Research › Search › Judgment

Karnataka High Court · body

2020 DIGILAW 25 (KAR)

Bhavana S. v. Janatha Seva Co-operative Bank Ltd.

2020-01-03

B.A.PATIL

body2020
JUDGMENT 1. This petition has been filed by petitioner-accused No.1 under Section 482 of Cr.P.C. to quash the proceedings in C.C.No.10558/2019 pending on the file of XXVI Additional Chief Metropolitan Magistrate Court, Bengaluru, for the offence punishable under Section 138 of the Negotiable Instruments Act only in respect of petitioner-accused No.1. 2. I have heard the learned counsel for the petitioner-accused No.1 and the learned counsel for respondent-complainant. 3. Though this case is listed for admission, with consent of the learned counsel appearing for the parties, same is taken up for final disposal. 4. The factual matrix of the case are that the respondent Janatha Seva Co-operative Bank Limited submitted a complaint under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the Act for short) alleging that the accused persons were the customers of the said bank. In the month of May 2016, accused approached the complainant for business loan of rupees ten Crores and jointly submitted a loan application for availing the said loan. Respondent-Bank sanctioned the loan of rupees ten Crores. The said loan amount was repayable in 120 months with interest at 13% + 2% penal interest on overdue installment. An undertaking was also given by the accused for discharge of the said loan. There was irregularity in payment of the said loan. Complainant has sent a notice. Accused No.2 issued the cheque on 01.4.2019 bearing No.000125 dated 30.3.2019 for a sum of rupees two Crores and when the said cheque was presented, the same was dishonoured with the shara funds insufficient on 3.4.2019. Accused promised to repay the said loan amount and demand notice was issued on 9.4.2019 and it was served on the accused on 10.4.2019. Accused did not respond and as such a complaint was registered. 5. The learned Magistrate after taking into consideration the said facts and circumstances took cognizance and accused Nos.1 and 2 appeared. Now accused No.1 is appeared before this Court challenging the said cognizance taken as against her. 6. The main contention raised by the learned counsel for the petitioner-accused No.1 is that petitioner-accused No.1 neither issued the cheque nor the cheque which has been issued is pertaining to her account and she is not the signatory to the said cheque. Under such circumstances, the provisions of Section 138 of the Act are not attracted. 6. The main contention raised by the learned counsel for the petitioner-accused No.1 is that petitioner-accused No.1 neither issued the cheque nor the cheque which has been issued is pertaining to her account and she is not the signatory to the said cheque. Under such circumstances, the provisions of Section 138 of the Act are not attracted. It is his further submission that if the ingredients are satisfied then a person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act. In the instant case, none of the ingredients has been satisfied by the complainant as against accused No.1. In order to substantiate his said contention he has relied upon the decision in the case of Jugesh Sehgal v. Shamsher Singh Gogi reported in (2009) 14 SCC 683 . It is his further submission that they have availed a loan of rupees ten Crores and they have already cleared rupees eight Crores and they are ready to repay the remaining rupees two Crores, but they required some more time. He also submits that it is the liability of accused No.2 insofar as for the offence under Section 138 of the Act is concerned, but insofar as civil liability and for recovery of the amount is concerned he admits that both petitioners are jointly liable to pay the said amount. The remedy available is left open to the complainant as contemplated under a civil law. He further submitted that instead of proceeding as against petitioner under civil law, he has taken a wrong steps under Section 138 of the Act. In that light he submits that there is abuse of process of law. In that light, he prays to allow the petition and to quash the proceedings insofar the petitioner-accused No.1 is concerned. 7. Per contra, the learned counsel for the respondent-complainant vehemently argued and submitted that it is the petitioners-accused Nos.1 and 2 availed the loan and the liability is co-extensive. It is his further submission that the account extract and other material, if they are looked into, it goes to show that accused No.1 is also liable to be punished under Section 138 of the Act. It is his further submission that the loan application has been submitted by accused Nos.1 and 2 jointly and the loan has also been availed jointly and the liability is also joint. It is his further submission that the loan application has been submitted by accused Nos.1 and 2 jointly and the loan has also been availed jointly and the liability is also joint. In that light accused No.1 is also liable to be convicted for the offence punishable under Section 138 of the Act and by taking into consideration the said aspect the learned Magistrate has taken the cognizance and has issued the summons and accused No.1 has also appeared before the Court below. It is his further submission that accused No.2 is also admitted his liability, but only he is seeking time. On these grounds he prayed to dismiss the petition. 8. I have carefully and cautiously gone through the submissions made by the learned counsels appearing for the parties and perused the records. 9. It is an admitted fact that the cheque belongs to the account of accused No.2 and it bears the signature of accused No.2. It is manifest that, to constitute an offence under Section 138 of the Act the following ingredients are required to be fulfilled. 9. It is an admitted fact that the cheque belongs to the account of accused No.2 and it bears the signature of accused No.2. 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. 10. This point of law came up before the Honble Apex Court in the case of Jugesh Sehgal quoted supra. At paragraph 13 it has been held that it is only when all the aforementioned ingredients are satisfied the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act. 11. On careful perusal of the factual matrix of the case, admittedly the cheque belongs to accused No.2 and account is also held by him and the same has been presented by him and nowhere the signature of accused No.1 is found nor the said account belongs to accused No.1. 11. On careful perusal of the factual matrix of the case, admittedly the cheque belongs to accused No.2 and account is also held by him and the same has been presented by him and nowhere the signature of accused No.1 is found nor the said account belongs to accused No.1. Under such circumstances, I am of the considered opinion that the proceedings initiated under Section 138 of the Act insofar the petitioner-accused No.1 is concerned, it is nothing but abuse of process of law. 12. I am conscious of the fact that insofar as the civil liability is concerned, both accused Nos.1 and 2 are jointly liable to discharge the said loan, if any civil litigations or proceedings have been initiated against both accused Nos.1 and 2. But insofar as the criminal proceedings initiated under Section 138 of the Act is concerned, until and unless the ingredients mentioned under Section 138 of the Act are satisfied, the proceedings initiated are not sustainable in law. In that light, the petitioner-accused No.1 has made out a case to quash the proceedings. 13. In that light, the petition is allowed and the proceedings initiated insofar as petitioner-accused No.1 in C.C.No.10558/2019 pending on the file of XXVI Additional Chief Metropolitan Magistrate Court, Bengaluru, are quashed. It is made clear that the trial Court can proceed as against accused No.2 is concerned, in accordance with law. With the above observation the petition is disposed of. IA No.1/2019 does not survive for consideration and the same is accordingly disposed of.