Orissa High Court
Rajendra Swami vs State Of Orissa And Another …. Opp. … on 1 August, 2025
Author: Chittaranjan Dash
Bench: Chittaranjan Dash
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No. 3234 of 2017
Rajendra Swami .... Petitioner
Mr. S.S. Das, Sr. Advocate
Mr. R.K. Malick, Advocate
-versus-
State of Orissa and another .... Opp. Parties
Mrs. Siva Mohanty,
Mohanty ASC
Mr. Ashok Mohanty, Sr. Advocate
for O.P. No.2
CORAM:
THE HON'BLE
BLE MR. JUSTICE CHITTARANJAN DASH
Date of Judgment: 01.08.2025
Chittaranjan Dash, J.
1. The Petitioner, namely Rajendra Swami, Director of Right
Step Media Services Private Limited, has filed this application
challenging the legality of the order of cognizance dated 03.09.2016
passed by the learned S.D.J.M.(S), Cuttack in connection with 1CC
Case No. 746 of 2016, wherein the
the learned court took cognizance 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 30.08.2017.
30.08.
2. The background facts of the case are that the Complainant is
the proprietor of the firm, namely M/s. Fast Communication, an
INS-accredited
accredited agency engaged in the media publicity business
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MC No. 3234 of 2017 Page 1 of 13
throughout India, having its office at Markat Nagar, C.D.A.,
Cuttack.
tack. The accused is a company in the name and style of M/s.
Right Step Media Services Pvt. Ltd., represented through its
Director, Rajendra Kumar Swami, having its office near Mataji
Mandir, Soorsagar Lake, Bikaner, Rajasthan, who is also the
Director of Docoss Multimedia Private Ltd., engaged in the
business of media activation and sale of mobile handsets. Pursuant
to a mutual agreement between the parties, the said companies
appointed the Complainant, i.e., M/s. Fast Communication, as their
authorised advertisement
vertisement agency for creating and publishing
advertisements of Docoss Mobile and other media companies for a
valid period of two years from the date of publication of the first
advertisement, i.e., 27th April, 2016.
3. According to the complaint, one of the Directors, Mr.
Rajendra Swami @ Rajendra Kumar Swami, requested the
authorised staff, namely Mr. Manish Ahuja, of the Complainant
firm to publish advertisements in different newspapers circulated
throughout India. Pursuant to the release order issued by the
t said
accused, the advertisements were published in Dainik Bhaskar,
Rajasthan Patrika, Indian Express, and Dainik Bhaskar’s web portal
within the stipulated time.
time
4. The aforesaid advertisements were published at a cost of
₹88,50,000/- (Rupees Eighty-Eight
Eighty Lakhs Fifty Thousand only)
and, in discharge of the said liability, four cheques were issued,
namely:
(i) Cheque No. 874240 dated 15.06.2016 for ₹56,50,000/-
(Rupees Fifty-Six
Fifty Six Lakhs Fifty Thousand only),
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MC No. 3234 of 2017 Page 2 of 13
(ii) Cheque No. 874239 dated 05.05.2016 for ₹11,00,000/-
(Rupees
ees Eleven Lakhs only),
(iii) Cheque No. 000051 dated 10.05.2016 for ₹9,00,000/-
(Rupees Nine Lakhs only), and
(iv) Cheque No. 000052 dated 20.06.2016 for ₹12,00,000/-
(Rupees Twelve Lakhs only), totalling ₹88,50,000/-
(Rupees Eighty-Eight
Eighty Eight Lakhs Fifty Thousand only),
only)
drawn on UCO Bank, Bikaner Branch, Bikaner,
Rajasthan, in favour of the Complainant.
Complainant
5. Out of the said four cheques, two, namely Cheque No.
874239 dated 05.05.2016 for ₹11,00,000/- (Rupees Eleven Lakhs
only) and Cheque No. 000051 dated 10.05.2016 for ₹9,00,000/-
(Rupees Nine Lakhs only), amounting to ₹20,00,000/-
₹20,00,000/ (Rupees
Twenty Lakhs only), were presented before the Complainant’s bank
and honoured. However, the remaining two cheques, i.e., Cheque
No. 874240 dated 15.06.2016 for ₹56,50,000/- (Rupees Fifty-Six
Fifty
Lakhs Fifty Thousand only) and Cheque No. 000052 dated
20.06.2016 for ₹12,00,000/-
₹12,00,000/ (Rupees Twelve Lakhs only), totalling
₹68,50,000/- (Rupees Sixty-Eight
Sixty Eight Lakhs Fifty Thousand only),
when presented before the payee’s bank, i.e., IDBI Bank, CDA
Branch, Sector-9,
9, CDA, Cuttack, on 13.07.2016, were dishonoured
for the reason “Funds Insufficient”. The payee’s bank intimated the
Complainant of the dishonour vide memo dated 13.07.2016.
