Mrs.Gayathri v. S.R.Jayaraman

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 05.08.2009C O R A MTHE HONOURABLE MR.JUSTICE P.R.SHIVAKUMAR Crl.O.P.No.30012 of 2008Mrs.Gayathri...Petitioner Vs.S.R.Jayaraman...RespondentThis Criminal Original Petition has been filed under Section483 r/w 482 Cr.P.C to call for the records in C.C.No.6096/2004 onthe file of the XVIII Metropolitan Magistrate, Saidapet, Chennaiand to quash the same.For Petitioner: Mr.R.Shivakumar for M/s.La LawFor Respondent : Mr.D.S.RameshO R D E RThe accused in C.C.No.6096/2004, which is pending on the fileof the VIII Metropolitan Magistrate, Saidapet, Chennai is thepetitioner herein. The above said calendar case was instituted bythe respondent herein on a private complaint for an alleged offencepunishable under Section 138 of the Negotiable Instruments Act,1881 against one Rajamani, the father of the petitioner herein andthe petitioner herein. The father of the petitioner herein and thepetitioner herein have been arraigned as accused Nos.1 and 2respectively. Contending that the complaint as against thepetitioner herein is not maintainable in law, the petitioner herein(A2), has come forward with the present petition under Section 482Cr.P.C to quash the above said criminal proceedings so far as thepetitioner herein (A2) is concerned.2. The arguments advanced by Mr.R.Shivakumar representingM/s.La Law, learned counsel for the petitioner/accused and byMr.D.S.Ramesh, learned counsel for the respondent/complainant wereheard. The materials produced in the form of typed set of paperswere also perused.3. It is the contention of the learned counsel for thepetitioner that the complaint against the petitioner herein is notmaintainable and hence liable to be quashed since the petitionerwas not the drawer of the cheque for the dishonour of which thecomplaint has been preferred. On the other hand, it is contended https://hcservices.ecourts.gov.in/hcservices/ on behalf of the respondent/complainant that though the cheque wasissued by Rajamani, the father of the petitioner herein, he issuedthe said cheque as the kartha of the Hindu Undivided Family ofwhich the petitioner was also a member and that hence thepetitioner should be construed to be a drawer of the cheque.4. As per the contents of the complaint, it is the contentionof the complainant that the petitioner and her father made therespondent/complainant believe that they were capable of getting anadmission in a medical college at Bangalore for the son of therespondent/complainant; that coming to know that therespondent/complainant had money to pay for medical admission underpayment quota, the petitioner and her father (A2 and A1) approachedthe respondent/complainant and requested for providing a loan ofRs.6,00,000/- to settle a family dispute in the petitioner'sfamily; that both the petitioner and her father promised to settlethe amount within a month; that believing such promise, therespondent/complainant lent them a sum of Rs.6,00,000/-; that thepetitioner and her father (A2 and A1) later on failed to repay thesaid amount; that after the respondent/complainant persuaded themto repay the amount, the father of the petitioner (A1) issued twocheques bearing cheque Nos.204803 and 204804 for the sums ofRs.2,50,000/- and Rs.3,50,000/- respectively dated 09.02.2004 and24.02.2004 respectively; that when the cheques were presented forencashment, they were returned unpaid for insufficiency of fundsand the banker's intimation ws received on 30.06.2004; that thereafter a statutory notice was issued on 10.07.2004 demanding paymentof the cheque amount, namely Rs.6,00,000/-; that though the noticewas received by the first accused, he did not comply with thedemand made in the notice and that hence the respondent/complainantwas constrained to prefer the complaint before the learned XVIIIMetropolitan Magistrate, Saidapet, Chennai for an alleged offencepunishable under Section 138 of the Negotiable Instruments Act,1881 against the father of the petitioner and the petitionershowing them as accused No.1 and 2 respectively. 5. The averments made in the complaint are to the effect thatthough the father of the petitioner and the petitioner hereinjointly borrowed a sum of Rs.6,00,000/- from therespondent/complainant, the chques in question were issued by A1,the father of the petitioner herein alone. It is not the case ofthe respondent/complainant that the cheque was issued in respect ofan account jointly maintained by the petitioner herein and herfather. On the other hand, there is nothing in the complaint toshow how the petitioner herein was sought to be made responsiblefor the dishonour of the cheque. The complaint has been drafted insuch a way to see that there is no clear-cut allegation as to howthe petitioner herein/A2 is liable to be prosecuted for the offenceunder Section 138 of the Negotiable Instruments Act, 1881. 