Laxmanbhai Bhimjibhai Shuagiya v. State of Gujarat
2011-12-15
M.R.SHAH
body2011
DigiLaw.ai
JUDGMENT : M.R. Shah, J. Present Criminal Miscellaneous Application under Section 482 of the Code of Criminal Procedure has been preferred by the applicant original accused no.2 to quash and set aside the impugned complaint being Criminal Case No. 931 of 2006 pending in the Court of Metropolitan Magistrate, Court No.14, Ahmedabad, for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. 2. The facts leading to the present application in nutshell are as under: 2.1. That one Bharatbhai Balubhai Patel proprietor of M/s. Riddhi Textile took loan/advance from the original complainantthe Saurashtra Cooperative Bank Ltd., to which the original accused no.1 wife of the applicant stood as guarantor. That the original complainant filed Lavad Suit No.2337 of 2003 against the original borrower as well as wife of the applicant (as a guarantor) for recovery of Rs. 45,49,185/-. That the learned Board of Nominees passed judgment and Award against the defendants inclusive of the wife of the applicant and decreed the suit for the aforesaid amount in favour of the original complainant Saurashtra Cooperative Bank Ltd. That the original complainant Bank filed an Execution Application No.363 of 2004 before the City Civil Court, Ahmedabad for recovery of a total sum of Rs. 58,32,176/- and the learned Executing Court passed order of attachment and issued attachment warrant. At the time when the Court Bailiff went to execute the attachment warrant, to avoid attachment of the property, the applicant here-in-original accused no.2 gave four different cheques in question for sum of Rs. 5000/each signed by him and drawn from his bank account, for and on behalf of original accused no.1guarantor, who is his wife. That before the said cheques could be deposited in the Bank, the original accused no.1 guarantor submitted the Restoration Application No.139 of 2005 before the learned Board of Nominees and requested to quash and set aside exparte judgment and award. In view of the interim order passed in the said Restoration Application, complainant could not deposit the aforesaid cheques thereafter. That the said Restoration Application No.139 of 2005 came to be dismissed by the learned Board of Nominees by judgment and order dated 16.1.2006 with cost.
In view of the interim order passed in the said Restoration Application, complainant could not deposit the aforesaid cheques thereafter. That the said Restoration Application No.139 of 2005 came to be dismissed by the learned Board of Nominees by judgment and order dated 16.1.2006 with cost. It is the case of the original complainant that thereafter the accused persons assured the complainant that as and when aforesaid cheques are deposited, the same shall be honoured and therefore, all the aforesaid cheques came to be deposited by the complainant with their banker on 25.1.2006 and all the aforesaid cheques came to be returned with an endorsement "fund insufficient". That thereafter, after serving statutory notice under Section 138 of the Negotiable Instruments Act, complainant has filed the impugned Complaint being Criminal Case No. 931 of 2006 in the Court of learned Chief Judicial Magistrate against the accused persons inclusive of applicant original accused no.2 for the offence under Section 138 of the Negotiable Instruments Act and the learned Metropolitan Magistrate Court No.14, Ahmedabad has directed to issue summons against the applicant and one another accused person for the offence under Section 138 of the Negotiable Instruments Act. It appears that after the aforesaid cheques were deposited by the complainant and after they were dishonoured by their bankers on the ground of "fund insufficient" and after the statutory notice was served upon the accused persons, original accused no.1 and one another preferred Appeal No.233 of 2006 before the Gujarat State Cooperative Tribunal challenging the original judgment and award passed by the learned Board of Nominees as well as order passed by the learned Board of Nominees rejecting the restoration application and by order dated 22.2.2006, the learned Tribunal granted conditional stay of the judgment and award passed by the learned Board of Nominees on condition that the appellants of the said appeal inclusive of the original accused no.1 deposits Rs. 2 lacs within two months out of which Rs. 1 lacs to be deposited on or before 23.3.2006.
2 lacs within two months out of which Rs. 1 lacs to be deposited on or before 23.3.2006. Thereafter, being aggrieved and dissatisfied with impugned complaint/criminal case and the order passed by the learned Metropolitan Magistrate directing to issue summons against the applicant for the offence under Section 138 of the Negotiable Instruments Act, the applicant original accused no.2 who has issued the cheques and who is signatory to the cheques in question and from whose bank account the cheques have been drawn has preferred the present Criminal Miscellaneous Application under Section 482 of the Code of Criminal Procedure. 3. Shri A.R. Gupta, learned advocate for the applicant herein original accused no.2 has vehemently submitted that as such applicant-original accused no.2 has not committed any offence as alleged for the offence under Section 138 of the Negotiable Instruments Act. It is submitted that there was no legal debt or liability at the time of issuance of the cheques so far as applicant is concerned and therefore, ingredients of Section 138 of the N.I. Act are not satisfied. It is further submitted that, therefore, when there was no legal debt or liability of the applicant who had issued cheques to the respondent no.2original complainant, complaint do not fulfill the basic requirement of the provisions of Section 138 of the Negotiable Instruments Act. It is submitted that by issuance of such cheques in such circumstances, no privity is created between the applicant and respondent no.2. It is submitted that similarly the concept of vicarious liability as set out in Section 141 cannot be invoked as the same is applicable only in case of company or partnership firm. It is submitted that in the present case as such dues were that of original accused no.1, who stood as guarantor with respect to the loan advanced to the proprietorship firm and the firm is liable to pay dues of the bank. 3.1. Shri A.R. Gupta, learned advocate for the applicant original accused no.2 has heavily relied upon the decision of the Hon'ble Supreme Court in the case of P.J. Agro Tech Limited and Others v. Water Base Limited reported in (2010) 12 SCC 146 . 3.2.