13.07.2016
6. Upon receipt of such intimation, the Complainant issued
two legal notices on 15.07.2016,
1 one to Docoss Multimedia Pvt.
Ltd. at Jaipur, Rajasthan, and another to Right Step Media Services
Pvt. Ltd. at Bikaner, Rajasthan,
Rajasthan in accordance with Section 138(b)
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MC No. 3234 of 2017 Page 3 of 13
of the N.I. Act, calling upon the accused companies and their
Directors to pay the
the dishonoured cheque amounts. 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 learned court, whereupon
cognizance was taken and process was issued against the Petitioner.
7. Mr. S.S. Das, learned Senior Advocate appearing for the
Petitioner, assailed the impugned order primarily on the ground that
the order dated 03.09.2016 is erroneous both in fact and in law. It
was contended
ded 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
uld 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.
462. The impugned order
was further assailed on the ground that, as per the case of the
Opposite Party No. 2, 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, in
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MC No. 3234 of 2017 Page 4 of 13
view of the aforesaid complaint before the ACMM, Jaipur, the
complaint before the S.D.J.M.(S), Cuttack lacked
lacked jurisdiction to
entertain the matter. It was also contended that the complaint
petition was not specific as to when the transaction took place so as
to confer territorial jurisdiction upon the court for the alleged
complaint. The impugned order was also
also challenged on the ground
that the authorised signatory of the Opposite Parties, having
colluded with the Opposite Parties, had already instituted a
complaint case in connection with Siprapath P.S. Case No. 466 of
2016 on the very same facts but under a different
different statute, and
therefore, the present complaint was not maintainable. Mr. Das,
learned Senior Advocate, also argued that the Petitioner was neither
a Director of Docoss Mobile at the relevant time nor was he
involved at the time of publication and placing
placing of the order or even
at the time of filing of the complaint on 10.08.2016. Hence, the
liability of Docoss Mobile at the relevant time could not attract the
offence, and the Petitioner, who at no point of time looked after the
affairs of Docoss Mobile
Mobile Company, could not be made liable for the
offence under the N.I. Act. It was further submitted that there was
no averment in the complaint indicating that the Petitioner, being a
Director, was responsible for the day-to-day
day day affairs of the company.
In the absence of such an averment, no liability could be fastened
upon him for the alleged dishonour of the cheque. Accordingly, the
cognizance of offences implicating the Petitioner was beyond
jurisdiction and, being illegal, was liable to be quashed
8. Mr. Ashok Mohanty, learned Senior Advocate appearing on
behalf of the Opposite Parties, countered the submissions advanced
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MC No. 3234 of 2017 Page 5 of 13
by the learned counsel for the Petitioner. Drawing the attention of
this Court to the factual position, he submitted that the plea of non-
non
service
ice of notice on the Petitioner is wholly false. He contended that
the Petitioner, having duly received the notice, approached the
Hon’ble Supreme Court in S.L.P. No. 3020/2018, seeking transfer
of the case from the jurisdiction of the Court at Cuttack to Bikaner.
The Hon’ble Supreme Court, having declined the said prayer,
directed the Petitioner to deposit the entire cheque amount.
Therefore, the argument advanced on behalf of the Petitioner that
no notice was served either on the companies or on the Directors
Direc
stands nullified. Mr. Mohanty further submitted that the Petitioner,
being a Director of the companies, was responsible for their day-to-
day
day affairs and was also the signatory to the cheques, making him
liable for the offence. The submission that no specific
specific averment was
made in the complaint regarding his responsibility in the day-to-day
day
affairs of the company, according to him, was made only to evade
liability. He also drew the attention of this Court to the transfer
petition filed before the Hon’ble Supreme Court by the Petitioner,
wherein he had not only corresponded as Director of Right Step
Media Services Pvt. Ltd. but had also received communications on
behalf of the said company relating to the business transactions.
The legal notice issued to the
the Petitioner clearly revealed his name
as Director of Right Step Media Services Pvt. Ltd. as well as of
Docoss Multimedia Pvt. Ltd. The averments made by the Petitioner
in the transfer petition further depicted his position as Director of
M/s. Right Step Media Services Pvt. Ltd. and M/s. Docoss
Multimedia Pvt. Ltd., as well as his authority to engage M/s. Fast
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MC No. 3234 of 2017 Page 6 of 13
Communication for publishing advertisements in different
newspapers circulated throughout India.
