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2016 DIGILAW 1372 (ALL)

Shivani Tyagi v. State of U. P.

2016-04-12

SUNEET KUMAR

body2016
JUDGMENT Suneet Kumar, J. Heard learned counsel for the applicant and learned A.G.A. This application filed under Section 482 Cr.P.C. seeks quashing of the Criminal Complaint Case No. 5 of 2014 (Prem Kumar and others Versus Shivani Tyagi), under Section 138 of Negotiable Instruments Act, 1881 (for short 'N.I. Act'), pending in the court of learned Metropolitan Magistrate-9, Kanpur Nagar. 2. The factual matrix of the case is that the opposite parties no. 2 to 5 filed a complaint against the applicant alleging that the accused persons are partners of a firm M/s Fashion Plus engaged in the business of ready made garments in brand name 'CAT 'N' LILL" & 'SONA'. As per the terms of the investor agreement the opposite party had to deposit Rs. 11,65000/- with the firm towards security for the material which would be provided by the franchise firm/company. The deposit was refundable. It is alleged that each of the opposite party paid their share towards security in cash. Subsequently, the accused persons closed their franchise and returned the security sum by issuing cheques to each of the opposite party for the same amount on 08 January 2013. On presentation, all the cheques were dishonored by the bank with an endorsement "fund not sufficient". A notice dated 15 January 2013 was issued to the accused persons by registered post. Upon non payment, complaint was filed on 11 February 2013. Learned Magistrate took cognizance on the same date and summoned the accused on 30 March 2013. 3. Learned counsel appearing for the applicant would submit (i) that the complaint as such is not maintainable as the cause of action i.e. the date of service of notice is not indicated in the complaint; (ii) there is no outstanding due or liability against the applicant; (iii) the notice is alleged to have been sent on 15 January 2013 and the complaint was filed on 11 February 2013 within 45 days thus being premature; (iv) the cheques were issued by the applicant who neither is the partner or proprietor of the firm, (v) cheques were issued refunding security and not for repayment of legally recoverable debt/liability. 4. As per Section 138 of N.I. Act, return of cheques by the drawee bank would alone constitute the commission of offence. 4. As per Section 138 of N.I. Act, return of cheques by the drawee bank would alone constitute the commission of offence. The ingredients of offence under Section 138 are (a) cheque is drawn by the accused on an account maintained by him with a banker, (b) the cheque amount is in discharge of a debt or liability, and (c) the cheque is returned unpaid for insufficiency of funds or that the amount exceeds the arrangement made with the bank, the offence stand committed the moment the cheque is returned unpaid. 5. Further steps laid down by way of the proviso are distinct from the ingredients of the offence which the enacting provisions creates and makes punishable. Thus, an offence within the contemplation of Section 138 is complete with the dishonour of the cheque, but taking cognizance of the same by any court is forbidden so long as the complainant does not have the cause of action to file the complaint in terms of clause (c) of the proviso read with Section 142 (Refer: Dashrath Rupsingh Rathod Versus State of Maharashtra, (2014) 9 SCC 129 and Vinay Kumar Shailendra Versus Delhi High Court Legal Services Committee, (2014) 10 SCC 708 , judgments rendered by Three-judge Bench.) 6. If the cheque is given towards any liability or debt which might have been incurred even by someone else, the person who is drawer of the cheque can be made liable under Section 138 of the Act. (Vide- Anil Sachar Versus Shree Nath Spinners Private Limited, (2011) 13 SCC 148 ) 7. In Vinita S. Rao Versus M/s. Essen Corporate Services Pvt. Ltd. & Anr., 2015 (1) SCC 527 , one of the question before the Court was whether the cheques were given as a security, or for the purpose of any legally recoverable dues. The question was left open to be decided by the High Court. But it can be inferred that the cheques issued for security purpose, upon dishonour, would not constitute an offence under Section 138 N.I. Act. 8. Similarly, where cheques were given towards advance payment, upon default, for non payment the drawer of the cheque cannot be proceeded against under N.I. Act. But it can be inferred that the cheques issued for security purpose, upon dishonour, would not constitute an offence under Section 138 N.I. Act. 8. Similarly, where cheques were given towards advance payment, upon default, for non payment the drawer of the cheque cannot be proceeded against under N.I. Act. (Vide- M/S Indus Airways (P) Ltd. and others Versus Magnum Aviation (P) Ltd., (2014) 12 SCC 539 ) In I.C.D.S. Limited Versus Beemna Shabeer and another, AIR 2002 SC 3014 , the question before the court was as to whether against a guarantor in proceedings under N.I. Act could be initiated for a cheque issued by the guarantor to liquidate the dues of the borrower. The Court in paras 10 and 11 held as follows: - "10. The language, however, has been rather specific as regards the intent of the legislature. The commencement of the Section stands with the words "Where any cheque". The above noted three words are of extreme significance, in particular, by reason of the user of the word "any" the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment. 11. The issue as regards the co-extensive liability of the guarantor and the principal debtor, in our view, is totally out of the purview of Section 138 of the Act, neither the same calls for any discussion therein. 