3.1. Shri A.R. Gupta, learned advocate for the applicant original accused no.2 has heavily relied upon the decision of the Hon'ble Supreme Court in the case of P.J. Agro Tech Limited and Others v. Water Base Limited reported in (2010) 12 SCC 146 . 3.2. It is further submitted by Shri A.R. Gupta, learned advocate for the applicant-original accused no.2 that even after the statutory notice under Section 138 of the N.I. Act and within 15 days there was already an order passed by the learned Cooperative Tribunal staying the judgment and award passed against the original accused no.1 on condition to deposit of Rs. 2 lacs, which was deposited and therefore, even dues/liability under the judgment and award passed by the learned Board of Nominees did not give the rise and/or cause of action to file the complaint under Section 138 of the N.I. Act. Therefore, it is submitted that even there was no debt or liability giving cause of action to file the impugned complaint under Section 138 of the N.I. Act even with respect to the original accused no.1 who stood as a guarantor. 3.3 Therefore, it is submitted that when at the relevant time when the cheques in question were issued by the applicant, there was no legal debt and payable by the applicant to the original complainant respondent no.2, the proceedings under Section 138 of the N.I. Act instituted against the present applicant original accused no.2 is not maintainable. Therefore, it is requested to allow the present application. 4. Application is opposed by Shri Snajeev Kumar, learned advocate for the respondent no.2original complainant. It is submitted that at the relevant time when the cheques in question was issued by the applicant original accused no.2 signed by him, the execution proceedings were initiated against the original accused no.1 wife of the applicant and to avoid further proceedings and/or attachment of the property, the applicant here-in-original accused no.2 has issued the cheques in question and accepted the liability and requested to postpone the execution of the judgment, which was passed against the original accused no.1 wife. Therefore, at the relevant time by issuing the cheques in question, he was successful in postponing execution of the judgment and award passed against his wife and therefore, the case would fall within "other liability".
Therefore, at the relevant time by issuing the cheques in question, he was successful in postponing execution of the judgment and award passed against his wife and therefore, the case would fall within "other liability". It is further submitted that as the applicant is the signatory to the cheques in question which are dishonoured and the said cheque is drawn from the bank account maintained by him all the ingredients of Section 138 of the Negotiable Instruments Act are satisfied and therefore, the impugned complaint is not required to be quashed and set aside. It is submitted that even otherwise there is a statutory presumption as provided under Sections 139 r/w 138 of the Negotiable Instruments Act that the cheques are issued for legal debt and/or liability, which is rebuttable and such rebuttal can be at the time of trial on leading the appropriate evidence. Therefore, it is requested to dismiss the present application. 5. Heard the learned advocates for the respective parties at length. At the outset, it is required to be noted that admittedly the cheques in question which has been dishonoured and for which the impugned complaint has been filed for the offence under Section 138 of the Negotiable Instruments Act, have been issued by the applicant here-in-original accused no.2 and drawn from the bank account maintained by him. It is required to be noted at this stage that the said cheques in question have been issued by the applicant here-in-original accused no.2 and given it to the respondent no.2 bank at the time when the judgment and award passed by the learned Board of Nominees was sought to be executed against his wife i.e. original accused no.1 who stood as guarantor and against whom the judgment and award was passed and at the relevant time when the property of his wife was sought to be attached in execution. Therefore, so as to avoid attachment of the property of his wife in execution, at the relevant time he issued the aforesaid cheques and was successful in postponing the execution of the judgment and award passed against his wife and avoided the attachment of the property of his wife.