India
9. Having regard to the contentions of the parties as raised in
course of the hearing, the
the Petitioner has challenged the order dated
03.09.2016 primarily on the grounds that the prosecution is not
maintainable under Sections 138 and 141 of the N.I. Act without
arraying the company as an accused; that the complaint
complaint lacks any
averment showing that the Petitioner was in charge of and
responsible for the conduct of the company’s business; that no
statutory notice under Section 138 of the N.I. Act was served on the
company; and that there was no legally enforceable debt or liability
either against the Petitioner personally or against the company, the
Board of Directors having never authorised him to issue the
cheques in question
10. On consideration of the pleadings and submissions of the
parties, the challenge to the order
order of cognizance dated 03.09.2016
essentially gives rise to three issues for determination, namely:
(i) whether the prosecution under Sections 138 and 141 of the
N.I. Act is not maintainable for want of impleadment of the
company as an accused;
(ii) whether the complaint lacks necessary averments showing
that the Petitioner was in charge of and responsible for the
conduct of the company’s business and whether no statutory
notice was served as required under Section 138(b) of the
N.I. Act; andCRLMC
MC No. 3234 of 2017 Page 7 of 13
(iii) whether there was no legally enforceable debt or liability
either against the Petitioner personally or against the
company, it being contended that the Board of Directors had
never authorised him to issue the cheques in question.
These issues are examined hereinafter.
hereina
11. For Issue (i), the
he Petitioner contends that the prosecution is
not maintainable as the company, Right Step Media Services Pvt.
Ltd., has not been arrayed as an accused, and therefore, no vicarious
liability can be fastened upon him under Section 141 of the N.I.
Act. However, the record reveals that the Opposite Party has
impleaded all the Directors as parties to the complaint and has also
taken steps to implead the company itself. Even assuming there was
any initial omission, the law recognises that such
such omission is
curable and that the complainant may take steps even at a
subsequent stage to bring the company on record, so long as the
cognizance of the offence itself is based on legally sustainable
grounds. In fact, the Opposite Party has stated to have
ha already
moved to include the company as an accused, and nothing prevents
the complainant from amending the cause title even at this stage to
cure the defect, if any.
The object of Section 141 is to fasten liability upon those
who were in charge of and responsible
responsible for the conduct of the
company’s business when the offence was committed, apart from
the company itself. The materials on record indicate that the
cheques were issued and signed by the Petitioner in his capacity as
Director, and the transaction itself was initiated by him on behalf of
the company. In such circumstances, the omission to mention the
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MC No. 3234 of 2017 Page 8 of 13
company’s name in the initial cause title, when steps have already
been taken to correct it, cannot be a ground to hold the prosecution
itself as not maintainable.
m Accordingly, the contention of the
Petitioner that the prosecution is vitiated for non-impleadment
non impleadment of
the company does not merit acceptance.
12. For Issue (ii), it is argued by the Petitioner that no statutory
notice, as required under Section 138(b) of the N.I. Act, was served
either upon the company or upon the Petitioner personally,
personally and that
the complaint does not contain specific averments as to how he was
in charge of andd responsible for the conduct of the business of the
company at the relevant time.
These submissions, however, do not hold good on the facts
of the present case. The complaint attributes to the Petitioner the
initiation of the agreement with the complainant
complainant and issuance of
cheques in his capacity as Director. The record reveals that on
19.04.2016, the Petitioner, in his capacity as Director, initiated the
business arrangement with the complainant for the purpose of
media advertisements and issued cheques towards
towards discharge of the
agreed liability, including cheque no. 874240 dated 15.06.2016.
These cheques were dishonoured on 13.07.2016 for insufficiency of
funds. Though the Petitioner has placed reliance on his resignation
from the Directorship of Docoss Multimedia
Multimedia Pvt. Ltd. on
06.07.2016, such resignation came after he had already executed the
agreement and issued the cheques on behalf of the company. The
cause of action, therefore, flows from acts undertaken by him while
holding office as Director, and he cannot
cannot be absolved of liability
merely by subsequently resigning.
