ORDER
C.Y. Somayajulu, J.
1. Since both the petitions arise out of the same C.C. No. 125 of 2003 on the file of the Court of VII Additional Munsif Magistrate at Guntur, they are being disposed of by a common order.
2. Crl. P.No. 4811 of 2003 is filed by A-2 and A-4 and Crl. P. No. 5100 of 2003 is filed by A-3 in the aforesaid C.C. No. 125 of 2003 to quash the proceedings against them on the ground that they are not liable for punishment under Section 138 of Negotiable Instruments Act (for short ‘the Act’).
3. First respondent filed the aforesaid complaint under Section 138 of the Act alleging that the petitioners in these petitions and K.K. Raja Malleswara Rao (A-1) entered into an agreement to sell property measuring 325 square yards to him at the rate of Rs. 2750/- per sq. yd. and received Rs. 2,50,000/- as advance from him, but failed to register the land in his favour, but agreed to refund the amount received from him and accordingly A-1 on behalf of himself and the petitioners herein issued a cheque bearing No. 000063 dated 31-10-2002 drawn on ICICI Bank, Guntur to him. But it was dishonoured when he presented it in the Indian Overseas Bank, Chandamoulinagar branch on 13-2-2003 for payment by the ICICI Bank with an endorsement that there was no sufficient funds. When he brought that fact to the notice of A-1 and the petitioners, they requested him to represent the cheque. Believing their words he again presented the cheque on 3-3-2003 in the Indian Overseas Bank, Chandamoulinagar branch. But the same was also dishonoured as per memo dated 4-3-2003 of ICICI Bank received by him on 5-3-2003. Therefore, he got issued a notice to A-1 and the petitioners informing them about the dishonour of the cheque, with a demand to pay the amount covered by the dishonoured cheque. A-I, 1st petitioner in Crl. P. No. 4811 of 2003 and petitioners in Crl. P.No. 5100 of 2003 received the notices and sent a reply with false allegations and failed to pay the amount as demanded. 2nd petitioner in Crl. P. No. 4811 of 2003 refused to receive the notice. Since the petitioners and A-1 entered into the agreement to sell and the cheque was issued by A-1 on behalf of petitioners, petitioners also are liable for punishment under Section 138 of the Act.
4. The contention of the learned counsel for the petitioners is that since petitioners did not draw the cheque on any bank account in their name in favour of the first respondent they cannot be made liable for punishment under Section 138 of the Act, by placing reliance on E.V. Ramanarasaiah v. G. Gananeswar, (2002) 2 Andh LD (Cri) 188.
5. The contention of the learned counsel for the first respondent is that since A-1 and petitioners have been acting as partners, if not actual partners, and since the dishonoured cheque was issued by A-1 on behalf of all the petitioners also they also are liable to be punished under Section 138 of the Act. In Electronics Trade & Technology Development Corporation Ltd. v. Indian Technologists & Engineers (Electronics (P) Ltd.), the Supreme Court held Section 138 of the Act is intended to prevent dishonesty on the part of the drawer of negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a bank and induce the payee or holder in due course to act upon it.
6. Section 138 of the Act reads :
“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 provision of this Act, be punished with imprisonment for a term which may extend to one year, 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 fifteen 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.” (Under lining mine)
7. From a plain reading of the above Section it is clear that the offence under the said Section can be committed by the drawer of the cheque on an account maintained by him with a banker but not by any other person. Since ‘companies’ are artificial ‘persons’ and would be run by human beings. Section 141 of the Act lays down as to who would be liable for punishment if the offence under Section 138 of the Act is committed by a company.
8. As per Section 141 of the Act, when the offence under Section 138 of the Act is committed by a company, every person who, at the time of the commission of the offence was in charge of, and was responsible to the company for the conduct of its business, as well as the company, would be deemed to be guilty of the offence. As per explanation to Section 141 of the Act, company includes any body corporate, or firm or other association of individuals. Therefore, if the offence under Section 138 of the Act is committed by a company or firm, the directors or partners and other employees thereof who are in charge of and are responsible for the conduct of the business of the company or firm also would be liable for punishment for the offence under Section 138 of the Act)
9. In this Case the averments in the complaint do not disclose that the petitioners and A-1 are partners, or are carrying on business as association of individuals. Merely because A-1 and petitioners, who are the joint or co-owners of the property agreed to be sold, executed an agreement of sale, no presumption of partnership between them can be drawn, that too in the absence of a specific averment in the complaint that they as partners agreed to sell the property and executed the agreement.
10. Except Section 141 of the Act there is no other provision in Chapter XVII of the Act in which Sections 138 and 141 of the Act are contained, fastens criminal liability on a person other than the drawer of the cheque, for an offence under Section 138 of the Act. Therefore, even assuming that A-1 drew the cheque on behalf or at the behest of petitioners also, there can be no vicarious liability for them, because it is not even the case of the first respondent that A-1 and petitioners have a joint account in the bank and A-1 issued the cheque on such joint account.
11. So even if all the allegations in the complaint are taken to be true none of the petitioners can be said to have committed an offence under Section 138 of the Act and so the complaint against them is liable to be quashed.
12. Hence, the petitions are allowed and the proceedings in C.C.No. 125 of 2003 on the file of the VII Additional Munsif Magistrate, Guntur, against the petitioners are quashed.