6. As pointed out supra, admittedly, the cheques were issuedby the first accused, namely the father of the petitioner herein.The petitioner is not shown to be a joint account holder along withher father to show that the cheque was issued in respect of an https://hcservices.ecourts.gov.in/hcservices/ account maintained by her also. In paragraph 5 of the counter filedin this petition, the respondent herein has candidly admitted thatthough the respondent insisted upon issuing a cheque by thepetitioner also, the cheques covering the entire loan amount wereissued by the father of the petitioner stating that the petitionerherein did not have any bank account in her name; that on the otherhand, the petitioner herein assured the respondent herein that theamount will be repaid by herself and her father within a few monthsand that believing such words of the petitioner herein, therespondent herein accepted the cheques from the first accused alone(father of the petitioner herein). 7. In paragraph 8 of the counter affidavit filed in thispetition, the respondent has stated that though the cheques wereissued by the first accused (father of the petitioner herein),since both of them jointly borrowed the amount, the petitioner wasalso added as one of the accused in the complaint and that both ofthem were liable to be prosecuted as per the provisions of theNegotiable Instruments Act, 1881. A conjoint reading of thecomplaint and the counter affidavit filed in this petition willmake it clear that as per the complaint, the cheques in questionwere not issued by the petitioner herein, but were issued by herfather, who has been arrayed as accused No.1. The entire complaintand the counter affidavit proceeded on the assumption that thecheques were issued by A1, the father of the petitioner hereinalone in respect of an account maintained by him with his bank andthat though the cheques were issued by A1 alone, since the amountwas borrowed jointly by A1 and his daughter, namely petitionerherein, the petitioner herein (A2) was also responsible for theconsequences of the dishonour of the cheques issued by A1.8. Section 138 of the Negotiable Instruments Act reads asfollows:-" 138. Dishonour of cheque for insufficiency, etc., offunds in the account — Where any cheque drawn by a personon an account maintained by him with a banker for paymentof any amount of money to another person from out of thataccount for the discharge, in whole or in part, of anydebt or other liability, is returned by the bank unpaid,either because of the amount of money standing to thecredit of that account is insufficient to honour thecheque or that it exceeds the amount arranged to be paidfrom that account by an agreement made with that bank,such persons shall be deemed to have committed an offenceand shall, without prejudice to any other provision ofthis Act, be punished with imprisonment for a term whichmay extend to one year, or with fine which extend totwice the amount of the cheque, or with both:Provided that nothing contained in this sectionshall apply unless — https://hcservices.ecourts.gov.in/hcservices/ (a) the cheque has been presented to the bank withina period of six months from the date on which it is drawnor within the period of its validity, whichever isearlier;(b) the payee or the holder in due course of thecheque, as the case may be, makes a demand for thepayment of the said amount of money by giving a notice inwriting, to the drawer of the cheque, within fifteen daysof the receipt of information by him from the bankregarding the return of the cheque as unpaid; and(c) the drawer of such cheque fails to make thepayment of the said amount of money to the payee or asthe case may be, to the holder in due course of thecheque within fifteen days of the receipt of the saidnotice."9. A reading of the same will show that only the person whoissues a cheque on an account maintained in his name with a bankshall be held responsible for the penal consequences of thedishonour of the cheque, provided the other conditions are proved.It does not make any other person, in discharge of whose debt orliability the account holder issued the cheque, liable for beingprosecuted for the disohnour of the cheque. The drawer alone ismade liable for the penal consequences and the person in dischargeof whose debt or liability such cheques are issued, cannot beprosecuted for such an offence unless he/she also happens to be thedrawer of the cheque. The exceptions to the same are provided inSection 141 of the Negotiable Instruments Act, 1881, which reads asfollows:-141. Offences by companies — (1) If the personcommitting an offence under Section 138 is a company,every person who, at the time the offence was committed,was in charge of, and was responsible to the company forthe conduct of the