Bombay High Court

Monica W/O Nirav Shah vs The Dharampeth Mahila Multi State ... on 6 May, 2024

Author: M. W. Chandwani

Bench: M. W. Chandwani

2024:BHC-NAG:5504


                                                                                                                       J Cr. WP-186-2024.odt
                                                                      1
               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         NAGPUR BENCH, NAGPUR.
                        CRIMINAL WRIT PETITION NO.186 OF 2024
              PETITIONER                                :          Mrs. Monica W/o Nirav Shah,
                                                                   Aged 46 years, Occ. Housewife,
                                                                   Presently R/o 4, Pushpa Barkha, 97 S V
                                                                   Road, Thar West, Mumbai.
                                                                                 (ORI ACCUSED NO. 2)
                                                                   ..VERSUS..
              RESPONDENT                                :          The Dharampeth Mahila Multi
                                                                   State Co-Operative Society Ltd,
                                                                   Nagpur (Earlier Known as The
                                                                   Dharampeth Mahila Urban Credit Co
                                                                   Operative Society Ltd.) having its head
                                                                   office at Swamy Arcade, Laxmi Bhawan
                                                                   Chowk, West High Court Road,
                                                                   Dharampeth, Nagpur- 10 through its
                                                                   court agent Shri Rajesh Nilkantrao
                                                                   Sathwane aged about 55 Yrs, Occ
                                                                   service, R/o Nagpur.
                                                                                             (ORI COMPLAINANT)
                -----------------------------------------------------------------------------------------
              ------------------------------------------------------------------------------------------------------------------------------------
                       Mr S. S. Sitani, Advocate for Petitioner.
                       Mr A. Tripathi, Advocate for Respondent.
              ------------------------------------------------------------------------------------------------------------

                        CORAM : M. W. CHANDWANI, J.
                        DATE               : 6th MAY, 2024.


                    ORAL JUDGMENT

. Heard.

2. Rule. Rule made returnable forthwith. Heard finally by

consent of the learned counsels appearing for the parties.

TAMBE J Cr. WP-186-2024.odt

3. The petition seeks quashing and setting aside of the

order dated 13.04.2017 passed below Exhibit-1 by the learned

Judicial Magistrate First Class, Nagpur, in S.C.C. No.16088 of

2016, thereby issuing process against the petitioner for the offence

punishable under Section 138 of the Negotiable Instruments Act,

1881.

4. Shorning of unnecessary details, the case is as follows :

The respondent - State Co-operative Society Limited,

Nagpur, filed a criminal complaint bearing S.C.C. No.16088 of

2016 against the petitioner as well as her husband for the offence

punishable under Section 138 of the Negotiable Instruments Act,

1881 (for short, "the N.I. Act"). The Co-operative Society had

advanced a loan to the tune of Rs.2,75,00,000/- to the husband of

the petitioner. The petitioner as well as one Mr Vishal Tilakraj

Malik stood guarantors to the said loan transaction. It is further

submitted that the husband of the petitioner issued a cheque

bearing No.003542 dated 10.08.2016 amounting to

Rs.10,00,000/- drawn on Kotak Mahindra Bank, Santacruz (W),

Mumbai, signed by him being joint account holder alongwith the

TAMBE J Cr. WP-186-2024.odt

petitioner, which came to be dishonoured. In-spite of issuance of

statutory notice, the petitioner, her husband and Vishal did not

pay the amount, therefore, the aforesaid complaint came to be

filed against them. The learned Trial Court issued the process

against the petitioner and her husband and drafted the

proceedings against Vishal. Feeling aggrieved with the order of

issuance of process, the present petition came to be filed.

5. Mr S. S. Sitani, learned counsel appearing for the

petitioner, would submit that the petitioner is the wife of

Mr Nirav Pravin Shah, who allegedly took a loan to the tune of

Rs.2,75,00,000/- from the respondent - Co-operative Society.

The petitioner and her husband are the joint account holder in

Kotak Mahindra Bank. The cheque in question is signed by the

husband of the petitioner. The petitioner is not a signatory to the

said cheque in question. Just because the petitioner is the joint

account holder alongwith her husband in Kotak Mahindra Bank,

she cannot be held liable for the cheque issued and signed by her

husband. She is not the drawer of the said cheque, therefore, the

learned Trial Court should not have issued the process against the

TAMBE J Cr. WP-186-2024.odt

petitioner. To buttress his submission, he seeks to rely on the

decision of the Hon'ble Supreme Court in the case of Aparna A.

Shah vs. Sheth Developers Private Limited and Anr , (2013) 8

SCC 71.

6. Per contra, Mr A. Tripathi, learned counsel appearing

for the respondent, submits that a presumption cannot be made

that the signatory is liable for the punishment under Section 138

of the N.I. Act. According to him, it is not the signatory who is

made liable, but it is the person who issued the cheque is liable for

punishment under Section 138 of the N.I. Act. The person, who

draws a cheque on the bank for payment of legal dischargeable

liability shall be held liable under Section 138 of the N.I. Act.

7. Mr Tripathi, learned counsel for respondent, took me to

the definition of person enumerated under Section 3(42) of the

General Clauses Act, 1987 submitting that "person" includes body

of individuals and therefore, the petitioner, who holds the joint

account and also the co-borrower, is liable for punishment under

Section 138 of the N.I. Act. He supported the impugned order

and sought rejection of the petition.

TAMBE J Cr. WP-186-2024.odt

8. This takes me to Section 138 of the N.I. Act. In order to

constitute an offence under Section 138 of the N.I. Act, a person

must have drawn a cheque on an account maintained by him with

a banker for payment of any amount of money to another person

out of that account. Thus, a person, who draws the cheque, is

liable for punishment under Section 138 of the N.I. Act. The

person mentioned in Section 138 of the N.I. Act, is qualified as a

person who has drawn the cheque, thus it is not any person but

the drawer of the cheque who is liable for punishment under

Section 138 of the N.I. Act. Therefore, I do not find force in the

argument of Mr Tripathi, learned counsel for respondent.

9. The word "drawer" is defined under Section 7 of the

Negotiable Instruments Act, which reads as under :

"7. Drawer.- The maker of a bill of exchange or cheque is called the drawer. ..."

10. Evidently, the petitioner is not the maker of the cheque,

therefore, she is not the drawer of the said cheque. The identical

issue came up for consideration before the Hon'ble Supreme

Court in the case of Aparna A. Shah (supra), which is relied upon

by the learned counsel for the petitioner, wherein the Hon'ble TAMBE J Cr. WP-186-2024.odt

Supreme Court in Paras 27 and 28 has held 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 the 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 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 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 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 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 TAMBE J Cr. WP-186-2024.odt

advanced stage."

11. Thus, what is deduced from the aforesaid Authority is

that a joint account holder cannot be prosecuted for the offence

punishable under Section 138 of the N.I. Act, unless the cheque

has been signed by each and every person, who is joint account

holder. No doubt that there is an exception to the rule, which is

prescribed under Section 141 of the N.I. Act, which also covers

the case argued by the learned counsel for the respondent, but no

where it is the case of respondent - Co-operative Society in the

criminal complaint that the petitioner and her husband took a

loan and issued a cheque as a body of individuals, therefore, the

argument of the learned counsel for respondent does not hold

water.