Delhi High Court
Shri Anil Kingrani vs Shri Vinod Kumar on 19 November, 2018
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Crl.M.C.No. 1808/2016 & CRL. M.A. 7671/2016
Judgment reserved on : 08.02.2018
Date of decision : 19.11.2018
SHRI ANIL KINGRANI ..... Petitioner
Through: Mr. Vivek B. Saharya,
Advocate
versus
SHRI VINOD KUMAR ..... Respondent
Through: Mr. Sitab Ali Chaudhary, Adv
CORAM:
HON'BLE MS. JUSTICE ANU MALHOTRA
JUDGMENT
ANU MALHOTRA, J.
1. The petitioner vide this petition under Section 482 of the Code
of Criminal Procedure, 1973 seeks quashing of a complaint case No.
04/4R/2016 under Section 139/142 of the Negotiable Instruments Act,
1881, read with Section 420 of the Indian Penal Code, 1860, and as
per order dated 29.5.2015, the proceedings are stated to be pending
before the learned Metropolitan Magistrate-03, Rohini.
2. A perusal of the record indicates that vide order dated
29.5.2015, the petitioner herein was summoned for an offence
punishable under Section 138 Negotiable Instruments Act, 1881 (as
amended) on a complaint filed by the respondent herein under Section
138 read with 142 of the Seciton138 Negotiable Instrument Act, 1881
(as amended) read with Section 420 of the Indian Penal Code, 1860.
3. The petitioner submits that qua the offence punishable under
Section 138 of the Negotiable Instruments Act, 1881 (as amended), it
is well settled that it is only the signatory of the allegedly dishonoured
cheque who can be made liable in relation thereto. The averments
made in the complaint bearing No. 17733/15 filed before the Chief
Metropolitan Magistrate (South-East) and now bearing no.04/4R/2016
pending in the Rohini Courts as filed by the complainant/the
respondent herein, alleges that the petitioner Anil Kingrani and his
wife Taruna Kingrani, approached the plaintiff for the sale of Plot
bearing No.l402, measuring 32.00 sq. meters in Block & Pocket-C-1,
Sector-34, situated in the lay out Plan of Rohini Residential Scheme,
Rohini, Delhi- 110085 vide Application No.24187 and application
No.23629 for a consideration of Rs.11,00,000/- and the petitioner
herein and his wife being owners of the said plot entered into an
agreement to sell dated 12.12.2013 with the complainant and against
that agreement, the complainant had paid a sum of Rs.5,00,000/- to the
tune of Rs.2,00,000/- in cash and two cheques amounting to Rs.
1,50,000/- each drawn on Andhra Bank, Pitampura Branch, Delhi and
that the petitioner and his wife executed another agreement to sell
dated 30.12.2013 against which the complainant had paid the balance
amount of Rs.6,00,000/- in respect of the said plot.
4. As per the averments made in the complaint filed by the
respondent, the petitioner and his wife after sometime, showed their
inability to sell the above said plot to the complainant due to some
unavoidable circumstances and the complainant agreed to his
difficulty cooperated with the petitioner herein allegedly and a
Cancellation Deed was executed in respect of the agreement dated
12.12.2013 by the petitioner and his wife and the petitioner returned
the entire consideration amount of Rs.5,00,000/- to the complainant,
which was duly acknowledged by the complainant but the petitioner
and his wife despite repeated demands and requests made by the
complainant did not return the amount of Rs.6 lacs against the second
agreement which was executed by the petitioner and his wife for a
sum of Rs.6,00,000/- as per the agreement dated 30.12.2013 which
amount as per the complainant (i.e. the respondent herein) is still due
against the petitioner and his wife.
5. The complainant (i.e. the respondent to the present petition) in
his complaint under Section 138 read with Section 142 & Section 138
of the Negotiable Instrument Act, 1881 (as amended) read with
Section 420 of the Indian Penal Code, 1860, further submitted that in
the middle of March, 2015 the complainant personally visited the
accused i.e. the petitioner herein and his wife, namely, Smt. Taruna
and demanded a sum of Rs.6,00,000/- which he had paid against the
second agreement dated 30.12.2013 and the petitioner allegedly in
discharge of his legal liability issued a cheque bearing No.000070
dated 12.3.2015 for a sum of Rs. 1,00,000/-, drawn on the Bank of
Baroda, Zamrudpur Branch, New Delhi and the complainant
represented the same to his banker for encashment but the same was
returned dishonoured with the remarks "FUNDS INSUFFICIENT"
vide Returning Memo dated 6.4.2015.
