NEUTRAL CITATION
R/CR.MA/21006/2018 ORDER DATED: 24/08/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 21006 of 2018
With
R/CRIMINAL MISC.APPLICATION NO. 21009 of 2018
With
R/CRIMINAL MISC.APPLICATION NO. 21011 of 2018
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SADHNABEN MANUBHAI PATEL
Versus
STATE OF GUJARAT & 1 other(s)
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Appearance:
MR HARDIK H DAVE(6295) for the Applicant(s) No. 1
MR HASIT H JOSHI(2480) for the Respondent(s) No. 2
MR DHAWAN JAYSWAL, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 24/08/2023
COMMON ORAL ORDER
1. These applications are filed under Section 482 of the Code of Criminal Procedure, 1973 (`the Code' for short) for quashing and setting aside the complaints being Criminal Case Nos.1737 of 2018, 1738 of 2018 and nd 1736 of 2018 respectively pending in the Court of 2 Additional JMFC, Vapi filed under the provisions of the Negotiable Instruments Act (`NI Act' for short).
2. The facts giving rise to filing of these applications are such that the complainant-respondent no.2 herein has filed the impugned complaints stating Page 1 of 9 Downloaded on : Sun Sep 17 02:25:12 IST 2023 NEUTRAL CITATION R/CR.MA/21006/2018 ORDER DATED: 24/08/2023 undefined that the complainant had entered into an agreement to purchase three plots from the husband of the present applicant who is the accused no.1; that subsequently the complainant came to know that the husband of the applicant does not have a clear title and therefore, asked to return back the amount of consideration and promissory note was given by the accused no.1 and cheques were given from the account wherein the applicant is also a joint holder; the said cheques got dishonoured with the endorsement of `funds insufficient'; notice was issued by the complainant and the impugned complaints are filed, which are prayed to be quashed by way of these applications.
3. Heard learned advocates for the parties. 3.1 Learned advocate Mr.Dave for the applicant submitted that the cheques have been signed by the husband of the applicant-original accused no.1 and no liability can be fastened upon the applicant herein for the dishonour of the cheques as only the drawer of the cheques can be prosecuted and in this case, the present applicant is not the drawer of the cheques. He submitted Page 2 of 9 Downloaded on : Sun Sep 17 02:25:12 IST 2023 NEUTRAL CITATION R/CR.MA/21006/2018 ORDER DATED: 24/08/2023 undefined that even in the complaint, the complainant has categorically narrated that the transaction has taken place between the complainant and the original accused no.1 i.e. husband of the applicant and there is no privity of contract between the applicant and the complainant. He submitted that the promissory note and the cheques were signed by husband of the applicant and not by the applicant. He, therefore, prayed to allow these applications as no ingredients under Section 138 of the NI Act are made out qua the applicant.
4. Per contra, learned APP Mr.Jayswal for respondent no.1-state and learned advocate Mr.Joshi for the respondent no.2-complainant have objected these applications and submitted that this Court should not exercise its powers by interfering with the proceedings of recovery of amount and the proceedings initiated under Section 138 of the Act are perfectly justified.
5. Learned advocate Mr.Joshi further submitted that the cheques in question are issued from the joint account of the applicant and her husband and therefore she cannot plead that she is not responsible for the said dishonour of the cheques. He, therefore, prayed to Page 3 of 9 Downloaded on : Sun Sep 17 02:25:12 IST 2023 NEUTRAL CITATION R/CR.MA/21006/2018 ORDER DATED: 24/08/2023 undefined dismiss these applications.
6. I have considered the rival submissions and perused the material on record.
7. At the outset, the provisions of Sections 138 of the NI Act are required to be seen, which read 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 extend to two year", or with fine which may extend to twice the amount of the cheque, or with both:Page 4 of 9 Downloaded on : Sun Sep 17 02:25:12 IST 2023
NEUTRAL CITATION R/CR.MA/21006/2018 ORDER DATED: 24/08/2023 undefined 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 induce 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 cheques 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 purpose of this section, "debt or other liability"
means a legally enforceable debt or other liability."
8. Now, if the facts of the present case are perused, it transpires from the record that the cheques were issued by the husband of the applicant herein. Though the cheques are issued from the joint account, they are not signed by the applicant. The applicant cannot be held liable for the offence under Section 138 of the NI Act only for the reason that she is the wife of Page 5 of 9 Downloaded on : Sun Sep 17 02:25:12 IST 2023 NEUTRAL CITATION R/CR.MA/21006/2018 ORDER DATED: 24/08/2023 undefined the signatory. Section 138 of the NI Act clearly envisages that the drawer of the cheque is responsible for the offence. In this case the drawer of the cheque is husband of the applicant and not the applicant.