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MC No. 3234 of 2017 Page 9 of 13
13. More importantly, in the transfer petition filed before the
Hon’ble Supreme Court seeking transfer of the present complaint
from Cuttack to Bikaner, the Petitioner himself admitted his status
as Director and acknowledged receipt of statutory notices. In
paragraph (v) of the said petition, the Petitioner categorically stated
as follows:
“The Respondent after return of the cheques, through
his advocate, issued two legal notices by registered
postt to one M/s Docoss Multimedia Pvt. Ltd. at Jaipur,
Rajasthan and another to M/s Right Step Media
Services Pvt. Ltd. office situated at Bikaner, Rajasthan,
in accordance with the provision under Section 138(b)
of Negotiable Instruments Act, 1881 with regard
regar to the
above mentioned dishonour of the cheques. The legal
notices issued by the Respondent were received by the
Petitioner herein. True copy of legal notices dated
14.07.2016, which was filed is annexed herewith and
marked as Annexure – P5 (pages 18 to 19).”
Thus, the plea that no statutory notice under Section 138(b)
of the N.I. Act was served upon either the company or the Petitioner
personally stands answered by the Petitioner’s own admission on
oath before the Hon’ble Supreme Court.
14. Under Section 58 of the Indian Evidence Act, 1872, facts
admitted need not be proved.
proved The admissions made by the
Petitioner in the transfer petition were voluntary, supported by
affidavit, and made on oath before a competent court of law. Such
admissions dispense with the need for further proof and can
legitimately be relied upon by this Court while considering the
legality of the order of cognizance. An accused who, in proceedings
before a competent court, acknowledges his status in relation to a
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MC No. 3234 of 2017 Page 10 of 13
company and his knowledge of a complaint filed against him,
cannot subsequently plead ignorance of notice or deny such status
in a proceeding arising out of the same transaction. These
admissions, having been made consciously and on oath, carry
significant evidentiary value and must
must be accepted as binding
against the maker unless shown to be erroneous or withdrawn,
which is not the case here.
Accordingly, these undisputed admissions, when read with
the complaint’s specific reference to the Petitioner’s role in
initiating the agreement and issuing the cheques, prima facie satisfy
the statutory requirement under Section 141 of the N.I. Act that he
was a person in charge of and responsible for the conduct of the
business of the company in relation to the transaction in question.
15. For Issue (iii), the Petitioner contends that there was no
legally enforceable debt or liability and that the cheques were
issued merely as security, without any authority from the Board of
Directors to bind the company. It is further urged that a civil dispute
di
between the parties is already pending, which, according to the
Petitioner, renders the criminal prosecution unsustainable.
These arguments are primarily matters of defence which
raise disputed questions of fact, requiring appreciation of evidence.
The
he complaint specifically alleges that the cheques were issued in
discharge of liability arising from the business transaction initiated
by the Petitioner himself on behalf of the company. The allegation
that the cheques were issued only as security is not borne out from
the complaint or the admitted documents but is a defence that can
only be adjudicated at trial. Similarly, whether the Board of
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MC No. 3234 of 2017 Page 11 of 13
Directors authorised the Petitioner or whether the cheques were
issued beyond his authority are also issues of evidence,
evidence, which
cannot be conclusively determined at this stage.
Even assuming that a civil dispute is pending between the
parties, it is well settled that the existence of a civil remedy does not
bar prosecution under Section 138 of the N.I. Act, which creates
cre a
distinct statutory offence for dishonour of cheques. The criminal
liability under Section 138 is independent of civil proceedings and
is intended to enhance the credibility of commercial transactions.
Therefore, these contentions cannot be grounds for
f quashing
the order of cognizance in exercise of jurisdiction under Section
482 Cr.P.C. and must be left to be determined in the course of trial
on the basis of evidence adduced by the parties.
16. The Petitioner also seeks to question the validity of
cognizance
ance on the ground that no statutory notice under Section
138(b) of the N.I. Act was served upon either the company or the
Petitioner personally. This plea also stands answered by the
Petitioner’s own conduct in approaching the Hon’ble Supreme
Court seekingg transfer of the complaint from Cuttack to Bikaner,
which unequivocally demonstrates his knowledge of the complaint
and the transaction giving rise to it. Once actual knowledge is
established, the technical objection regarding notice loses its force,
particularly
icularly when the Petitioner, instead of disputing receipt of
intimation, actively sought transfer of the case itself.
17. To summarise, the
t plea of non-impleadment
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
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MC No. 3234 of 2017 Page 12 of 13
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
ispense 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.
18. 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.
19. For the reasons as above, this Court is not convinced to
interfere with the order of cognizance in exercise of jurisdiction
under Section 482 Cr.P.C.
20. Accordingly, the
t CRLMC stands dismissed.
sed. Pending
applications, if any, are also disposed of.
(Chittaranjan Dash)
Judge
Bijay
Signature Not Verified
Digitally Signed
Signed by: BIJAY KETAN SAHOO
Reason: Authentication
Location: HIGH COURT OF ORISSA
Date: 05-Aug-2025 11:18:12
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