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2012 DIGILAW 76 (GUJ)

Harshadkumar Chimanlal Shah v. State Of Gujarat

2012-02-01

M.R.SHAH

body2012
JUDGMENT : M.R.Shah, J. Present petition under section 482 of the Code of Criminal Procedure has been preferred by the petitioner - original accused No.2 to quash and set aside the impugned complaint being Criminal Case No. 11496 of 2009, filed by the respondent No.2 herein - original complainant for the offence under section 138 of Negotiable Instruments Act, pending in the court of learned Judicial Magistrate (First Class), Rajkot. 2. The respondent No.2 herein - original complainant has filed the impugned complaint being Criminal Case No. 11496 of 2009 under section 138 of Negotiable Instruments Act against the petitioner - original accused No.2 and another, in the court of learned Judicial Magistrate (First Class), Rajkot for the offence under section 138 of the Negotiable Instruments Act for dishonour of the cheque issued by the original accused No.1 - a Proprietorship Firm. That in the said complaint, learned Magistrate has directed to issue Summons against the petitioner - original accused No.2 for the offence under section 138 of Negotiable Instruments Act. Hence, the petitioner - original accused No.2 has preferred the present petition. 3. Mr.Manish Patel, learned advocate appearing on behalf of the petitioner - original accused No.2 has vehemently submitted that considering the fact that cheque in question which has been dishonored and for which the impugned complaint has been filed, has been issued by the original accused No.1 - proprietorship firm and signed by its proprietor - Priteshbhai Kantilal and from the Bank Account maintained by the original accused No.1 and therefore, the petitioner herein - original accused no.2 cannot be held liable for the offence under section 138 of the Negotiable Instruments Act. 3.01. Mr.Patel, learned advocate appearing on behalf of the petitioner has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Jugesh Sehgal V. Shamsher Singh Gogi, reported in (2009) 14 SCC 683 ., as well as decision of this Court in the case of Mahendrakumar Tulsibhai Patel V State of Gujarat and another, reported in 2008 (1) GLH 196 . By making above submissions and relying upon decisions, it is requested to allow the present petition and to quash and set aside the impugned complaint qua petitioner herein - original accused No.2. 4.00. Present petition is opposed by Mr.Haresh H. Patel, learned advocate appearing on behalf of the respondent No.2 - original complainant. By making above submissions and relying upon decisions, it is requested to allow the present petition and to quash and set aside the impugned complaint qua petitioner herein - original accused No.2. 4.00. Present petition is opposed by Mr.Haresh H. Patel, learned advocate appearing on behalf of the respondent No.2 - original complainant. It is submitted that in the complaint it is specifically averred and alleged that the petitioner - original accused No.2 was in day-to-day management and affairs of the business of the original accused No.1 and therefore, the petitioner can also be held liable and/or vicariously liable under section 141 of the Negotiable Instruments Act for the offence under section 138 of the Negotiable Instruments Act alleged to have been committed by the original accused No.1. 4.01. Mr.Patel, learned advocate appearing on behalf of the original complainant has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Rallis India Ltd. V. Poduru Vidya Bhusan & Ors., reported in 2011 (4) Scale 614 . By making above submissions and relying upon above decision it is requested to dismiss the present petition. 5.00. Mr.Dabhi, learned Additional Public Prosecutor has requested to pass appropriate order in the facts and circumstances of the case. 6.00. Heard the learned advocates appearing on behalf of the respective parties at length. 7.00. At the outset, it is required to be noted that the impugned compliant has been filed by the respondent No.2 - original complainant for the offence under section 138 of the Negotiable Instruments Act against the petitioner - original accused No.2 and one another, for dishonour of the cheque which was admittedly issued by the original accused No.1 - a Proprietorship Firm named Arihant Sales Corporation and signed by its Proprietor named Priteshbhai Kantilal and the cheque is drawn from the Bank Account maintained by the original accused No.1. Under the circumstances when the cheque has been issued by the original accused No.1 - Proprietorship Firm and signed by its Proprietor - Priteshbhai Kantilal and said cheque is drawn from the Bank Account maintained by the original accused No.1, it cannot be said that for dishonour of the said cheque, petitioner herein - original accused No.2 is liable for the offence under section 138 of the Negotiable Instruments Act. 7.01. 