11. The issue as regards the co-extensive liability of the guarantor and the principal debtor, in our view, is totally out of the purview of Section 138 of the Act, neither the same calls for any discussion therein. The language of the Statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of Section 138 of the Act: 'Any cheque' and 'other liability' are the two key expressions which stands as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the Statute. Any contra interpretation would defeat the intent of the legislature. The High Court, it seems, got carried away by the issue of guarantee and guarantor's liability and thus has overlooked the true intent and purport of Section 138 of the Act....." 9. The plea of the learned counsel for the applicant that the applicant is not a partner of the firm, therefore, would not be liable for the debt/liability of the firm is untenable in view of the authoritative pronouncements. The language of the statute is plain and clear, there cannot be any restriction or embargo in the matter of application of the provisions of Section 138 of N.I. Act. 10. A three-judge Bench of Supreme Court in Yogendra Pratap Singh Versus Savitri Pandey and another, (2014) 10 SCC 713 was called upon to consider (i) can cognizance of an offence punishable under Section 138 of Negotiable Instruments Act, 1881 be taken on the basis of a complaint filed before the expiry of the period of 15 days stipulated in the notice required to be served upon the drawer of the cheque in terms of Section 138. 11. The Court upon reviewing the earlier judgments rendered by the Supreme Court and scanning the judgments rendered by the High Courts answered the reference in para 36 which reads as under: - "................It is not the question of prematurity of the complaint where it is filed before expiry of 15 days from the date on which notice has been served on him, it is no complaint at all under law. As a matter of fact, Section 142 of the NI Act, inter alia, creates a legal bar on the Court from taking cognizance of an offence under Section 138 except upon a written complaint. Since a complaint filed under Section 138 of the NI Act before the expiry of 15 days from the date on which the notice has been served on the drawer/accused is no complaint in the eye of law, obviously, no cognizance of an offence can be taken on the basis of such complaint. Merely because at the time of taking cognizance by the Court, the period of 15 days has expired from the date on which notice has been served on the drawer/accused, the Court is not clothed with the jurisdiction to take cognizance of an offence under Section 138 on a complaint filed before the expiry of 15 days from the date of receipt of notice by the drawer of the cheque." 12. Upon answering the question in the negative the consequential question arose as to whether the complainant be permitted to bring the complaint again not notwithstanding the fact that the period of one month stipulated under Section 142 (b) for filing of such a complaint has expired. The Court answered the question in para 42, wherein, it is held "......As we have already held that a complaint filed before the expiry of 15 days from the date of receipt of notice issued under clause (c) of the proviso to Section 138 is not maintainable, the complainant cannot be permitted to present the very same complaint at any later stage. His remedy is only to file a fresh complaint; and if the same could not be filed within the time prescribed under Section 142(b), his recourse is to seek the benefit of the proviso, satisfying the Court of sufficient cause. Question (ii) is answered accordingly." 13. The crucial date for computing the period of limitation is the date of the filing of the complaint or initiating criminal proceedings and not the date of taking cognizance by the Magistrate (Vide Indra Kumar Patodia Versus Reliance Industries Ltd. (2012) 13 SCC 1 ). 14. Applying the law on the facts of the present case, it is admitted by the applicant that the cheques were drawn from an account maintained by her to the banker, upon presentation, the cheques were returned unpaid for insufficiency of fund. 14. Applying the law on the facts of the present case, it is admitted by the applicant that the cheques were drawn from an account maintained by her to the banker, upon presentation, the cheques were returned unpaid for insufficiency of fund. The plea that the applicant is neither a partner or an employee of the firm, further, the cheques were not issued in discharge of a debt or liability against her, is misconceived and untenable. The N.I. Act nowhere contemplates that the drawer of the cheque can only issue a cheque in discharge of any debt or liability. There cannot be any such restriction or embargo in the matter of application of provisions of Section 138 of N.I. Act. Therefore, in my opinion, the applicant would be liable to face the consequences ensuing upon the dishonour of the cheque. 15. Next point to be considered is as to whether the cheque were issued for security or for the discharge of debt or liability. In the complaint, it is alleged that on depositing security in cash while engaging with the firm the firm withdrew from the business, thereafter, the security sum was to be returned for which the applicant issued the cheques from an account maintained by her, therefore, it cannot be stated that the cheques were issued as security, but on the contrary, it was refund of the sum deposited towards security,, which would, in my opinion, is liability which is legally recoverable. The application being devoid of merit is accordingly dismissed.