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2010 DIGILAW 991 (MAD)

K. Papathi v. S. Arul Raj

2010-03-05

C.T.SELVAM

body2010
ORDER : C.T. Selvam, J. The petitioners herein who are the President and Vice President of the Thaiyyur Village Panchayat, Chengalpet Taluk, Kanchipuram District have sought quash of proceedings against them in C.C. No. 9 of 2006 on the file of the learned Judicial Magistrate I, Chengalpet. 2. The petitioners are facing prosecution for offence under Section 13 8 of the Negotiable Instruments Act. The respondent/complainant who is a contractor has taken up work for Panchayat and has been issued cheques to- wards payment and consequent to dishonour of cheques issued to him, he has preferred the complaint. 3. The gist of the complaint is as follows : The local body viz., village Panchayat had ordered stop payment of cheques 'issued to the respondent/complainant, when the general public objected to the quality of work carried out by the respondent/complainant. It is represented by the learned counsel for the petitioners that the same also was informed to the respondent/complainant. 4. It is the contention, on behalf of the petitioners that the cheques came to be issue by them in their official capacity as President, Vice President of the Thaiyyur Village Panchayat Board which is a public body. It is contended that the Panchayat Board had not been made an accused in the case and indeed the same could not be done since it is a local authority and would not fall within the description of company or director as found in the explanation to Section 141 of the Negotiable Instruments Act. It is well-known that Section 141 of the Act makes parsons liable for offence under Section 133 of the Act in certain circumstances and on the basis of vicarious liability. The explanation to such Section read as follows : "For the purposes of this Section, "debt or other liability"' means a legally enforceable debt or other liability." 5. Placing reliance on the decision of the Honourable Apex Court in Ujjam Bai v. State of Uttar Pradesh and Another, AIR 1962 SC 1621 . Mr. A. Ramalingam, learned counsellor the petitioner submits that the Panchayat Board is a local authority which would not be amenable for prosecution for offence under Section 138 read with 141 of the Act. Placing reliance on the decision of the Honourable Apex Court in Ujjam Bai v. State of Uttar Pradesh and Another, AIR 1962 SC 1621 . Mr. A. Ramalingam, learned counsellor the petitioner submits that the Panchayat Board is a local authority which would not be amenable for prosecution for offence under Section 138 read with 141 of the Act. In such decision, the Honourable Apex Court has held: "(5) That the Reference to the Government and the Legislatures is to them as institutions and is not to be understood as a reference to their functions, viz., to bodies per-forming executive and legislative functions, is perhaps forcefully brought out by the inclusion of "Local authorities" in the definition of "State". It is obvious that municipal and local Board authorities going under various descriptions in the several States would be comprehended within that term. Now municipal councils exercise, as is well known, legislative, executive as well as quasi-judicial functions. They frame Rules and bye-laws which are subordinate legislation and would fall within the description of "laws" as defined by Article 13. Municipal Councils are vested with administrative functions and they also exercise quasi-judicial functions when assessing taxes, hearing taxation appeals, to mention only a small fraction of the quasi-judicial power which they posses and exercise in the discharge of their functions as the local administration. If the "local authority" as a whole is a "State" within the definition there is no canon of construction by which any part of the action of that authority could be designated as not falling within State action for the purpose of giving rise to a violation of a fundamental right." 6. Learned counsel also draw the attention of this Court to the decision of Ajit Singh v. state of Punjab and Another, AIR 1967 SC 856 wherein it had been observed that the Gram Panchayat is a local authority and by virtue of the definition of "State" in Article 12 stands included in that term. The learned counsel added, that in any event there was no averment in the complaint that these petitioners were in day-to-day charge of the authority on whose behalf the cheque had been issued. 7. I have heard the learned amicus curiae on the submissions made by the learned counsel for the petitioners. 8. The contentions of the learned counsel for the petitioners are well- founded. 7. I have heard the learned amicus curiae on the submissions made by the learned counsel for the petitioners. 8. The contentions of the learned counsel for the petitioners are well- founded. As held by the Honourable Apex Court, the Panchayat Board would fulfil the description of a local authority. Again it would not fall within the definition of the word 'company' as found in explanation to Section 141 of the Act. Mr. A. Ramalingam, the learned counsel for the petitioners has raised very sound and strong grounds which would be accepted and acted upon by this Court. 9. Accordingly, the Criminal Original Petition shall stand allowed. The proceedings in C.C. No. 9 of 2006 on the file of the learned Judicial Magistrate I, Chengalpet shall stand quashed. Consequently, the connected miscellaneous petition is closed. 10. This Court places on record the service rendered by Mr. N. Doraisamy, amicus curiae and directs the State Legal Services Authority to pay a sum of Rs. 2,500/- to him towards his fee. Petition allowed.