7.01. The concept of day-to-day business and management would be applicable with respect to the offence alleged to have been committed by the Company and/or Proprietorship Firm and the question with respect to vicarious liability as provided under section 141 of the Negotiable Instruments Act would not be applicable with respect to a Proprietorship Firm. 7.02. In the case of Raghu Lakshminarayan Versus Fine Tubes, reported in (2007) 5 SCC 103 ., the Hon'ble Supreme Court has specifically held that if cheque is issued by proprietorship Firm, it cannot be a Company under explanation to section 141 of the Negotiable Instruments Act and section 34 of the Companies Act and or a Partnership Firm under section 4 of the Partnership Act. It is specifically observed by the Hon'ble Supreme Court in the said decision that if the offence had not been committed by a Company, the question of appellant (in that case) being a Director or is being vicariously liable and proceeded against would not arise. 7.03. It is specifically observed by the Hon'ble Supreme Court in the said decision that if the offence had not been committed by a Company, the question of appellant (in that case) being a Director or is being vicariously liable and proceeded against would not arise. 7.03. In the case of Jugesh Sehgal (supra), the Hon'ble Supreme Court has held that to constitute the offence under section 138 of the Negotiable Instruments Act 1881 the following ingredients are required to be full filled :- "(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." 7.04. Similar view has been expressed by the Hon'ble Supreme Court in the case of PJ Agro Tech Limited and others V. Water Base Limited reported in (2010) 12 SCC 146 . 7.05. Similar view has been expressed by the Hon'ble Supreme Court in the case of PJ Agro Tech Limited and others V. Water Base Limited reported in (2010) 12 SCC 146 . 7.05. Identical question came to be considered by this court in the case of Mahendrakumar Tulsibhai Patel (supra) and in similar set of facts and circumstances this Court has held that the person who has not issued the cheque, not drawn from the Bank Account maintained by him, cannot be said to have committed offence under section 138 of the Negotiable Instruments Act. Under the circumstances, it cannot be said that the petitioner has committed any offence under section 138 of the Negotiable Instruments Act as alleged, for dishonour of the cheque issued by the original accused No.1 Proprietorship Firm, signed by its proprietor - Priteshbhai Kantilal and issued from the Bank Account maintained by it. 7.06. Now, so far as the decision of the Hon'ble Supreme Court in the case of Rallis India Ltd. (supra), relied upon by the learned advocate appearing on behalf of the original complainant is concerned, the said decision would not be applicable to the facts of the present case and/or the same would not be of any assistance to the original complainant. In the case before the Hon'ble Supreme Court the cheque was issued by the company and the other accused persons were directors and they were described in the complaint as Directors and one of the Director approached the High Court for quashing the complaint submitting that at the relevant time when the cheque was issued, he had already resigned / retired as a Director and the same was disputed by the complainant and to that the Hon'ble Supreme Court has held that as the resignation/retirement is disputed, such disputed questions of facts, are required to be considered at the time of trial. In the case before the Hon'ble Supreme Court the case was not with respect to Proprietorship Firm. On the contrary, with respect to Proprietorship Firm, the Hon'ble Supreme Court in the case of Raghu Lakshminarayan (supra) has observed and held as above. 7.07. In the case before the Hon'ble Supreme Court the case was not with respect to Proprietorship Firm. On the contrary, with respect to Proprietorship Firm, the Hon'ble Supreme Court in the case of Raghu Lakshminarayan (supra) has observed and held as above. 7.07. Under the aforesaid facts and circumstances, when the petitioner cannot be said to have committed offence under section 138 of the Negotiable Instruments Act, to continue the criminal proceedings against the petitioner would be unnecessary harassment to him and the same shall be abuse of process of law and court. Therefore, this is a fit case to exercise powers under section 482 of the Code of Criminal Procedure and to quash and set aside the impugned criminal proceeding against the petitioner. 8. In view of the above and for the reasons stated above, present petition succeeds. The impugned complaint being Criminal Case No. 11496 of 2009, at the relevant time pending in the court of learned Judicial Magistrate (First Class), Rajkot is hereby quashed and set aside so far as the petitioner herein - original accused No.2 is concerned. However, the same shall be without prejudice to the rights and contentions of the original complainant/prosecution against the other accused and other accused shall be tried by the concerned Magistrate in accordance with law and on merits and without in any way being influenced by the present judgement and order which relates to petitioner herein - original accused No.2 only. Rule is made absolute accordingly. Petition Allowed.