M/s. Uttam Biotech Pvt. Ltd & Ors. v. Mrs. Jyoti Dilip Pawar & Anr.
Case at a glance
Provisions considered
Judgment
Mr. Subhash Jha i/b. M/s. Law Global Mr. D.R. More, APP for the State. Mr. Shailesh Kantharia for Respondent No.1. for the Applicant. CORAM : K.U. CHANDIWAL, J. DATED : 06th DECEMBER 2012. P.C. :- Heard.
The Applicants question issuance of process for an offence under Section 138 of Negotiable Instruments Act by the learned Metropolitan Magistrate on the sole ground that the Applicants, under circumstances were prevented from honoring the cheque which was presented for encashment on 10th June 2010 as Bank Accounts were blocked by the Income Tax Authorities effective from 18th February 2010. The status remained the same as on 15th June 2011 when the letter by the Oriental Bank of Commerce was addressed to the Applicants. 2 APL 2.12.sxw
The learned Counsel, in order to stress his point has placed reliance to the Judgment in the matter of Vijay Chaudhary V/s. Gyan Chand Jain, reported in 2008 (2) DCR 685 and of this Court in the matter of Ashish Parikh V/s. State of Maharashtra reported in 2011(3) Bom. C.R. (Cri.) 380.
In the first case the accused projected that it was a post dated cheque and could not have been presented as the Complainant was aware of the situation of blockage of the account due to operation stopped by the Court. It was indicated, by order of the Court, the Bank was necessarily required not to make any payment out of the account of the Accused and it is therefore, unjust and illegal to say that an employee of the Company had issued the cheque on behalf of the Accused/Company should be held liable for an offence under Section 138 of Negotiable Instruments Act. The legal position was also considered as appeared in the matter of M/s. Modi Cements Ltd. v/s. Kuchil Kumar Nandi reported in IR 1998 SC 1057.
In the matter of Ashish Parikh (supra), the account was freezed by crime branch and the payment could not be released by the drawer of the cheque on its presentation. The acquittal recorded by the learned Metropolitan Magistrate was held justified.
The scales of above reported Judgments, cannot be 3 APL 2.12.sxw applied to the facts in the present case. The cheques as could be seen from the complaint was dated 5th June 2010, while as per the assertions of the Applicant himself, the account was frozen on 18th February 2010. There was no justification for the Applicant to have issued a cheque of the account where he was cautious of blockage. There could not be any operation or honor to the cheque. That apart, had the Applicant bonafides, he could have maintained sufficient funds in the account, in case such blockage of account is raised by the Income Tax Authorities to ensure honoring the subject cheque. There is nothing the Applicant was showing his honesty to honour the transaction.
After the communication from the Bank, for reasons of funds insufficient and account blocked, informed by the Bankers Memo dated 15.06.2010, a statutory notice was served upon the Applicant dated 26.06.2010 through the Advocate. The notices returned with endorsement not claimed. It is thus obvious, the Applicants were alive of even issuance of statutory notices as in few notice it is endorsed premises closed. Against the Applicant, inspite of such communication required under the statute, did not honor compliance as is expected under Section 138 of Negotiable Instruments Act. There was no impediment for the Applicant not to release the payment even if the account was blocked by Income Tax Authorities by issuing pay orders, after statutory notice. A smoke screen is tried to be created by the Applicant taking lame excuse to a letter issued by the Bank. 4 APL 2.12.sxw One does not know at this stage whether such blockage was indeed created by the Income Tax Authorities. The Applicant desires to coin letter, which is a matter of evidence.
By way of amendment, the Applicant has canvassed that the cheques were blocked. However, this cannot be considered at this stage of the matter. The Application lacks merit. Dismissed. All rights between the parties are kept open. The observations are prima-facie in nature.
Questions this judgment answers
Which statutory provisions did this judgment involve?
Negotiable Instruments Act, 1881 — s. 138.
Which court decided this case, and when?
Bombay High Court, on 06 Dec 2012. The bench was K U CHANDIWAL.
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.