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2013 DIGILAW 540 (GUJ)

Chirayushbhai B. Patel v. Jayeshbhai B. Patel Proprietor, J. B. Construction

2013-09-03

A.G.URAIZEE

body2013
JUDGMENT : A.G. Uraizee, J. The present application under section 482 of the Code of the Criminal Procedure, 1973 (herein after referred to as "the Code" for the sake of brevity) is preferred to quash and set aside the complaint dated 4/10/2006 filed by respondent No.1 in the Court of learned Chief Judicial Magistrate, First Class, Vadodara being Criminal Case No.5601/2006 for the offence punishable under section 138 of the Negotiable Instrument Act, 1881 and the order passed there below by the learned Magistrate to issue process qua the applicant– original accused No.2. 2. The short facts necessary for the disposal of present application are that respondent No.1 had undertaken the construction contract of an Ashram at Champaran at the instance of the applicant and his wife Bhavnaben C. Patel–Accused No.1 in the complaint. The construction contract was reduced in writing and was signed by the present applicant. Respondent No.1 started construction but thereafter the applicant and his wife faced some financial crisis and requested the respondent No.1 to stop the construction for time being. The amount of Rs. 14,49,147/- was outstanding towards the construction done by respondent No.1. It is alleged that the present applicant No.1 gave cheque of Rs. 6,82,000/- dated 1/3/2006 drawn on ABN Amro Bank Ltd., Alkapuri, Baroda in favour of respondent No.1 J.B. construction in part discharge of the outstanding dues of Rs. 14,49,147/-. Respondent No.1 deposited the said cheque in his account for clearance but it was dishonoured with remarks "Insufficient Balance" and "Signature Differ". The demand notice as contemplated under section 138 was issued by respondent No.1 calling upon present applicant and his wife Bhavnaben to pay the amount of the dishonoured cheque. The notice was received by the present applicant, who replied to the demand notice but did not make the payment of the dishonoured cheque. Therefore, the complaint for the offence punishable under section 138 of the N.I. Act came to be filed in the Court of learned Chief Judicial Magistrate, Vadodara, which was registered as Criminal Case No.5601/2006 and process was issued against the present applicant and his wife Bhavnaben. The applicant has preferred present application under section 482 of the Code for quashment of this complaint. 3. Heard Mr. Bhadresh Raju, learned advocate for the applicant, Mr. Patel, learned advocate for respondent No.1 and Ms. Maithili Mehta, learned A.P.P. for the State. 4. Mr. The applicant has preferred present application under section 482 of the Code for quashment of this complaint. 3. Heard Mr. Bhadresh Raju, learned advocate for the applicant, Mr. Patel, learned advocate for respondent No.1 and Ms. Maithili Mehta, learned A.P.P. for the State. 4. Mr. Raju, learned advocate for the applicant has submitted that many grounds have been raised in the present petition for quashment of the complaint but he is confining his submissions only on one point i.e. the disputed cheque was issued by the wife of applicant under re-signature is in respect of bank account maintained by her. He would submit relying upon various judgments of the Apex Court and this Court that only the signatory i.e. the drawer of the cheque is criminally liable under section 138 of the N.I. Act. Therefore, he would urge that the present application may be allowed and the complaint qua the present applicant may be quashed. 5. On the other hand, Mr. Patel, learned advocate has vehemently submitted that there is a privity of contract between respondent No.1 on one hand and the applicant and his wife Bhavnaben on the other hand in respect of the construction contract of Ashram and therefore, in his submissions the appellant is necessary party accused. He would simultaneously submit that whether the drawer of the cheque alone is criminally liable or not can be determined only at the time of trial. Therefore, this petition may be dismissed. 6. On perusal of the complaint annexure A, it is found in para 5, that the respondent No.1 has stated that wife of the applicant – Bhavnaben, who is arrayed as accused No.1 in the criminal case had issued the dud cheque. Of course, it is also stated in that very paragraph that this construction work was undertaken at the instance of the applicant and his wife Bhavnaben and therefore, the wife of the applicant voluntarily took upon herself to make the part payment of the outstanding dues and accordingly gave the disputed cheque to respondent No.1. The Honourable Supreme Court in case of Jugesh Sehgal v. Shamsher Singh Gogi reported in 2009 (14) SCC 683 relied upon by learned advocate for the applicant has culled out ingredients of the offence i.e. punishable under section 138 of the Act as under in para 13: "13. The Honourable Supreme Court in case of Jugesh Sehgal v. Shamsher Singh Gogi reported in 2009 (14) SCC 683 relied upon by learned advocate for the applicant has culled out ingredients of the offence i.e. punishable under section 138 of the Act as under in para 13: "13. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled: (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. In case of P.J. Agro Tech Limited and Ors v. Water Base Ltd. reported in (2010) 12 SCC 146 , the Apex Court has held in para 13 as extracted below: "13. In case of P.J. Agro Tech Limited and Ors v. Water Base Ltd. reported in (2010) 12 SCC 146 , the Apex Court has held in para 13 as extracted below: "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." [See: 2008(1) G.L.H. 196 ] 8. As noted in the foregoing, there is no dispute that the disputed cheque was drawn by Bhavnaben in respect of bank account maintained by her with ABN Amro Bank. The ratio expounded by the Honourable Supreme Court for the above cited/afore-cited judgment relied upon by the learned advocate for the applicant is squarely applicable to the facts of the present case and therefore, the applicant could not have been made a party accused in the complaint. The submission of learned advocate for respondent No.1 that there is a privity of contract between respondent No.1 and the applicant and his wife and that the applicant is also equally liable and responsible for the outstanding dues of respondent No.1 can not be countenanced. The Honourable Apex Court in the aforesaid decision has explicitly held that the liability under section 138 of the N.I.Act is criminally liable and only the drawer of the cheque can be made liable for the penal action by giving strict interpretation of the penal provision of under section 138 of the Act. 9. The applicant may be necessary party in civil action for recovery of the outstanding amount but this being a criminal case, he cannot be made/named as accused in a criminal case by holding that he is a privy to contract and therefore, he is liable to make the payment in respect of the dishonour of the cheque. 10. 9. The applicant may be necessary party in civil action for recovery of the outstanding amount but this being a criminal case, he cannot be made/named as accused in a criminal case by holding that he is a privy to contract and therefore, he is liable to make the payment in respect of the dishonour of the cheque. 10. In view of the foregoing reasons, I find that learned Trial Magistrate has committed grave mistake in issuing process against the present applicant and if the criminal proceedings are permitted to continue against the applicant, it would tantamount to abuse of process of law. As a result, the present application deserves to be accepted and is accordingly allowed. The criminal case No.5601 of 2006 pending in the court of Chief Judicial Magistrate First Class, Baroda is hereby quashed qua the applicant. It is needless to say that the said criminal case so far as it relates to Mrs. Bhavana C. Patel i.e. wife of present applicant is not quashed and the same shall be decided strictly on merits as per the law. Application allowed.