Mr. R.K. Mishra vs The State And Anr.
2006 Latest Caselaw 2119 Del

JUDGMENT

A.K. Sikri, J.

1. The petitioner herein is aggrieved against the summoning order passed by the learned M.M. in complaint under Section 138 of Negotiable Instruments Act filed by respondent No. 2 herein. Respondent No. 2, namely, International Tractors Limited (hereinafter referred to as the complainant) appointed M/s. World Aviation Services Limited as a Business Promotion Consultant for transitional Islamic State of Afghanistan on 27.12.2002. An agreement-cum-guarantee deed dated 5.2.2003 was entered into between six parties in furtherance of the Agreement dated 27.12.2002. The petitioner is a signatory to the said agreement dated 5.2.2003. On 3.10.2003 cheque bearing No. 014863 dated 6.4.2003 for Rs. 50 lacs was issued by M/s. World Aviation Services Limited which was signed by one Mr. G.K. Akbari, as director of this company. On presentation, the cheque was dishonoured. Legal notice dated 9.10.2003 was issued by the complainant calling upon the company to make payment. This notice was issued to the petitioner as well. As the payment was not made within 15 days of receipt of the notice, complainant filed the complaint under Section 138 of the Negotiable Instruments Act in which the impugned summoning orders have been issued. There are two persons arraigned as accused persons in this complaint. One Mr. G.K. Akbari in the capacity of the Director of M/s. World Aviation Services Limited and the other is the petitioner, who is described as Director-cum-Manager Partner of M/s. R.K. Associates. The petitioner had moved application for his discharge which application has rightly been dismissed by the learned Metropolitan Magistrate vide order dated 30.10.2004 on the ground that he has no power to recall the summons, once issued, in view of the judgment of the judgment of the Hon'ble Supreme Court in 2004 (7) Scale 131 and 2004 (IX) AD (SC) 219. Since such powers vest with this Court only under Section 482 of the Cr.P.C., the petitioner has accordingly preferred this petition with same prayer.

2. Case of the petitioner is that cheque in question was issued by M/s. World Aviation Services Limited and signed by Mr. G.K. Akbari and petitioner has nothing to do with the said complaint. He is neither Director in the said company nor in any way in charge of or controlling the affairs of this company. His submission is that though he is a partner of M/s. R.K. Associates, who was signatory to the agreement but as the cheque in question is not issued by/or on behalf of the said partnership and is not signed by the petitioner, the petitioner could not be imp leaded as an accused person in the criminal proceedings arising out of the dishonour of the cheque in question. In support of this submission, he has relied upon the following judgments:

1. P. Ramakrishnan and Anr. v. Bagnar Finance Co. Vol. 83 1995 Company Cases 769.

2. Sudesh Kumar Sharma v. K.S. Selvamani and Ors. Vol. 83 1995 Company Cases 806.

3. Kitex Garments Limited v. Ajay Koushik Prop. Karan Traders rep. by Power of Attorney Holder 2002 (1) Crimes 458

3. The complainant, on the other hand, relying upon the clauses in the Agreement to which the petitioner is also a party, submits that liability of paying the debt was of the petitioner as well and since the cheque in question was issued in discharge of the said liability, the petitioner is equally liable. Learned Counsel for the complainant referred to the averments made in the complaint, wherein it is stated that by virtue of the two agreements dated 27.12.2002 and 5.12.2003, both the accused contracted to arrange supply order of 5000 Tractors/Agricultural Implements of equivalent value from the Government of Afghanistan or other countries within a period of three months from 27.12.2002 on commission basis stated therein. Complainant company made an advance of Rs. 50 lacs which was adjustable against the commission earned on the basis of supply orders arranged by them for it. Since both the parties individually and jointly failed to get any supply order from the Afghanistan Govt., the advance of Rs. 50 lacs given by the complainant became payable which was a joint liability of both the accused persons and as the cheque in question was given in discharge of this liability, the petitioner was also liable for non-payment.

4. After considering the arguments, I am of the view that submission of the petitioner has merit and is bound to succeed. We are, in this case, not concerned with the question as to whether the petitioner was liable to make payment and whether he is also individually and jointly, along with Mr. G.K. Akbari, liable to refund the advance given by the complainant.

5. Proceedings in question are under Section 138 of the Negotiable Instruments Act which are of criminal nature. The complainant wants to fasten the petitioner with this criminal liability which arises only out of dishonour of the cheque in question. However, cheque, is given by M/s. World Aviation Services Limited and signed by Mr. G.K. Akbari. So far as M/s. World Aviation Services Limited is concerned, admittedly, the petitioner is neither Director in the said company nor associated with the affairs of this company. Under Section 138 of the Negotiable Instruments Act, it is the drawer of the cheque who would be liable in case of dishonour of the cheque. The petitioner may be signatory to the agreement and it may be a joint venture of the petitioner and Mr. G.K. Akbari (M/s. World Aviation Services Limited), whereby they agreed to obtain certain contracts from Government of Afghanistan for the complainant. They received advance payment of Rs. 50 lacs as well for this purpose.

6. May be, because of these reasons, petitioner would have civil liability and suit for recovery could have been filed against the petitioner as well. But in so far as criminal liability under Section 138 of the Negotiable Instruments Act is concerned, it is clear from the language of the section that the drawer of the cheque would be the only person responsible. In case where the cheque is issued by the company, then liability has to be fastened upon any other person who controls and is responsible for the affairs of the company. However, the petitioner does not fit in that description, in so far as drawer of the cheque in the present case is M/s. World Aviation Services Limited. In the judgments, referred to by the learned Counsel for the petitioner, this very aspect is decided and the decision goes in favor of the petitioner. In P. Ramakrishnan and Anr. v. Bagnar Finance Co. (supra) two petitioners had entered into an agreement with the respondent and obtained a loan. However, two cheques were issued only by the first borrower in favor of the respondent. It was held that since the second petitioner was not the drawer of the cheques in question, the prosecution instituted against him under Section 138 of the Negotiable Instruments Act, 1881, was not maintainable. This conclusion was based on the reading of clause (b) of the proviso to Section 138 NIA which is extracted below:

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, withing fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid.

7. In Sudesh Kumar Sharma v. K.S. Selvamani and Ors. (supra), the first petitioner was the proprietor of the concern, in the discharge of whose liability, the second petitioner issued cheques in favor of certain concerns, which were dishonoured, the Court held that since cheques were issued by the second petitioner, even if it was for discharge of liability of the first petitioner, the first petitioner could not be criminally liable for an offence under Section 138 of the Act. To the same effect is a judgment of Kitex Garments Limited v. Ajay Koushik Prop. Karan Traders rep. by Power of Attorney Holder (supra).

8. I am in respectful agreement with the view taken by the Madras High Court in the aforesaid three judgments. The complaint against the petitioner was, therefore, not maintainable. The summoning order qua the petitioner is quashed and the complaint is hereby dismissed. This petition is allowed in the aforesaid terms without orders as to cost.