all consequential
proceedings arising therefrom are hereby quashed and set aside.
Rule is made absolute accordingly.
(P. M. RAVAL, J)
MOHD SAIF ULLAH
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