Diwakar v. A.Shoba by Power of Attorney Agent C.Ananda Kumar Jain

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 28.08.2009CORAM:THE HONOURABLE MRS.JUSTICE ARUNA JAGADEESANCrl.OP.No.45078/2003Cr.MP.Nos.13180 & 13180/2003Diwakar..Petitioner VsA.Shoba by Power of Attorney Agent C.Ananda Kumar Jain..RespondentPrayer:- This Criminal Original Petition is filed to quash thecomplaint in CC.No.2311/2003 pending on the file of the VIIIMetropolitan Magistrate, George Town, Chennai.For Petitioner : Mr.M.PrabhakarFor Respondent : Mr.R.SivakumarORDER This Criminal Original Petition is filed to quash thecomplaint in CC.No.2311/2003 pending on the file of the VIIIMetropolitan Magistrate, George Town, Chennai.2. The respondent had lodged the said complaint againstpetitioner for the offence under Section 138 of the NegotiableInstruments Act, arraying the petitioner as A2 and two others, Sankaras A1 and Viravan as A3.3. According to the respondent, all the accused executed aletter of undertaking on 13.6.2002 and agreed to pay a sum of Rs.2lakhs by way of four cheques for the amount due and payable by A2 andA3. In pursuance of the said undertaking, A1 had paid a sum ofRs.97,000/- covered by two cheques and issued two other cheques for asum of Rs.51,000/- and Rs.52,000/-. The complainant presented theabove mentioned two cheques on 17.12.2002 for encasement, but thesame were returned dishonoured by the State Bank of India, SidcoIndustrial Estate, Ambattur, Chennai 600098 on 18.12.2002 with anendorsement “insufficient funds” and the same was communicated to thecomplainant by her Bank M/s.Lakshmi Vilas Bank Limited on 19.12.2002.The complainant issued a statutory notice to the accused on31.12.2002 through RPAD and in spite of service of notice, all the https://hcservices.ecourts.gov.in/hcservices/ accused failed to pay the cheque amounts. Therefore, the presentcomplaint has been filed.4. Mr.M.Prabhakar, the learned counsel for the petitionerhas submitted that the petitioner, who is arrayed as A2, is neitherthe drawer of the cheque on an account maintained by him with a Banknor would there be presumption of any collusion between him and thedrawer of the cheque, A1 in the absence of any specific averment tothat effect in the complaint. Therefore, he would contend that evenif it is presumed that A1 drew the cheque on behalf of or at thebehest of the petitioner, there can be no vicarious liability and thepetitioner cannot be said to have committed an offence under Section138 of the Negotiable Instruments Act.5. On the other hand, Mr.R.Sivakumar the learned counselfor the respondent drew the attention of this court to the dischargepetition filed by the petitioner, in which the respondent has filed acounter, reiterating the liability of the petitioner to pay thecheque amount. The learned counsel would contend that having filed adischarge petition, the petitioner is not permitted to invoke thejurisdiction of this court under Section 482 of Code of CriminalProcedure and the amounts were due and payable by A2 and A3 and underthe letter of undertaking executed by all the three accused, A1agreed to pay the amount and issued cheques drawn by him, which werepresented and returned dishonored.6. At the outset, the discharge petition has not beendisposed of by the court below. The High Court can exercise itsinherent jurisdiction in quashing a criminal proceedings when theallegations made in the complaint do not constitute an offence andalso exercise of power is necessary either to prevent the abuse ofprocess of law otherwise to secure the ends of justice. Merelybecause, the discharge petition is filed by the petitioner before thetrial court, it cannot prevent the petitioner from invoking the powerunder Section 482 of Code of Criminal Procedure, if the requirementsof that section are satisfied.7. In the instant case, the petitioner is not the drawerof the cheque and the cheque was drawn only by A1, who is said tohave been managing the account with the Bank and as per the case ofthe petitioner no account is maintained by the petitioner in respectof said two cheques. Necessary ingredients of Section 138 of theNegotiable Instruments Act have been spelt by the Honourable SupremeCourt in the decision rendered in the case M/s.Kusum Ingots & AlloysLimited Vs. M/s.Pennar Peterson Securities Ltd and others [AIR-2000-SC-954] and they are:-(i) a person must have drawn a cheque on an account maintainedby him in the Bank for payment of a certain amount of money toanother person from out of that account for the