Geeta Srivastava vs Bhanu Sharma
2002 Latest Caselaw 1983 Del

JUDGMENT

J.D. Kapoor, J.

1. Petitioner is a Government Teacher in the school of Delhi Vidyut Board while her husband who has been arrayed as respondent No. 1 is in the business of advertisement under the name of Vikalp Advertising.

2. Admittedly the petitioner is the wife of the main accused who took a loan of Rs. 50,000/- which was given by way of cheque and he gave the blank cheque as security.

3. The petitioner's application for recall of the summoning order was dismissed by the learned ASJ vide order dated 7th May, 2002 on the ground that the averments being made by the petitioner cannot be looked into at this stage because it is yet to be proved by the complaint himself that the cheque was returned for insufficient funds and the cheque was given to them in discharge of the liability by the accused persons.

4. I am afraid the observations and the view of the learned ASJ suffers from enormous erroneousness. Section 138 of the Negotiable Instruments Act holds those individuals liable who are drawer of the cheque and no other person. In order to appreciate the contention of the learned counsel Sections 138 & 141 need to be reproduced. These are 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 provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both:

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 in due 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 fifteen days of the receipt of information by him from the bank regarding the return of the cheque 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 purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.

" 141. Offences by companies - (1) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in Sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation - For the purposes of this section. -

(a) "company" means any body corporate and includes a firm or other association of individuals; and

(b) "director", in relation to a firm, means a partner in the firm."

5. However, the explanation to Section 141 defines the Company as a body Corporate, the firm or other association of individuals. The learned counsel for the respondent has laid great emphasis on the words "other association of individuals" in order to bring the petitioner in the net of the offence committed under Section 138. Bare reading of these provisions show that offence under Section 138 is offence committed by an individual if he draws the cheque individual capacity and if the Company happens to be the drawer of the cheque then those persons who were at the relevant time in charge of and responsible to the day-to-day affairs of the Company are liable to be prosecuted under Section 138.

6. Definition of Company shows that the contention of the learned counsel that husband and wife should be deemed as "Association of individuals" is wholly misconceived as words "other association of individuals" pertain to only individuals who are engaged in the same business as a group and not the likes of the petitioner and her husband. Petitioner is not engaged in the business of her husband. She is a Government Teacher. The loan was taken by her husband by way of cheque and it was her husband who is the drawer of the cheque which on presentation was dishonoured. Merely because the petitioner accompanied her husband when he took the loan as the complainant happened to be her friend would in no way saddle the petitioner with the liability of the offence under Section 138 of the Act.

7. If the concept propounded by the learned counsel for the respondent is accepted then every member of the family of a person who is engaged in a particular business can be roped in being "Association of individuals".

8. It appears that the learned ASJ did not appreciate the contention and the arguments of the petitioner in the right perspective and lost track of the ingredients of the offence under Section 138 while dismissing the application of the petitioner for recall of the summoning order vis-a-vis her.

9. The foregoing reasons persuade me to allow the petition and set aside the impugned order. The order summoning the petitioner is hereby recalled. However any observation made in this order shall not be used by the co-accused nor will it tantamount to expression of opinion on the merits of the complaint. This confines to the petitioner alone.