Bhupinder Singh Bhogal vs G.E. Capital Transportation ...
2010 Latest Caselaw 5684 Del

          IN THE HIGH COURT OF DELHI: NEW DELHI

+             CRL. M.C. Nos.4918/2006 & 4936/2006

%             Judgment decided on: 14th December, 2010

BHUPINDER SINGH BHOGAL                     .....PETITIONER

                        Through: Mr. Kartickay Mathur, Adv.
                        Versus

G.E. CAPITAL TRANSPORTATION
FINANCIAL SERVICES LIMITED                 .....RESPONDENT

                        Through:   None.


+             CRL. M.C. Nos. 4939/2006 & 4919/2006

MANJIT SINGH BHOGAL                        .....PETITIONER

                        Through: Mr. Kartickay Mathur, Adv.
                        Versus

G.E. CAPITAL TRANSPORTATION
FINANCIAL SERVICES LIMITED                 .....RESPONDENT

                        Through:   None.


+             CRL. M.C.Nos.4938/2006 & 4940/2006

KULDEEP KAUR BHOGAL                        .....PETITIONER

                        Through: Mr. Kartickay Mathur, Adv.
                        Versus

G.E. CAPITAL TRANSPORTATION
FINANCIAL SERVICES LIMITED                 .....RESPONDENT

                        Through:   None.


Coram:
HON'BLE MR. JUSTICE A.K. PATHAK

       1. Whether the Reporters of local papers
          may be allowed to see the judgment?             No


CRL. M.C. 4918/2006                               Page 1 of 6
        2. To be referred to Reporter or not?         No

       3. Whether the judgment should be
          reported in the Digest?                    Yes

A.K. PATHAK, J. (Oral)

1. The abovenoted petitions are in similar facts, inasmuch as

question of law involved therein is same, thus, are being

disposed of together.

2. By these petitions, petitioners seek quashing of complaint

case Nos.1196/2002 and 1197/2002 under Section 138 of the

Negotiable Instruments Act, 1881 (for short hereinafter referred

to as "the Act") filed by the respondent before the Trial Court.

3. It is contended that the cheques involved in the complaints

had been issued by M/s N.N. Transportation & Company, a

proprietorship firm. Petitioners have nothing to do with the said

firm nor they had issued and signed the cheques. They are not

„drawer‟ of the cheques, therefore, are not liable for the

prosecution for the offence committed by the said firm,

inasmuch as provisions of Section 141 of the Act were not

attracted in this case. Thus, it is contended that the complaints

be quashed qua the petitioners.

4. Photocopies of cheques have been annexed along with the

petitions, a perusal whereof clearly shows that the same had

been issued from the account of M/s N.N. Transportation &

Company. Rubber stamp of the said firm affixed on the

cheques also indicates that cheques had been issued on behalf

of proprietorship firm. Petitioners, who have been impleaded

as accused nos. 2 to 4 in the complaint are neither sole

proprietor of the firm nor are signatories of the cheques. Sole

proprietorship firm is nothing but the creation of the sole

proprietor. It has no separate legal entity. Any reference made

to proprietorship firm shall include its sole proprietor and vice

versa. In view of this, provisions of Section 141 of the Act would

not be attracted in the present case.

5. At this stage, relevant it would be to extract Section 138 of

the Act, which reads as under:-

"Dishonor 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 be extended to two years) 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) Xxxxxxxxxxxx

(b) Xxxxxxxxxxxx

(c) Xxxxxxxxxxxx"

(emphasis supplied)

6. Section 7 of the Act envisages that the maker of a bill of

exchange or Cheque is called the "drawer"; the person thereby

directed to pay is called the "Drawee".

7. A conjoint reading of Sections 7 and 138 of the Act clearly

indicates that it is only the drawer of the cheque who can be

held responsible for the offence under Section 138 of the said

Act. Exception to this rule is provided in Section 141 of the Act,

which makes the persons other than drawer vicariously liable

for the offence under Section 138 of the Act, but only if the

drawer is a company or firm or association of individual and in

such an eventuality, all such persons, who at the time when

offence was committed, were in charge or responsible for the

conduct of the business of such company or firm or association

of individuals, would be deemed to be guilty for the offence

under Section 138 of the said Act.

8. Admittedly, cheques had not been issued either by a

company or partnership firm or association of individuals,

inasmuch as, petitioners have not been impleaded in any such

capacity by making a specific averment in this regard in the

complaint.

9. In Srikant Somani & Ors. Vs. Sharad Gupta & Anr.

2005 V AD (DELHI) 300, it has been held that the offence

under Section 138 of the Act is said to had been committed by

the person who issues the cheque and not the person on whose

behalf the cheque is issued unless, however, the person on

whose behalf the cheque is issued is a company or a

partnership firm. Vicarious liability is available only in respect

of those offences committed by a company as provided in

Section 141 of the Act. Section 138 makes it very clear that

only the person who draws the cheque is liable for the offence.

10. In M/s Gujarat Oleo Chem. Ltd. & Ors. vs. State and

Anr. 2010 (1) JCC (NI) 84 it has been held that it is only the

signatory of cheque i.e. drawer of the cheque, who had drawn

the cheque in his individual capacity and from his individual

account, would be liable for prosecution under Section 138 of

the said Act and not the directors of the company. In Lalit Jain

& Ors. Vs. State & Ors. MANU/DE/0889/2010, it has been

held that it is only the drawer of the cheque who can be held

responsible for the offence under Section 138 of the said Act.

11. In the present case, petitioners were neither the persons

who drew the cheques nor they can become liable by virtue of

Section 141 of the Act, thus, they cannot be prosecuted for the

offence under Section 138 of the Act.

12. For the foregoing reasons, complaint cases bearing numbers

1196/2002 and 1197/2002, pending in the court of

Metropolitan Magistrate, are quashed qua the petitioners only.

13. Petitions are disposed of in the above terms.

A.K. PATHAK, J.

DECEMBER 14, 2010 ga