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2002 DIGILAW 996 (DEL)

R. R. J. DASS v. SATYA BHAMA LAL

2002-07-26

S.K.AGARWAL

body2002
S. K. Agarwal ( 1 ) THIS revision petition under Sections 397/401 of the Code of Criminal Procedure (for short, "cr. P. C. "), 1973, is directed against the order dated 4. 6. 2001, passed by the court of Metropolitan magistrate, New Delhi, dismissing the application of the petitioner for recalling the order of summoning, on the complaint filed by the respondent under Section 138 of the Negotiable Instruments Act (for short, NI Act), 1881. ( 2 ) THE facts in brief necessary for disposal of this petition are that respondent filed complaint under sections 138 and 141 of NI Act, against M/s. Instalment corporation Limited and Ors. and its directors, including petitioner, alleging therein that under the agreement dated 15. 7. 94, complainant deposited with the company of petitioner a sum of Rs. 5,00,000/- for a period of 24 months. The agreement was signed by the petitioner on behalf of the company. In his capacity as the vice-president and the director. There was a breach of the agreement and in discharge of their liability petitioner issued a cheque of Rs. 4,00,000/- on 1. 8. 97, drawn on Punjab National Bank, Bhikaji Cama Palace, New delhi in favour of the respondent. Complainant presented the cheque in Indian Overseas Bank, Noida for realisation on 4. 8. 97, and the same was dishonoured with the remark "insufficient fund". On receipt of information a legal notice through the counsel of complainant was served on the company of petitioner on 13,8. 97, calling upon them to pay to the complainant rs. 4,00,000/-, within the period of 15 days from the receipt of the said legal notice. The amount was not paid despite service of notice. The petitioner along with the two others mentioned in the complaint was stated to be responsible for the running of the day-to-day affairs of the company as envisaged under section 141 of the NI Act. On the basis of the material produced, the accused persons were summoned in the above complaint. On 17. 9. 99, petitioner moved an application for recalling the order of summoning before the trial court, the same was dismissed vide order dated 4. 6. 2001. This order is under challenge. On the basis of the material produced, the accused persons were summoned in the above complaint. On 17. 9. 99, petitioner moved an application for recalling the order of summoning before the trial court, the same was dismissed vide order dated 4. 6. 2001. This order is under challenge. ( 3 ) IT may be mentioned here that the perusal of the trial court record revealed that petitioner s plea for stay of criminal proceedings before the trial court, on the ground that his company was under liquidation, was rejected vide order dated 3. 2. 2001. Petitioner s earlier petitioner (Crl. M. (M ). No. 3017/2001) was declined by Hon ble Mr. Justice K. S. Gupta on 6. 11. 2001 observing:- "in view of decision in D. K. Kapur Vs. Reserve Bank of India and others, 90 (2001) dlt 127, this petition deserves to be dismissed being without any merit. "the above revision petition was filed on 31. 8. 2001, against another order dated 1. 6. 2001, passed by the trial court in the same case holding that there was valid service of notice. I have heard learned counsel for parties and have been taken through the record. ( 4 ) LEARNED counsel for petitioner argued that before offence under Section 138 of NI Act, can be said to have been committed, statutory notice to the drawer in terms of clause (b) of proviso of Section 138 of NI act is necessary; that only on failure of the drawer to make the payment within 15 days of the receipt of the statutory notice, as envisaged by clause (c) of the proviso, liability of the drawer for being prosecuted under section 138 N. I. Act can arise; that the complainant had given notice only to the company, at safdurjung Enclave, New Delhi, whereas registered office of the company was at Dehradoon and that Delhi office of the company was at 5, Bhikaji Cama Palace. Learned counsel argued that there was no valid legal notice served by the complainant on the company and no notice was served on the petitioner, who was the director of the accused company, therefore, provisions of Sections 138 and 141 of NI Act do not apply. Learned counsel for respondent argued to the contrary. Learned counsel argued that there was no valid legal notice served by the complainant on the company and no notice was served on the petitioner, who was the director of the accused company, therefore, provisions of Sections 138 and 141 of NI Act do not apply. Learned counsel for respondent argued to the contrary. ( 5 ) IN this case, notice was served on the company at the address on which it had been corresponding with the complainant. This fact is not denied by the company. Giving statutory notice under Section 138 (b) of NI Act is pre-condition of filing the complaint, but the notice is required to be given only to the drawer of the cheque. There is no requirement of law that notice should also be given to the directors or/and officer in-charge of the affairs of the company. Maker of the cheque in question is the accused company-M/s. Instalment corporation Limited. The petitioner signed the cheque on behalf of the company, which was dishonoured, but the