business of the company, as well as thecompany, shall be deemed to be guilty of the offence andshall be liable to proceeded against and punishedaccordingly:Provided that nothing contained in this sub-section shallrender any person liable to punishment if he proves thatthe offence was committed without his knowledge, or thathe had exercised all due diligence to prevent thecommission of such offence:Provided further that where a person is nominated as aDirector of a company by virtue of his holding any officeor employment in the Central Government or StateGovernment or a financial corporation owned or controlledby the Central Government or the State Government, as thecase may be, he shall not be liable for prosecution underthis chapter. https://hcservices.ecourts.gov.in/hcservices/ (2) Not withstanding anything contained in sub-section (1), where any offence under this Act has beencommitted by a company and it is proved that the offencehas been committed with the consent or connivance of, oris attributable to, any neglect on the part of, anydirector, manager, secretary or other officer shall alsobe deemed to be guilty of that offence and shall be liableto be proceeded against and punished accordingly.Explanation. — For the purposes of this section, — (a) "company" means any body corporate and includes afirm or other association of individuals; and (b) "director", in relation to a firm, means apartner in the firm.10. As per Section 141, if the person committing an offencepunishable under Section 138 happens to be a company then, everyperson, who at the time of commission of offence was in charge ofand responsible to the company for the conduct of its business, aswell as the company shall be deemed to have committed the offence.Sub clause (2) of the section provides that a director of thecompany, even if he does not come under the category of personsliable under sub-clause(1) shall be deemed to have committed theoffence, if it is proved that the offence has been committed withhis consent or connivance or is attributable to neglect on hispart. As per the explanation appended to Section 141, partners areequated to a company and its directors. The definition of companyincludes the companies incorporated, partnership firms and otherassociation of individuals. The pertinent question that arises hereis whether an Hindu Undivided Family comes under the definition ofcompany found in Section 141 of the Negotiable Instruments Act,1881. 11. The learned counsel for the respondent contending that themembers of Hindu undivided family can be held liable as directorsof the company, in respect of a cheque issued by the kartha. Thelearned counsel for the respondent citing a judgment of a learnedsingle judge of Andhra Pradesh High Court in Jagadish Rai Agarwaland others v. The State of A.P. And others reported in 2005CRI.L.J.314, contended that if a cheque issued by a kartha of thefamily was dishonoured, the sons of the kartha of the family wouldbe held liable for prosecution for an offence punishable underSections 138 r/w 141 as they should be equated to the directors ofa company by virtue of the explanation found in Section 141 of theNegotiable Instruments Act. With due respect to the Hon'ble singlejudge of the Andhra Pradesh High Court, this court is not able toaccept such a blanket proposition without a qualification that suchcheque should have been issued in respect of an account maintainedin the name of the HUF in order to hold the members of the HUFresponsible for the dishonour of such cehque equating them with adirector of a company https://hcservices.ecourts.gov.in/hcservices/

12. To say that a cheque was issued by a person as kartha ofthe Hindu Undivided Family and hence the members of such family areliable for the dishonour of the cheque, the account should havebeen maintained in the name of the Hindu Undivided Family. If acheque is issued in respect of an account maintained in the name ofa partnership firm, then the partners of the firm can be madeliable as directors of the company, provided the other conditionsare proved. On the other hand, if a cheque is issued by a personwho is a partner in a partnership firm in respect of his personalaccount maintained with the bank, then neither the firm nor theother partners shall be responsible for the dishonour of suchcheque. Even in case of companies only, when the cheque is issuedin respect of an account maintained in the name of the bank, thecompany will be made liable for the dishonour of the cheque. Onthe other hand, if a cheque is issued by a director in respect ofhis personal account maintained in his name then the company or theother directors cannot be made liable. Similarly, even assumingthat an Hindu Undivided Family can be brought under the definitionof company as per the exception found in Section 141 of theNegotiable Instruments Act, if the cheque in question is not issuedin respect of an account maintained in the name of the HinduUndivided Family, such HUF or the other members of HUF cannot beheld liable for the dishonour of such cheque. 