NEUTRAL CITATION
R/CR.MA/18356/2017 ORDER DATED: 21/09/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 18356 of 2017
With
R/CRIMINAL MISC.APPLICATION NO. 18357 of 2017
With
R/CRIMINAL MISC.APPLICATION NO. 18358 of 2017
With
R/CRIMINAL MISC.APPLICATION NO. 18360 of 2017
With
R/CRIMINAL MISC.APPLICATION NO. 18361 of 2017
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JAFARBHAI HASAMBHAI JAGA
Versus
STATE OF GUJARAT & 1 other(s)
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Appearance:
MR CHINTAN S POPAT(5004) for the Applicant(s) No. 1
MR DHAWAN JAYSWAL, APP for the Respondent(s) No. 1
RULE SERVED BY DS for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 21/09/2023
COMMON ORAL ORDER
1. All 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 Complaints Nos.823 of 2016, 824 of 2016, 825 of 2016, 827 of 2016 and 828 of 2016 respectively pending before the learned Judicial Magistrate First Class, at Okha Mandal, District Devbhumi Dwarka filed under the provisions of the Negotiable Instruments Act (`NI Act' for short). Page 1 of 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023
NEUTRAL CITATION R/CR.MA/18356/2017 ORDER DATED: 21/09/2023 undefined
2. As the common question of facts and law are involved in all these applications, at the request of learned advocates for the parties, they are heard together and disposed of by this common oral judgment.
3. The impugned complaints are filed for the dishonour of the cheques alleging that the complainant and present applicant and one another were in the business of fish, that the sea food was purchased from the respondent no.2 by the accused and the cheques were issued for the same; however, the same were dishonoured on their deposit and therefore, the impugned complaints, which are prayed to be quashed by way of these applications.
4. Heard learned advocate Mr.Popat for the applicant, learned APP Mr.Jayswal for respondent no.1-state. Though served, none appears for respondent no.2-complainant. 4.1 Learned advocate Mr.Popat for the applicant submitted that the applicant herein is neither the purchaser of the goods from the complainant nor the applicant is partner of the firm; that the applicant is relative of the accused no.2 and he stood as a witness in the memorandum of understanding made between the complainant and the original accused no.2, the applicant is falsely implicated in Page 2 of 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023 NEUTRAL CITATION R/CR.MA/18356/2017 ORDER DATED: 21/09/2023 undefined the offence; that the applicant is neither drawer nor signatory of the disputed cheque; that the cheque is signed by original accused no.2 and is issued from his account and therefore the present applicant is not at all liable for the same. He, therefore, submitted that these applications be allowed and the criminal complaints be quashed qua the applicant, as continuity of the same will amount to abuse of process of law and undue harassment to the applicant. 4.2 In support of his submissions, he placed reliance on the judgment in the case of Aparna A Shah V/s Sheth Developers Pvt.Ltd. And Ors., reported in (2013)8 SCC 71.
5. Per contra, learned APP Mr.Jayswal for respondent no.1-state has 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 and therefore, this Court should not exercise inherent powers under Section 482 of the Code, which otherwise, should be exercised sparingly. He submitted that the dispute is primarily of civil nature and for recovery of the amount due and therefore the proceedings are properly initiated against the applicant and the contentions taken by learned advocate for the applicant can be tested at the time of trial. However, he fairly submitted that as the complainant has not appeared Page 3 of 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023 NEUTRAL CITATION R/CR.MA/18356/2017 ORDER DATED: 21/09/2023 undefined though duly served, this Court may pass appropriate order considering the material available on the record.
6. I have considered the rival submissions and perused the material available 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 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023
NEUTRAL CITATION R/CR.MA/18356/2017 ORDER DATED: 21/09/2023 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. In view of the above provision which is invoked by the respondent no.2-complainant against the applicant, if the facts and material available on the record are seen, there is nothing to show that the applicant is the purchaser of the goods for which the cheques are alleged to have been issued; there is nothing to show that the applicant is the partner of the firm; that the applicant is not the signatory of the Page 5 of 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023 NEUTRAL CITATION R/CR.MA/18356/2017 ORDER DATED: 21/09/2023 undefined cheques; that the applicant is not the drawer of the cheques in question; that the cheques are not issued from the account of the applicant; that the applicant has not signed the agreement produced at page no.15 of the compilation in capacity of executor, but he has signed the same as a witness to the said agreement. The complainant has not remained present inspite of due service to him in these proceedings. Therefore, the ingredients of Section 138 of the NI Act are not satisfied.
9. In this factual background, if the settled legal proposition as laid down by the Hon'ble Apex Court in the case of Aparna A Shah (supra) is perused, it is held in paragraph nos.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 Page 6 of 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023 NEUTRAL CITATION R/CR.MA/18356/2017 ORDER DATED: 21/09/2023 undefined 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 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. Page 7 of 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023
NEUTRAL CITATION R/CR.MA/18356/2017 ORDER DATED: 21/09/2023 undefined 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."
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 Page 8 of 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023 NEUTRAL CITATION R/CR.MA/18356/2017 ORDER DATED: 21/09/2023 undefined 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 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. It is also relevant to refer to the judgment of the Hon'ble Apex Court in the case of Inder Mohan Goswami and Another versus State of Uttaranchal reported in (2007) 12 SCC 1, more particularly para : 23 & 24 thereof, which read as under :
"23. This Court in a number of cases has laid down the scope and ambit of courts' powers under Sec. 482 CrPC. Every High Court has inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to Page 9 of 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023 NEUTRAL CITATION R/CR.MA/18356/2017 ORDER DATED: 21/09/2023 undefined prevent abuse of the process of the court. Inherent power under Sec. 482 CrPC can be exercised:
[(i) to give effect to an order under the Code;] [(ii) to prevent abuse of the process of court, and] [(iii) to otherwise secure the ends of justice.]
24. Inherent powers under Sec. 482 CrPC though wide have to be exercised sparingly, carefully and with great caution and only when such exercise is justified by the tests specifically laid down in this section itself'. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the statute. Discussion of decided cases."
12. In view of above settled position of law and after considering the facts as alleged in the complaints and circumstances of the present case, as prima facie ingredients of Section 138 NI Act are not satisfied and the applicant is not liable, the continuation of further proceedings pursuant to the said complaints will cause greater hardships to the applicant and no fruitful purpose would be served if such Page 10 of 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023 NEUTRAL CITATION R/CR.MA/18356/2017 ORDER DATED: 21/09/2023 undefined further proceedings are allowed to be continued as the same are nothing but abuse of process of law. The Court must ensure that criminal proceedings is not used as instrument of harassment or for seeking private vendetta or with ulterior motive to pressurise accused or to settle the score.
13. Resultantly, all these applications are allowed. The Criminal Complaints Nos.823 of 2016, 824 of 2016, 825 of 2016, 827 of 2016 and 828 of 2016 respectively pending before the learned Judicial Magistrate First Class, at Okha Mandal, District Devbhumi Dwarka are hereby quashed and set aside qua the present applicant. Rule is made absolute. Direct service is permitted.
(SANDEEP N. BHATT,J) SRILATHA Page 11 of 11 Downloaded on : Mon Sep 25 20:38:11 IST 2023