6. The complainant further contended that after receiving back the
cheque in question which was dishonoured, the complainant contacted
the petitioner a number of times and apprised him about the dishonour
of the cheque, however, the petitioner herein allegedly did not pay any
heed to the request of the complainant and thus the complainant sent a
legal notice to the petitioner for making of the payment of the said
dishonoured cheque.
7. The legal notice dated 20.4.2015 issued on behalf of the
complainant (i.e. the respondent herein) indicates that it was in
relation to an alleged commission of an offence punishable under
Section 138 read with Section 142 & Section 138 of the Negotiable
Instruments Act, 1881 (as amended) in relation to the cheque bearing
No.000070 dated 12.3.2015 for a sum of Rs. 1,00,000/-, drawn on the
Bank of Baroda, Zamrudpur Branch, New Delhi.
8. The complainant (i.e. the respondent herein) averred through
the complaint that despite service of the said legal notice, the
petitioner did not make the payment of the dishonoured cheque and
thus committed an offence punishable under Section 138 read with
142 Seciton138 Negotiable Instruments Act, 1881 (as amended) and
as the petitioner was well aware about the issuance of the same and
that the cheque would not be honoured on presentation thus the
petitioner also committed an offence punishable under Section 420 of
the Indian Penal Code by causing wrongful gain to himself and
wrongful loss to the complainant.
9. Through the present petition and the oral submissions made, the
chief contention of the petitioner has been that the cheque in question
does not bear his signatures and that the signatory thereof is his wife
Taruna Kingrani and that the account on which the cheque had been
been drawn belongs to M/s Thought Work Events which is the sole
proprietorship concern of his wife and that thus the complaint against
the petitioner cannot be sustained and is liable to be quashed. There
are other submissions that the petitioner has made to the effect that the
allegations levelled by the complainant are wholly false and it is
further submitted that the agreement between the parties had been
mutually terminated on 9.3.2015. There was thus an estoppel against
the respondent i.e., the complainant qua his contention that the cheque
was issued in discharge of a legally recoverable debt and that in fact
the cheques had been issued in discharge of whole or a part of a
liability towards mutation proceedings before the concerned authority
and the same has been misused by the respondent and it was thus
submitted through the petition that an offence punishable under
Section 405 of the Indian Penal Code, 1860, against the defendant has
been made out.
10. Through the submissions made on behalf of the respondent it
has been denied that the allegations levelled against the petitioner are
false and the respondent also denied that as per the mutual terms
agreed between the parties after signing a cancellation agreement it
had been agreed that the parties would not claim anything from each
other against the party in question. The respondent also denied that
the cheque in question had been handed over on the basis of meeting
out miscellaneous incidental expenses towards the mutation
proceedings as contended by the petitioner and the respondent also
denied the allegation of the petitioner that a blank cheque had been
filled in by him and thereafter presented mala fidely.
11. The respondent complainant further denied that the cheque in
question had not been drawn by the petitioner.
12. During the course of submissions that had been made on behalf
of the petitioner, the petitioner submitted the re-verification of
signatures qua account No. 41810200000017 as issued by the Bank of
Baroda, Zamrudpur Branch dated 4.2.2017 vide which the said Bank
verified the signatures of Taruna Kingrani, proprietor of M/s Thought
Work Events as the Account Holder of the said account. The cheque
in question as placed on record is in the form of the copy thereof as
Annexure P-6 is indicated to have been issued from the said account
No. 41810200000017 from the Bank of Baroda, Zamrudpur Branch
with the signatures thereon as of the verified signatures of Taruna
Kingrani, proprietor of M/s Thoughts Works Events.
13. In the circumstances, the reliance that has been placed on behalf
of the petitioner on the verdict of the Hon'ble Supreme Court in
Aparna A. Shah v. Sheth Developers private Limited and Another:
(2013) 8 SCC 71, wherein it has been categorically observed to the
effect: that under Section 138 of the Negotiable Instruments Act, 1881
(as amended) it is only the drawer of the Cheque that can be
prosecuted and that the penal provisions have to be strictly construed
and no one can be held criminally liable for an act of another with the
specific reliance placed on behalf of the petitioner on the observations
in paragraph Nos. 13, 16, 18, 20 and 27 of the said verdict which read
to the effect:-
"13. In order to constitute an offence under Section 138 of the N.I.
