The High Court
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THE HIGH COURT OF ORISSA AT CUTTACK CRLMC No.3208 of 2019 (In the matter of an application under Section 482 of the Code of Criminal Procedure, 1973) Dipesh Roy & another ……. Petitioners -Versus- State of Orissa & another ……. Opposite Parties For the Petitioners: Mr. Gautam Mukherjee, Senior Advocate For the Opp. Parties : Mr. Sashanka Patra, Addl. Standing Counsel (For the O.P. No.1) Mr. Aswini Pattnaik, Advocate (For the O.P. No.2) CORAM: THE HONOURABLE SHRI JUSTICE SIBO SANKAR MISHRA Date of Hearing: 08.08.2024 : Date of Judgment: 29.10.2024 S.S. Mishra, J. In the present petition, the petitioners have invoked the inherent jurisdiction of this Court under Section 482 Cr.P.C. seeking quashing of the complaint case being 1.C.C. Case No.3500 of 2019 pending in the Court of the learned S.D.J.M., Bhubaneswar. 2. The complaint case has been initiated against the petitioners under Section 138 of the Negotiable Instruments Act by the opposite party No.2. 3. The facts of the present case, as revealed from the complaint petition, is that the accused-opposite party No.1, Subhasish Roy, describing himself as the power of attorney holder of the petitioners, the accused Nos.2 & 3, had executed an agreement with the opposite party No.2 on 28.09.2012 to sell a land in Bhubaneswar, and for such purpose, Subhasish Roy had received Rs.50 lakhs through three banker cheques. Thereafter, the sale could not be materialized, as the land was found to be disputed. Ultimately, Subhasish Roy decided to refund the amount of Rs.50 lakhs and for this purpose, he issued a cheque of Rs.50 lakhs vide Cheque No.006278 dated 10.06.2019 drawn on his banker HDFC Bank, Vivekananda Marg, Bhubaneswar to the opposite party No.2. The opposite party No.2 on 23.07.2019 deposited the cheque with its bank, namely, Oriental Bank of Commerce, Bhubaneswar, but the same was Page 2 of 15 dishonoured by the banker of Subhasish Roy on 24.07.2019 with the endorsement “Funds Insufficient”. The opposite party No.2 on 01.08.2019 issued notice to the accused persons under Section 138 of the N.I. Act demanding payment of the cheque amount. The accused No.1, Subhasish Roy, received the notice on 05.08.2019. However, the notices were also sent to the accused Nos.2 and 3, i.e., the present petitioners herein respectively, were returned with the remarks “Address Insufficient”. Thereafter, the opposite party No.2 has filed the complaint under Section 138 of the N.I. Act by deeming that the notices have been served on accused Nos.2 & 3 i.e. the petitioners herein. 4. From the pleadings and the documents in the present case, the following admitted facts are emerging on record: (A) Subhasish Roy is the drawer of the subject cheque, which got dishonoured on presentation as sufficient fund was not available in his account. (B) The present petitioners were impleaded as accused Nos.2 & 3 in the complaint on the Page 3 of 15 allegation that they have given the power of
Legal Reasoning
attorney to Mr. Subhasish Roy for sale of the land. The cheque issued by the accused No.1, Subhasish Roy, got dishonoured for insufficiency of funds. (C) The statutory notice under Section 138 of the Negotiable Instruments Act issued to the present petitioners could not be served on them as the addresses were insufficient. (D) For the want of service of notice, the present petitioners could not reply to the demand made under Section 138 of the N.I. Act. (E) There is no privy between the complainant and the petitioners. Therefore, the present petition has been filed. 5. Heard Mr. Gautam Mukherjee, learned Senior Advocate appearing on behalf of the petitioners, Mr. Sashanka Patra, learned Addl. Standing Page 4 of 15 Counsel appearing on behalf of the opposite party No.1, and Mr. Aswini Pattnaik, learned counsel appearing on behalf of the opposite party No.2. 6. Mr. Mukherjee, learned Senior Advocate appearing for the petitioners, has taken me through the averments made in the complaint case. He submitted that the facts narrated in the complaint case, even if admitted, may not be relevant for the purpose of the prosecution launched against the petitioners for the offence punishable under Section 138 of the N.I. Act, because admittedly, the cheque was not issued by the petitioners. No legal notice was served on them, which is a statutory requirement under Section 138 of the N.I. Act. Therefore, even if the factual narration made in the complaint case is believed to be true, the petitioners cannot be prosecuted under Section 138 of the N.I. Act. He has relied upon the Judgment of the Hon’ble Supreme Court in the case of Jugesh Sehgal vs. Shamsher Singh Gogi, reported in (2009) 14 SCC 683. Relevant paragraphs 13 & 14 of the said judgment are quoted hereunder: “13. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled: Page 5 of 15 (i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account; (ii) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability; (iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier; (iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank; (v) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; (vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice. Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act. 14. In the case before us, it is clear from the facts, briefly noted above, and in Para 3 of the complaint as extracted, that on receipt of the return memo from the Bank, the complainant is stated to have realised that the dishonoured cheque was issued from an account which was not maintained by Accused 1 – the appellant herein, but by one Shilpa Chaudhary.” Page 6 of 15 Mr. Mukherjee, learned Senior Advocate, also relied upon the judgment of the Hon’ble Supreme Court in the case of Alka Khandu Avhad vs. Amar Syamprasad Mishra and others, reported in (2021) 4 SCC 675. Relevant paragraph-7 of the said judgment is quoted hereunder: “7. On a fair reading of Section 138 of the NI Act, before a person can be prosecuted, the following conditions are required to be satisfied: i) ii) iii) that the cheque is drawn by a person and on an account maintained by him with a banker; for the payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability; and the said cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account. Therefore, a person who is the signatory to the cheque and the cheque is drawn by that person on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned by the bank unpaid, such person can be said to have committed an offence. Section 138 of the NI Act does not speak about the joint liability. Even in case of a joint liability, in case of individual persons, a person other than a person who has drawn the cheque on an account maintained by him, cannot be prosecuted for the offence Under Section 138 of the NI Act. A person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless Page 7 of 15 the bank account is jointly maintained and that he was a signatory to the cheque.” Mr. Mukherjee further relied upon the judgment of the High Court of Gujarat at Ahmedabad in the case of Krishna Trading Co. v. State of Gujarat, reported in 2017 SCC OnLine Guj 2589. Relevant paragraphs- 41 & 45 of the said judgment are quoted hereunder: “41. In view of the above statutory analysis with the aid of dictionary meaning, it can be held that the maker of cheque is a person who orders payment and signs the cheque. It follows that the drawer of a cheque is the person who orders payment and signs it. In this analysis, a cheque is said to have been completed or made as soon as the person orders payment and signs the cheque. This is the process by which the drawer makes the cheque. It is only the ‘drawer’ of a cheque who can be held liable for an offence under Section 138 of the N.I. Act. If that be so, the Power of Attorney Holder, who ordered payment and signed the cheque, is primarily held liable to be proceeded against for the commission of the offence under Section 138 of the N.I. Act, caused by the drawing and issuing of the cheque, when there is no sufficient fund in the account. 45. To sum up, the principles of vicarious criminal liability cannot be attributive upon the principal, who has granted power of attorney in favour of the Power of Attorney Holder for the commission of the offence under Section 138 of the N.I. Act, caused by the dishonour of the cheque for want of sufficient fund, drawn and issued by the Power of Attorney Holder. The Power of Attorney Holder cannot escape from his penal liability by saying that he signed the cheque only under authority given by the principal and not in his individual capacity.” 7. The sum and substance of the argument of Mr. Mukherjee, learned Senior Advocate, is that even if the story put-forth by the complainant Page 8 of 15 that the petitioners had given power of attorney to the principal accused for the sale of land, for which Rs.50 lakhs in advance was given and subsequently the said consideration amount was refunded by the power of attorney holder (Accused No.1) to the complainant, the liability of the offence under Section 138 of the N.I. Act cannot be fastened on the present petitioners. 8. Per contra, Mr. Aswini Pattnaik, learned counsel appearing for the opposite party No.2, submitted that the present petition is liable to be dismissed at this stage because the petitioners are assailing the complaint case at the very threshold of the proceeding. At this stage, only the process has been issued to the petitioners, hence they should appear before the Court to explain their position on defence. He has cited various judgments in support of his submissions. The following judgments are prominently cited by him.