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Madhya Pradesh High Court · body

2017 DIGILAW 343 (MP)

Vishal v. Bank of India

2017-03-08

VED PRAKASH SHARMA

body2017
ORDER 1. This is a petition under section 482 of the Code of Criminal Procedure, 1973 (for short 'the Code') for quashment of criminal complaint proceedings in Complaint Case No.62/2005 pending before the Court of Judicial Magistrate First Class, Indore against petitioner and 7 other persons including Rise and Infotech Ltd. - a company incorporated under the Companies Act. 2. The complaint has been filed by respondent/Bank for an offence under section 138 of Negotiable Instruments Act, 1881 (for short 'the Act') averring therein that cheque for a sum of Rs.18,10,000/- bearing No.676645, dated 28.8.2004 was issued by Lokendra Bandi shown as accused No.8 in the complaint towards discharge of legally enforceable liability which was eventually dishonoured by the Bank on 28.8.2004 on account of insufficient balance. Thereafter, a demand notice was issued by the Bank, however, Lokendra Bandi instead of paying the amount, vide a reply notice said to have been sent on 10.10.2004 (Copy Annexure P-6) sought time to pay the same. 3. It is submitted by learned counsel for the petitioner that liability under section 138 of 'the Act' is only against the drawer of the cheque who has failed to pay the amount under the cheque within the statutory period, despite a demand notice as stipulated under section 138 of 'the Act'. It is further submitted that in the instant case, cheque for Rs.18,10,000/- was issued by Lokendra Bandi in his personal capacity as averred in para-6 of the complaint, therefore, penal liability with regard to dishonour of the aforesaid cheque cannot by any stretch of imagination be fastened against the petitioner who is said to be a Director of Rise and Infotech Ltd. 4. Reliance in this regard is also placed on the decision of the apex Court in Jogesh Sehgal v. Shamsher Singh Gogi [ (2009)14 SCC 683 ]. 5. None has appeared on behalf of the respondent/Bank, despite due service of notice. 6. Arguments heard and record perused. 7. Section 138 of 'the Act' which is relevant, runs as under :- “138. Dishonour of cheque for insufficiency, etc., of funds in the account. 5. None has appeared on behalf of the respondent/Bank, despite due service of notice. 6. Arguments heard and record perused. 7. Section 138 of 'the Act' which is relevant, runs as under :- “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.”� 8. Explanation. For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.”� 8. As held by Hon’ble the apex Court in Jugesh Sehgal v. Shamsher Singh Gogi [ (2009)14 SCC 683 ], the following ingredients are required to be satisfied to fasten liability for an offence under section 138 of the ‘Act’ : 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. Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under section 138 of the Act.”� 9. As held by Hon’ble the apex Court in Mrs. Aparna A. Shah v. M/s. Sheth Developers Pvt. Ltd. [2014(1) MPHT 1 (SC)], under section 138 of ‘the Act’, it is only the drawer of the cheque who can be prosecuted. As held by Hon’ble the apex Court in Mrs. Aparna A. Shah v. M/s. Sheth Developers Pvt. Ltd. [2014(1) MPHT 1 (SC)], under section 138 of ‘the Act’, it is only the drawer of the cheque who can be prosecuted. The only exception is carved in section 141 of ‘the Act’, whereunder, vicarious liability can be fastened on a person connected with the company, who at the time of issuance of cheque was responsible to the company for the conduct of its business. 10. In the instant case, there is no averment that the petitioner is vicariously liable on behalf of respondent No.1, company because he was responsible for the conduct of the business of the company. On the contrary, in Para 6 of the petition, it has clearly been averred that the cheque in question was issued by Lokendra Bhati in his personal capacity. Therefore, the petitioner cannot be proceeded against under section 138 of ‘the Act’. 11. In view of the aforesaid, this petition deserves to be and is accordingly, hereby allowed and the proceedings in Complaint Case No.62/2005 pending before the Court of Judicial Magistrate First Class, Indore qua the petitioner are hereby quashed.