- Case
- MORRIES ENERGIES LIMITED THROUGH HEMANT KUMAR GARG v. ANUBHAV AGARWAL AND ANR (Bombay High Court, 26-03-2025)
- Law
- Negotiable Instruments Act, Code of Criminal Procedure, Companies Act.
Facts: Morries Energies Limited filed a complaint against several accused, including Sumit Agarwal and Anubhav Agarwal, under Section 138 of the Negotiable Instruments Act for cheque dishonor. The Metropolitan Magistrate convicted some of the accused, but the City Civil Court allowed the appeals of Sumit and Anubhav, setting aside their convictions. Morries then sought leave to appeal against these acquittals. The cheques were issued by Chamber Constructions in favor of Morries towards the discharge of liability arising out of services rendered by Morries.
Procedural Posture: This is a Criminal Application before the High Court of Bombay seeking leave to appeal against the judgment of acquittal passed by the City Civil Court in two separate criminal appeals filed by Sumit Agarwal and Anubhav Agarwal, who were originally convicted by the Metropolitan Magistrate.
Issue: Should leave to appeal be granted against the acquittal of Sumit Agarwal and Anubhav Agarwal, considering the provisions of Section 378(4) of the Code of Criminal Procedure and the principles governing vicarious liability under Section 141 of the Negotiable Instruments Act?
Holding: Leave to appeal is refused against Sumit Agarwal but granted against Anubhav Agarwal.
Reasoning: The Court found that the Additional District Judge correctly appreciated the evidence in acquitting Sumit Agarwal, as the complainant failed to sufficiently prove Sumit's complicity and responsibility in the company's affairs related to the dishonored cheques. The court emphasized that merely signing correspondence is insufficient to establish vicarious liability under Section 141 of the Negotiable Instruments Act. However, regarding Anubhav Agarwal, the Court found merit in the submissions made on behalf of Morries and determined that the Appellate Court's findings required further scrutiny, warranting the grant of leave to appeal. The court also noted that the complainant's failure to reflect the recoverable amount in income tax returns does not automatically invalidate the debt.