13. In this case, it is not the case of therespondent/complainant that the cheque was issued in respect of anaccount maintained in the name of HUF. On the other hand, thecheque was issued by the first accused in respect of a bank accountmaintained by him in his own name. Furthermore, the respondent hasnot made it clear as to how the petitioner herein (A2) is sought tobe projected as a member of an Hindu Undivided Family headed by herfather, even though she is shown to be a married woman. She isdescribed in the complaint as Mrs.Gayathri. However, whiledescribing her address, instead of showing her husband's name, therespondent has chosen to describe her as daughter of the firstaccused. Apart from that there is not even a whisper either in thestatutory notice or in the complaint that the cheques in questionwere issued by the first accused in his capacity as the kartha ofan Hindu Undivided Family. 14. The complaint contains an averment in paragraph 6 that theamount was borrowed to settle the family dispute in the family ofthe daughter, namely the petitioner herein. The said avermentitself implies that the family of A1 is different from the familyof the petitioner (A2) after her marriage. Even in the counteraffidavit filed in this petition, the respondent has notincorporated any averment to the effect that the cheques inquestion were issued by the first accused as kartha of the HinduUndivided Family. On the other hand, only as an after thought, therespondent has chosen to file an additional counter affidavit on24.07.2009, in which alone it has been stated that the cheques wereissued by the first accused as kartha of family and the secondaccused, namely the petitioner herein as a member of the HinduUndivided Family is also liable as per Section 141 of the https://hcservices.ecourts.gov.in/hcservices/ Negotiable Instruments Act, 1881. Such an averment at the belatedstage, that too in the additional counter affidavit by way of animprovement made in the case of the respondent cannot beentertained. Furthermore, even assuming without admitting that forthe dishonour of a cheque issued by the kartha of the family inrespect of an account maintained in his name, the members of suchHindu Undivided Family can also be held liable under Section 138r/w 141 of the Negotiable Instruments Act holding them on par withdirectors of a company, necessary averments should have been madein the complaint to the effect that such person was in charge ofand responsible to the company (Huf) for its business. In theabsence of such necessary averments, the prosecution launchedagainst them can be quashed. 15. In this case, there is no averment in the complaint toshow how the petitioner is held responsible for the conduct of thebusiness of the Hindu Undivided Family. There is not even anaverment that the petitioner/A2 is looking after theaffairs/business of H.U.F. As pointed out supra, the petitionerhaving been given in marriage and having gone out of the family ofher father, can no longer be construed to be a member of the HinduUndivided Family responsible for its business. For that reasonalso, this court, without any hesitation, comes to the conclusionthat the prosecution launched against the petitioner herein for thedishonour of the cheques issued by her father in respect of anaccount maintained by him in his name, cannot be maintained andthat the petitioner has made out a clear case for the quashing ofthe complaint against her.16. For all the reasons stated above, this court comes to theconclusion that the prosecution launched against the petitionerherein/A2 in C.C.No.6096/2004 based on the private complaint of therespondent herein for an alleged offence punishable under Section138 of the Negotiable Instruments Act is not maintainable; that thesame is a glaring example of misuse of process of court and thatthe same deserves to be quashed using the inherent powers of thiscourt under Section 482 Cr.P.C. By way of clarification, it ismade clear that the above said observations shall apply to thecriminal prosecution launched against the petitioner/A2 alone andthis court does not express any opinion regarding themaintainability of the prosecution launched against the father ofthe petitioner herein, namely A1.17. In the result, this petition is allowed andC.C.No.6096/2004 is quashed so far as the petitioner (A2) isconcerned.Sd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ asr/To1. The XVIII Metropolitan Magistrate, Saidapet, Chennai2. The Chief Judicial Magistrate, Egmore, Chennai - 81 cc To M/s. La & Law, Advocate, SR.35529 Crl.O.P.No.30012/2008RJM(CO)SRA(20/08/2009)