9. In the case of Aparna A Shah V/s Sheth Developers Pvt.Ltd. And Ors., reported in (2013)8 SCC 71 relied on by learned advocate for the applicant, it is held in paragraphs 27 and 28 as under:
"27) In the light of the above discussion, we hold that under Section 138 of the Act, it is only the drawer of the cheque who can be prosecuted. In the case on hand, admittedly, the appellant is not a drawer of the cheque and she has not signed the same. A copy of the cheque was brought to our notice, though it contains name of the appellant and her husband, the fact remains that her husband alone put his signature. In addition to the same, a bare reading of the complaint as also the affidavit of examination-in- chief of the complainant and a bare look at the cheque would show that the appellant has not signed the cheque.
28) We also hold that under Section 138 of the N.I. Act, in case of issuance of cheque from joint accounts, a joint account holder cannot be prosecuted unless the cheque has Page 6 of 9 Downloaded on : Sun Sep 17 02:25:12 IST 2023 NEUTRAL CITATION R/CR.MA/21006/2018 ORDER DATED: 24/08/2023 undefined been signed by each and every person who is a joint account holder. The said principle is an exception to Section 141 of the N.I. Act which would have no application in the case on hand. The proceedings filed under Section 138 cannot be used as an arm twisting tactics to recover the amount allegedly due from the appellant. It cannot be said that the complainant has no remedy against the appellant but certainly not under Section 138. The culpability attached to dishonour of a cheque can, in no case "except in case of Section 141 of the N.I. Act" be extended to those on whose behalf the cheque is issued. This Court reiterates that it is only the drawer of the cheque who can be made an accused in any proceeding under Section 138 of the Act. Even the High Court has specifically recorded the stand of the appellant that she was not the signatory of the cheque but rejected the contention that the amount was not due and payable by her solely on the ground that the trial is in progress. It is to be noted that only after issuance of process, a person can approach the High Court seeking quashing of the same on various grounds available to him. Accordingly, the High Court was clearly wrong in holding that the prayer of the appellant cannot even be considered. Further, the High Court itself has directed the Magistrate to carry out the process of admission/denial of documents. In such circumstances, it cannot be concluded that the trial is in advanced stage."
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NEUTRAL CITATION R/CR.MA/21006/2018 ORDER DATED: 24/08/2023 undefined
10. It is also fruitful to refer to the judgment in case of Alka Khandu Avhad V/s Amar Syamprasad Mishra reported in (2021)4 SCC 675, equivalent citation is AIR Online 2021 SC 124, wherein it is held in paragraphs 7,8 and 8.1 as under:
"7. On a fair reading of Section 138 of the NI Act, before a person can be prosecuted, the following conditions are required to be satisfied:
i) that the cheque is drawn by a person and on an account maintained by him with a banker;
ii) for the 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; and
iii) the said cheque 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.
Therefore, a person who is the signatory to the cheque and the cheque is drawn by that person on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned by the bank unpaid, such person can be said to have committed an offence. Section 138 of the NI Act does not speak about the joint liability. Even in case of a joint liability, in case of Page 8 of 9 Downloaded on : Sun Sep 17 02:25:12 IST 2023 NEUTRAL CITATION R/CR.MA/21006/2018 ORDER DATED: 24/08/2023 undefined individual persons, a person other than a person who has drawn the cheque on an account maintained by him, cannot be prosecuted for the offence under Section 138 of the NI Act. A person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque."
11. The facts of the judgment in the case of Sunil Todi and others V/s State of Gujarat and another reported in AIR 2022 SC 147, relied on by learned advocate for respondent no.2 are different from the facts of the present case and therefore it is not helpful to the case of the respondent no.2-complainant.
12. In view of the above discussion, this application is allowed. Criminal Case Nos.1737 of 2018, 1738 of 2018 and 1736 of 2018 respectively pending in nd the Court of 2 Additional JMFC, Vapi are hereby quashed and set aside qua the present applicant. Direct service is permitted. However, the proceedings against the other accused be proceeded expeditiously by the learned trial Court.
(SANDEEP N. BHATT,J) SRILATHA Page 9 of 9 Downloaded on : Sun Sep 17 02:25:12 IST 2023