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CR.MA/9273/2009 2/ 7 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL
MISC.APPLICATION No. 9273 of
2009
=========================================================
SURESHBHAI
K CHAUHAN & 1 - Applicant(s)
Versus
STATE
OF GUJARAT & 1 - Respondent(s)
=========================================================
Appearance
:
MR
MPSHAH for
Applicant(s) : 1 - 2.MS. KRUTI M SHAH for Applicant(s) : 1 - 2.
MR
KARTIK PANDYA, ASST. PUBLIC PROSECUTOR for Respondent(s) : 1,
RULE
SERVED for Respondent(s) : 2,
MR MEHUL SHARAD SHAH for
Respondent(s) :
2,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
Date
: 11/10/2010
ORAL
ORDER
1.0 Petitioners
are the original accused in Criminal Case No. 1491 of 2001, pending
before the learned Judicial Magistrate, First Class, Botad. The
complaint pertains to dishonour of a cheque, punishable under
Section-138 of the Negotiable Instruments Act, 1881(‘The Act’ for
short). Petitioners want the said complaint to be quashed on the
ground that they are neither signatories to the cheque in question
nor was the said cheque issued on behalf of the Company, wherein the
petitioners were responsible for the functioning of such Company.
2.0 Undisputed
facts are as follows:
2.1 The
original complainant, respondent No.2 herein, has lodged the
above-mentioned complaint for dishonour of a cheque dated 22.09.2001,
for an amount of Rs.1,51,448/-. The cheque in question is,
admittedly, singed by the original accused No.1, since deceased, and
not by the present petitioners.
2.2 The
case of the complainant, however, is that the accused had jointly
taken loan from him, for repayment of which the said cheque was
issued by accused No.1. Present petitioners are being involved on
the ground that they had given a ‘Promissory Note’ and had also given
it in writing that if the cheque in question is not honoured, they
shall be liable to pay the sum.
2.3 Upon
presentation of the said cheque before the Bank, same was returned as
unpaid, for ‘Insufficient Funds’. Thereupon, the complainant issued
notice for the offence punishable under Section-138 of the Act. No
reply was given to the said notice, by the petitioners. Thus, when
the statutory period was over, the complainant filed the impugned
complaint.
3.0 The
learned Counsel for the petitioner submitted that, since the
petitioners were not the signatories to the cheque and the cheque was
issued by accused No.1 in his personal capacity, the
question of vicarious liability would not arise.
4.0 On
the other hand, the learned Counsel for the complainant submitted
that the loan was taken by all the accused, jointly. The present
petitioners had agreed in writing to repay the amount, in case the
cheque is not honoured. He relied on the provisions of Sections-26
and 141 of the Act.
4.1 In
support of the above contentions, he relied on a decision of the Apex
Court in the case of I.C.D.S.
Ltd. Vs. Beena Shabeer & Another
reported in 2002(3) GLH 241.
4.2 He
further contended that in any case, such defence can be raised by the
petitioners before the trial Court and this quashing petition should
not be entertained.
5.0 I
have also heard learned APP, on behalf of respondent No.1-State.
6.0 In
view of the admitted facts that the petitioners
were not signatories to the cheque in question and that the cheque
was issued by accused
No.1 in his personal capacity, the question of vicarious liability of
the petitioners need to be examined.
6.1 Section-138
of the Act pertains to the offence of dishonour of cheque, issued for
discharging any debt or liability, for ‘Insufficient Funds’. This
section provides for punishment, in case the offence is proved.
Section-139 of the Act provides for rebutable presumption that,
unless the contrary is proved, the holder of a cheque received the
same in discharge of a debt or liability. Section-141 of the Act
pertains to the offence by companies and reads as follows:
141.
Offences by
Companies.-(1)
If the person committing an offence under section 138 is a company,
every person who, at the time the offence was committed, was in
charge of, and was responsible to the company for the conduct of the
business of the company, as well as the company, shall be deemed to
be guilty of the offence and shall be liable to be proceeded against
and punished accordingly:
Provided
that nothing contained in this sub-section
ender any person liable to punishment
if he proves that the offence was committed without his knowledge, or
that he had exercised all due diligence to prevent the commission of
such offence:
[Provided
further that where a person is nominated as a Director of a company
by virtue of his holding any officer or employment in the Central
Government or State Government or a financial corporation owned or
controlled by the Central Government or the State Government, as the
case may be, he shall not be liable for prosecution under this
Chapter.]
(2)
Notwithstanding anything contained in sub-section (1), where any
offence under this Act has been committed by a company and it is
proved that the offence has been committed with the consent or
connivance of, or is attributable, to any, neglect on the part of,
any director, manager, secretary or other officer of the company,
such director, manager, secretary or other officer shall also be
deemed to be guilty of that offence and shall be liable to be
proceeded against and punished accordingly.
6.2 Since,
the cheque in question was issued by accused No.1 in his personal
capacity, the question is, can it be stated that the offence is
committed by the Company, as defined under Section-141 of the Act.
The explanation to the said Section provides that the ‘Company’, for
the said purpose, means any ‘body corporate’ and includes
a ‘firm’ or ‘association’ of individuals.
6.3 In
the present case, admittedly, the cheque was not issued or signed on
behalf of any body
corporate or a firm. There is no allegation that the present
petitioners along with original accused No.1, formed an association
of individuals. Simply because, as alleged by the complainant, loan
was taken by all and the present petitioners also assured that the
cheque, upon presentation, will be cleared, that per
se
would not meant that the cheque was issued on behalf of association
of individuals.
6.4 In
that view of the matter, present case would not be covered under
Section 141 of the Act and the vicarious liability cannot be fastened
on the present petitioners. Section-26 of the Act pertains to a
situation, where a person capable of contracting, according to the
law to which he is subject, may bind himself and be bound by the
making, drawing, acceptance, indorsement, delivery and negotiation of
a promissory note, bill of exchange or cheque.
6.5 In
the absence of any signature, by the petitioners on the cheque, it is
doubtful whether Section-26
of the Act, would have any application. Even if, the petitioners had
subsequently
entered into a writing with the complainant, that by itself, by
virtue of the provisions contained in Section 26 of the Act, would
not bring them within the purview of Section
138 of the Act.
6.6 The
decision of the Apex Court in I.C.D.S.
Ltd. (Supra) was rendered in the background of the
facts, where the guarantors had themselves issued cheques, which were
dishonoured and for which they were being proceeded under Section-138
of the Act. In such a background, the Apex Court observed that the
High Court got carried away by the issue of liability of guarantors
and overlooked the true intent and purport of Section 138 of the Act.
The facts being entirely different, that decision would not apply in
the present case.
7.0 In
the result, I find that permitting further trial in such a criminal
case would result into unnecessary prolonging the litigation.
Criminal Case No. 149 of 2010, pending before the learned Judicial
Magistrate, First Class, Botad, is therefore, QUASHED. Rule
is made absolute.
(AKIL
KURESHI, J.)
Umesh/
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