Andhra Pradesh High Court - Amravati
Syed Bajuddin vs M. Muralidhar on 8 February, 2024
THE HON'BLE SRI JUSTICE TARLADA RAJASEKHAR RAO
CRIMINAL PETITION No. 13966 OF 2018
ORDER:
The present Criminal Petition is filed to call for the
record pertaining to C.C. No. 129 of 2012 on the file of the I
Additional Judicial Magistrate of First Class at Proddatur and
to quash the same, which is filed by the complainant for the
offence under Sections 138 and 142 of the Negotiable
Instruments Act, 1881 (for short, "the Act").
2. Succinctly, the facts of the case are that the complainant
has approached the accused No.1 in a business transaction to
supply old iron scrap. The accused No.1 demanded an
advance amount for supply of the iron scrap. Accordingly, the
complainant paid an amount of Rs.20,00,000/- by way of
cheque bearing No.037884 drawn on Axis Bank, Proddatur.
The accused no.1 informed the complainant that old iron
scrap will be supplied through accused No.2 i.e. ALLA INC
Company represented by Syed Bajuddin and requested the
complainant to issue cheque in the name of
Petitioner/AccusedNo.2 i.e. ALLA INC Company Syed
Bajuddin. Accordingly, the complainant issued cheque in
favour of the petitioner/accused No.2. As the petitioner has
not supplied the old iron scrap as agreed, the complainant
demanded to return the advance amount and on repeated
demands, the accused no.1 issued cheque bearing No.701682
dated 26.06.2011 for an amount of Rs.18,00,000/-. The same
was presented in the complainant's bank and it was bounced
on the ground that "funds insufficient. On the request of the
accused no.1, the complainant has re-presented the cheque
for twice, even though, the cheque was bounced due to "funds
insufficient". Following due procedure as contemplated under
the Act, a complainant was lodged. The Court below took
cognizance for the offence under Sections 138 and 142 of the
Act and issued summons to the accused.
3. The said complaint is assailed in the present Criminal
Petition by the petitioner herein/accused no.2 on the ground
that the cheque was not issued by the accused no.2 and the
same was issued by the accused no.1 and contended that
there is no vicarious liability. Drawer of the cheque only liable
for the transaction if any and relied on the judgment of the
Hon'ble Apex Court in Aparna A. Shah v. Sheth Developers
Private Limited and another1 for the aforesaid proposition.
Relevant portion of the judgment is reproduced herein:
"28. We also hold that under Section 138 of the NI
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 NI Act which would have no application
in the case on hand. The proceedings filed under
Section 138 cannot be used as 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
the dishonor of a cheque can, in no case "except in
case of Section 141 of the NI 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
1 (2013) 8 SCC 71
that only after issueance 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."
4. Heard learned counsel for the petitioner and learned
counsel for the respondents.
5. Learned counsel for the petitioner would submit that
there can be no vicarious liability, if any liability is for the
bouncing of cheque is against accused no.1 and therefore he
would urge to quash the proceedings against petitioner
herein/accused no.2 in C.C. No.129, relying on supra referred
judgment in support of the contention raised.
6. Learned counsel for the respondents would contend that
both the accused i.e. A1 and A2 in the complaint, have
colluded and they have cheated the complainant and the
complainant has paid an amount of Rs.20,00,000/- (Rupees
twenty lakhs only) by way of cheque to the petitioner/accused
No.2 herein and the 1st accused has issued the cheque on
behalf of Accused No.2. Therefore, he would contend that he
has also liable for the bouncing of the cheque and he would
further submit that the judgment of the Hon'ble Apex Court
relied by the petitioner/Accused No.2 is not applicable to the
present facts of the case and he would urge this Court to
dismiss the Criminal Petition.
7. From the above rivalry arguments advanced by learned
counsel for both parties, the legal points that arise for
consideration in this petition are, whether the summoning
order issued by the learned magistrate against the
petitioner/accused No. 2 is sustainable?, and whether the
petitioner can be held vicarious liability for the offences
committed.
8. It is settled law that the person who has drawn the
cheque on an account maintaining by him alone is liable in
the event of bouncing of the cheque later. And the judgment
relied by learned counsel for the petitioner is squarely
applicable to the present facts of the case. In this case, the
cheque was not issued by the petitioner/accused No.2.
9. As held by the Hon'ble Supreme Court in National Small
Industries Corp. Ltd v. Harmeet Singh Paintal 2 had occasion to
review the entire case law on the subject regarding vicarious
liability of the directors of a company in regard to offence
under Sections 138, 141 of the Act. The primary
responsibility is on the complainant to make specific
averments as required under the law and the complaint. So
as to make the accused vicarious liable for passing the
criminal liability. Vicarious liability on the part of a person
must be pleaded and proved. In the present case the
complainant has not pleaded how the petitioner/accused is
liable to be prosecuted for the offence under Sections 138 and
141 N.I. Act, as he is not a drawer of the cheque.
10. Therefore, the present Criminal Petition is allowed and
the complainant/respondent is at liberty to proceed against
the accused No.1 who is not before this Court and the Court
below is also directed to be more vigilant while disposing of the
case and it appears that both the accused have colluded and
in order to cheat the complainant herein have issued cheque
2 JT 2010 2 SC 161
in the name of the 1st accused, where the money was
advanced and received by the petitioner accused No.2.
11. Accordingly, the Criminal Petition is allowed and the
proceedings against the Petitioner/Accused No.2 herein, are
hereby quashed and the Court below is directed to proceed
against accused No.1, who is not before this Court, in
accordance with law.
As a sequel, interlocutory applications, if any pending in
this Criminal Petition shall stand closed.
________________________________________
JUSTICE TARLADA RAJASEKHAR RAO
Date: 08.02.2024
HARIN
THE HON'BLE SRI JUSTICE TARLADA RAJASEKHARA RAO
Crl.P No.13966 OF 2018
Date: 08-02-2024
Harin