Therefore, so as to avoid attachment of the property of his wife in execution, at the relevant time he issued the aforesaid cheques and was successful in postponing the execution of the judgment and award passed against his wife and avoided the attachment of the property of his wife. It is the case of the applicant that nothing was due and payable by the applicant and there was no legal debt, dues and payable by the applicant to the respondent no.2 Bank and therefore, it is the case of the applicant that all the ingredients of Section 138 of the N.I. Act are not satisfied and therefore, proceedings against him under Section 138 of the N.I. Act are not maintainable. The aforesaid seems to be attractive but has no substance. The case would fall under the "other liability". Considering the provision of Section 138 of the N.I. Act when a cheque is issued by a person with respect to legal debt and/or other liability and the said cheque is signed by him and drawn from the bank account maintained by him and the said cheque is dishonoured, it can be said that he has committed the offence under Section 138 of the Negotiable Instruments Act. In the present case, as stated above, the case would fall under "other liability" as he accepted the liability of his wife and issued the aforesaid cheque signed by him. If the petitioner would not have issued the said cheques and would not have accepted the liability, in that case the execution proceedings against her wife to execute the judgment and award passed by the learned Board of Nominees would have continued and property would have been attached. Therefore, when at the time of execution of the judgment and award passed against the original accused no.1 when he accepted the liability and issued the cheque signed by him and drawn from the Bank Account maintained by him, thereafter it is not open for the applicant to contend that there was no legal debt, due and payable by him to respondent no.2 bank and therefore, for dishonour of the cheque which has been signed by him and drawn from the bank account maintained by him, complaint under Section 138 of the N.I. Act is not maintainable. 5.1.
5.1. Now, so far as reliance place upon the decision of the Hon'ble Supreme Court in the case of P. J. Agro Tech Limited and Others (supra) relied upon by the learned advocate for the petitioner is concerned, it appears that on facts the said decision would not be of any assistance to the applicant. In the case before the Hon'ble Supreme Court the question with respect to the liability under Sections 138 & 141 of the N.I. Act for dishonour of the cheque issued by another but for dues of accused. In the case before the Hon'ble Supreme Court, the cheque which was dishonoured, was issued by the employee of the company issued on his personal account to pay the dues of the company and Directors of the company were sought to be prosecuted for the offence under Section 138 of the N.I. Act on the ground that dues were of the company. To that Hon'ble Supreme Court has observed that when the dishonour of the cheque is issued by employee of the company on his personal account may be to pay the dues of the company and the cheque is not issued by the company, the liability of the Director or company for dishonour of the said cheque, does not arise. On considering the decision of the Hon'ble Supreme Court in the case of P. J. Agro Tech Limited and Others (supra), it appears that aforesaid decision as such would go against the petitioner rather than supporting him. In para 11 to 14 the Hon'ble Supreme Court has observed as under: 11. From the submissions made on behalf of the respective parties, it is quite apparent that the short point for decision in this Appeal is whether a complaint under Section 138 of the 1881 Act would be maintainable against a person who was not the drawer of the cheque from an account maintained by him, which ultimately came to be dishonoured on presentation. 12. Since the provisions of Section 138 of the 1881 Act have fallen for consideration in this Appeal, the same are extracted here-in-below : 138.
12. Since the provisions of Section 138 of the 1881 Act have fallen for consideration in this Appeal, the same are extracted here-in-below : 138. Dishonour of cheque for insufficiency, etc., of funds in the account - Where any cheque drawn by a person on an account maintained by him with a banker for 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, 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 by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the 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; (b) the payee or the holder in due course of the cheque, as the case may be, 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 thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation. - For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability." 13.
Explanation. - For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability." 13. From a reading of the said Section, it is very clear that in order to attract the provisions thereof a cheque which is dishonoured will have to be drawn by a person on an account maintained by him with the banker for 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. It is only such a cheque which is dishonoured which would attract the provisions of Section 138 of the above Act against the drawer of the cheque. 14. In the instant case, the cheque which had been dishonoured may have been issued by the Respondent No.11 for discharging the dues of the Appellant No.1 Company and its Directors to the Respondent No.1 Company and the Respondent Company may have a good case against the Appellant No.1 Company for recovery of its dues before other for but it would not be sufficient to attract the provisions of Section 138 of the 1881 Act. The Appellant Company and its Directors cannot be made liable under Section 138 of the 1881 Act for a default committed by the Respondent No.11. An action in respect of a criminal or a quasi criminal provision has to be strictly construed in keeping with the provisions alleged to have been violated. The proceedings in such matters are in personam and cannot be used to foist an offence on some other person, who under the statute was not liable for the commission of such offence. 5.2. Considering the aforesaid decision of the Hon'ble Supreme Court and for the reasons stated above and when the cheques in question have been issued by the applicant herein signed by him and drawn from the Bank Account maintained by him issued at the time of execution of the judgment and award against his wife-original accused no.1 with a view to avoid and/or postpone the execution of the judgment and award against her, it cannot be said that there was no liability of the applicant and therefore, it cannot be said that the impugned complaint against the applicant for the offence under Section 138 of the N.I. Act is not maintainable as sought to be contended on behalf of the applicant. 6.
6. In view of the above and for the reasons stated above, there is no substance in the present application, which deserves to be dismissed and is accordingly dismissed. Rule discharged. Ad interim relief, if any, stands vacated forthwith. Application dismissed.