Justice R.K. Pattanaik observed that only the drawer of the cheque can be held liable u/s 138 of the NI Act, but if there is a joint account and all the holders have signed the cheque then all of them will be liable, and therefore the court below was directed to examine if the cheque was signed by the petitioner or only the wife who is the drawer of the cheque.
Brief Facts:
The current petition has been filed under Section 482 CrPC for quashing the criminal proceedings and consequential orders because the petitioner is not the drawer of the cheques and there is no legally enforceable debt against him.
The petitioner has contended that even if the uncontroverted allegations in the complaint are considered, no prima facie case is made against him as he has not drawn the cheques but the learned court below has lost sight of it and took cognizance of the offense.
The opposite party had filed a complaint against the petitioner as well as his wife for the dishonor of the cheque issued by them. The petitioner’s wife had received the alleged amount for opening a business and when it was returned with the alleged cheques, both of them bounced back due to insufficient funds. The petitioner has been made an accused because it is alleged that he was looking after the business and the cheques were issued by both him and his wife, therefore both are liable for the debt, and since the cheques stood dishonored, an offense under Section 138 of N.I. Act was committed by them
Contentions of the petitioner:
It is contended by the Learned counsel for the petitioner, that the petitioner is not a drawer of the cheques and he could not have been arrayed as an accused. Then the cases of Harshad Manubhai Malavaiya Vs. State of Gujarat and Alka Khandu Avhad Vs. Mr. Amar Syamprasad Mishra and Others have been referred by the petitioner’s side and it was further submitted that the petitioner cannot be made liable on any such ground even with the aid of Section 141 of N.I. Act, more fully when he is not the drawer of the cheques.
Contentions of the Respondent:
The learned counsel for the opposite party contended that the cheques were signed by the petitioner and his wife and therefore, both of them have been arrayed as accused persons. Further, it was submitted that the former was looking after and was primarily responsible for running the business though the latter entered into an agreement with the complainant.
Observations of the Court:
the court then noted the observations made by the Gujrat High Court in the Hrshad Manubhai Malavaiya case, where it was held that the prosecution under Section 138 of the NI Act can only be initiated against the drawer of the cheque and since in that case the petitioner had not signed the cheque and it was signed by his wife, it was held that no liability can be fastened on him. It was also observed in the case that under section 138 NI Act, the drawer of the cheque only is liable to be prosecuted and not any other person unless the cheque has been signed by each and every person, who is a joint account holder. In the present case, since the cheque has been alleged to be signed by the petitioner as well, the lower court should examine the aspect of whether the petitioner and his wife had a joint account at the relevant point in time.
Then the court examined the Alka Khandu Avhad case, where it was held that individuals cannot be held liable for the alleged offense with the assistance of section 141 NI Act and the word ‘company’ as appearing in Section 141 of N.I. Act means anybody corporate and includes a firm or other association individuals excluding the joint liability of two or more persons and does not fall within the expression ‘other association of individuals.
Then it was concluded by the court that since there is an objection that the cheques have both the husband and wife’s signatures, the same has to be examined by the court below during inquiry and the liability of the petitioner cannot be avoided on the ground that the other accused wife was the signatory to the agreement executed for the purpose of the business transaction if it is proven that he had also signed the cheques.
The Decision of the Court:
The CRLMCs were disposed and liberty was given to the petitioner to seek discharge on the grounds so urged later on.
Case Title: Ashis Mohanty v. State of Odisha and others
Coram: Justice R.K. Pattanaik
Case No.: CRLMC No. 739 of 2021 AND 738 of 2021
Advocates for the Petitioners: Mr. Samvit Mohanty, Advocate
Advocate for the Respondents: ASC for State-OP No.1; Mr. Partha Sarathi Nayak, Advocate for O.P.No.2
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