High Court Acquits Director in Cheque Dishonor Case: Emphasizes Mandatory Inclusion of Company as Accused for Case Maintainability

In a significant judgment, the High Court at Calcutta has set a precedent in cases of cheque dishonor under the Negotiable Instruments Act. The Hon’ble Justice Shampa Dutt (Paul) acquitted Ravi Modi, director of Bhavyaa Global Limited, in a cheque dishonor case, emphasizing the legal necessity of including the company as an accused for the maintainability of such cases.

The case, titled Ravi Modi Vs Shashi Kant Bubna & Anr., revolved around the dishonor of a cheque issued by Mr. Modi, the director of Bhavyaa Global Limited. The High Court overturned the previous convictions by the Metropolitan Magistrate and the Additional District & Sessions Judge, which had sentenced Mr. Modi to imprisonment and imposed a compensation of Rs. 17,00,000.

In her judgment dated December 1, 2023, Justice Dutt (Paul) stated, “in the absence of the company being arraigned as an accused, a complaint against the petitioner is not maintainable.” This statement highlights the court’s adherence to the legal framework under Section 141 of the Negotiable Instruments Act, which requires the company to be included as an accused if the cheque is issued by a company director.

The court relied heavily on precedents set by the Supreme Court in cases such as Aneeta Hada vs Godfather Travels and Tours Private Limited and Himanshu -versus- B. Shivamurthy & Another. These cases underscore the imperative to arraign the concerned company in cases of cheque dishonor under Section 138 of the Negotiable Instruments Act.

Date of Decision: 1st December 2023

Ravi Modi Vs Shashi Kant Bubna & Anr.