discharge ofany debt or other liability, https://hcservices.ecourts.gov.in/hcservices/ (ii) the cheque has been presented to the Bank within a periodof six months from the date on which it is drawn or within theperiod of its validity whichever is earlier, (iii) the cheque is returned by the bank unpaid either becauseof the amount of money standing to the credit of the account isinsufficient to honour the cheque or that it exceeds the amountarranged to be paid from that account by an agreement made withthe Bank, (iv) the payee or the holder in due course of the cheque makesa demand for the payment of the said amount of money by givinga notice in writing to the drawer of the cheque within 15 daysof the receipt of information by him from the bank regardingthe return of the cheque as unpaid and (v) the drawer of such cheque fails to make payment of the saidamount of money to the payee or the holder in due course of thecheque within 15 days of the receipt of the said notice.The above position of law is again reiterated by the HonourableSupreme Court in the case of Indira (K.R) Vs. Adinarayana [AIR-2003-SC-4689. In the case of P.Ramakrishnan and another Vs. Bagnar FinanceCo. [1995-83-Company Cases-769-Madras], involving a case where twopetitioners had entered into an agreement with the respondent andobtained a loan and the 1st petitioner issued two cheques in favour ofthe respondent, it was held that since the 2nd petitioner was not thedrawer of the cheque in question, the prosecution instituted againsthim was not sustainable.8. Likewise, in another decision rendered in the case ofSudesh Kumar Sharma Vs. K.S.Selvamani and others [1995-84-CompanyCases-806-Madras], the 1st petitioner was the Proprietor of theConcern, for whose liability the 2nd petitioner, his son issued acheque. It was held in the said decision that the 1st petitioner couldnot be made criminally liable for the offence under Section 138 ofthe Negotiable Instruments Act in any of the complaints. 9. From a plain reading of Section 138 of the NegotiableInstruments Act, it is clear that the offence under the said sectioncan be committed by the drawer of the cheque on an account maintainedby him with a Bank, but not by any other person. In the instantcase, merely because the petitioner along with other accused executedthe letter of undertaking, under which A1 agreed to pay a total sumof Rs.2 lakhs by way of 4 cheques and issued cheques, there can be novicarious liability for the petitioner, as in terms of Section 138 ofthe Negotiable Instruments Act, when a cheque is bounced, the person,who issues it become liable for prosecution for the offence under thesaid provision. In such circumstances, whether the cheque is issuedby A1 at the behest of the petitioner or not, the person who had https://hcservices.ecourts.gov.in/hcservices/ drawn the cheque is liable under Section 138 of the Act, for thepurpose of Section 138 of the Act. It is not necessary that a debtfor which the cheque is issued, should be the liability of the drawerhimself.10. In the case of Ramachandra Reddy Vs Abid Ali andanother [2007-Crl.LJ-641-AP], it is held that the object of theLegislature being to enhance the credibility or acceptability of thecheque and in view of the wordings under Section 138 of theNegotiable Instruments Act, it is immaterial whether the cheque wasissued for discharge of his own debt or liability. The cheque issuedfor the discharge of another man's debt or liability would also comewithin the scope of Section 138 of the Negotiable Instruments Act.11. That apart, it is prerequisite of the offence underSection 138 of the Act that a cheque drawn by a person must be on anaccount maintained by him with the banker and if such a cheque hasbeen dishonoured, the drawer of the said cheque will be liable forthe said offence. None of the above ingredients are attracted in theinstant case and no criminal liability can be fastened on thepetitioner.12. In view of the reasons stated above, the criminalprosecution against the petitioner cannot be allowed to continue andhence, the impugned complaint is quashed in so far as the petitioneris concerned. Accordingly, this Criminal Original Petition isallowed. Consequently, the connected MPs are closed. Srcm Sd/Asst. Registrar/true copy/Sub Asst.RegistrarTo:1.The VIII Metropolitan Magistrate, George Town, Chennai2.-do- Through The Chief Metropolitan Magistrate Chennai.3.The Public Prosecutor, High Court, Madras.+ One CC to Mr.M.Prabhakar Advocate (SR.No.43645)Crl.OP.No.45078/2003KK(CO)VC(22.10.2009)