the cheque was issued by the company. The cheque was signed by the petitioner, but this would not make him drawer or the maker of the cheque. Thus the requirement of service of statutory notice on the accused company under Section 138 (b) of NI Act, stands fully complied with. There is no legal requirement to give individual notices to directors or the officers in-charge of the company. The directors become liable to be prosecuted and punishable by virtue of Section 141 of NI Act, which does not talk of any separate notice. This finds support from the observations made by Apex court in Anil hada Vs. Indian Acrylic Ltd. (2000) 1 SCC 1 , wherein it was held: "the offender in Section 138 of the Negotiable instruments Act, 1881 is the drawer of the cheque. He alone would have been the offender thereunder if the Act did not contain other provisions. It is because of Section 141 of the Act that penal liability under Section 138 is cast on other persons connected with the company. "in view of the above discussion, I find no merit in this contention and the same is rejected. He alone would have been the offender thereunder if the Act did not contain other provisions. It is because of Section 141 of the Act that penal liability under Section 138 is cast on other persons connected with the company. "in view of the above discussion, I find no merit in this contention and the same is rejected. ( 6 ) LEARNED counsel for petitioner next argued that the essential ingredients of the offence under section 138 of NI Act are not fulfilled, as the cheque in question was not issued for the discharge, in whole or in part of any debt or liability. He argued that the accused company was engaged in the business of investing the amount of its clients in shares/securities/ debentures on their behalf; that the complainant had given Rs. 4,00,000/- to the accused company for investing in share/securities; and that the issuance of the cheque in the course of business does not satisfy requirements of Section 138 of NI Act, I am unable to agree. As per the averments made in the complaint, cheque in question was handed over to the complainant towards repayment of the amount which the company was liable to pay. There is a presumption under Section 139 of NI Act in favour of the drawer. This issue stands settled by several authoritative pronouncements of the supreme Court. In M/s. M. M. T. C. Ltd. v. M/s. Medchl Chamicals and Pharma (P) Ltd. , AIR 2002 SC 182 , it was held: 15. A similar view has been taken by this Court in the case of K. N. Beena v. Muniyappan reported in 2001 (7) Scale 331 , wherein again it has been held that under section 139 of the Negotiable Instruments act the Court has to presume, in a complaint under Section 138, that the cheque had been issued for a debt or liability. 16. There is therefore no requirement that the Complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on basis of averments in the Petitions filed by them the High Court could not have concluded that there was no existing debt or liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on basis of averments in the Petitions filed by them the High Court could not have concluded that there was no existing debt or liability. " (emphasis supplied) ( 7 ) THE Apex Court rejected similar contention also in A. V. Murthy v. B. S. Nagabasavanna, (2002) 2 SCC 642 , and it was held: THIS is not a case where the cheque was drawn in respect of a debt or liability, which was completely barred from being enforced under law. If for example, the cheque was drawn in respect of a debt or liability payable under a wagering contract, it could have been said that that debt or liability is not legally enforceable as it is a claim, which is prohibited under law. This case is not a case of that type. But we are certain that at this stage of the proceedings, to say that the cheque drawn by the respondent was in respect of a debt or liability, which was not legally enforceable, was clearly illegal and erroneous. " (emphasis supplied) in view of the above, the contention that the cheque was not Issued towards discharge of any liability, is liable to be rejected. ( 8 ) LEARNED counsel for petitioner next argued that the cheque in question was post dated cheque and six months period mentioned in 138 NI Act should not be calculated from the date mentioned on the cheque, but from the date when the cheque was actually drawn and given to the drawee. I am unable to agree. The post dated cheque when given, it is only a bill of exchange and as long as the cheque remains bill of exchange, provisions of Section 138 of NI Act are not applicable. The post dated cheque becomes a cheque under Section 138 of NI Act, on the date written on the cheque and the period of six months has to be reckoned under proviso (a) to Section 138 of the Act from the date written on the cheque. This issue is also settled by the Supreme Court in Ashok Yeshwant Badave v. Surendra Madhav Rao Nighojakar, AIR 2001 SC 1315 . No other point was argued. This issue is also settled by the Supreme Court in Ashok Yeshwant Badave v. Surendra Madhav Rao Nighojakar, AIR 2001 SC 1315 . No other point was argued. For the foregoing reasons, I find no merit in the petition and the same is dismissed. Any observation made herein would not affect merits of the case. Trial court record be sent back.