Act, this Court, in Jugesh Sehgal vs. Shamsher Singh Gogi, (2009)
14 SCC 683, noted the following ingredients which are required to
be fulfilled:
"(i) a person must have drawn a cheque on
an account maintained by him in a bank for
payment of a certain amount of money to
another person from out of that account;
(ii) the cheque should have been issued for
the discharge, in whole or in part, of any
debt or other liability;
(iii) that 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;
(iv) that cheque is returned by the bank
unpaid, either because of the amount of
money standing to the credit of the 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 the bank;
(v) the payee or the holder in due course of
the cheque 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 15 days of the receipt of
information by him from the bank regarding
the return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make
payment of the said amount of money to the
payee or the holder in due course of the
cheque within 15 days of the receipt of the
said notice.
Being cumulative, it is only when all the
aforementioned ingredients are satisfied that
the person who had drawn the cheque can
be deemed to have committed an offence
under Section 138 of the Act.,"
considering the language used in Section 138 and taking note of
background agreement pursuant to which a cheque is issued by
more than one person, we are of the view that it is only the
"drawer" of the cheque who can be made liable for the penal
action under the provisions of the N.I. Act. It is settled law that
strict interpretation is required to be given to penal statutes.
14. ...........................................
15. ............................................
16) In Sham Sunder and Others vs. State of Haryana, (1989)
4 SCC 630, this Court held as under:
"9. The penal provision must be strictly
construed in the first place. Secondly, there
is no vicarious liability in criminal law
unless the statute takes that also within its
fold. Section 10 does not provide for such
liability. It does not make all the partners
liable for the offence whether they do
business or not."
17. ........................................
18) In the case on hand, we are concerned with criminal
liability on account of dishonour of a cheque. It primarily falls on
the drawer, if it is a Company, then Drawer Company and is
extended to the officers of the company. The normal rule in the
cases involving criminal liability is against vicarious liability. To
put it clear, no one is to be held criminally liable for an act of
another. This normal rule is, however, subject to exception on
account of specific provision being made in statutes extending
liability to others. For example, Section 141 of the N.I. Act is an
instance of specific provision that in case an offence under Section
138 is committed by a company, the criminal liability for dishonour
of a cheque will extend to the officers of the company. As a matter
of fact, Section 141 contains conditions which have to be satisfied
before the liability can be extended. Inasmuch as the provision
creates a criminal liability, the conditions have to be strictly
complied with. In other words, the persons who had nothing to do
with the matter, need not be roped in. A company being a juristic
person, all its deeds and functions are the result of acts of others.
Therefore, the officers of the company, who are responsible for the
acts done in the name of the company, are sought to be made
personally liable for the acts which result in criminal action being
taken against the company. In other words, it makes every person
who, at the time the offence was committed, was in-charge of, and
was responsible to the company for the conduct of business of the
company, as well as the company, liable for the offence. It is true
that the proviso to sub- section enables certain persons to prove
that the offence was committed without their knowledge or that
they had exercised all due diligence to prevent commission of the
offence. The liability under Section 141 of the N.I. Act is sought to
be fastened vicariously on a person connected with the company,
the principal accused being the company itself. It is a departure
from the rule in criminal law against vicarious liability.
19. ...............................................
20 Mr. Mukul Rohtagi, learned senior counsel for
respondent No.1, by drawing our attention to the definition of
"person" in Section 3(42) of the General Clauses Act, 1897
submitted that in view of various circumstances mentioned, the
appellant herein being wife, is liable for criminal prosecution. He
also submitted that in view of the explanation in Section 141(2) of
the N.I. Act, the appellant wife is being prosecuted as an
association of individual. In our view, all the above contentions are
unacceptable since it was never the case of respondent No.1 in the
complaint filed before learned Magistrate that the appellant wife is
being prosecuted as an association of individuals and, therefore,
on this ground alone, the above submission is liable to be rejected.
Since, this expression has not been defined, the same has to be
interpreted ejusdem generis having regard to the purpose of the
principle of vicarious liability incorporated in Section 141. The
terms "complaint", "persons" "association of persons"
"company" and "directors" have been explained by this Court
in Raghu Lakshminarayanan vs. Fine Tubes, (2007) 5 SCC 103.
21. ....................................
22. ........................................
23. .........................................
24. ..........................................
25. ..............................................
26. ..............................................
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 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.,"
with further reliance having placed on behalf of the petitioner on the
verdict of the Supreme Court in Jugesh Sehgal v. Shamsher Singh
Gogi: (2009) 14 SCC 683 with the reliance having been placed on the
observations in paragraph No. 2 and 22 of the said verdict which on a
perusal thereof make it apparent that to attract a penal action under
Section 138 of the Negotiable Instruments Act, 1881 (as amended) it
is the drawer of the cheque which has been dishonoured who is to be
made accountable under Section 142 of the Seciton138 Negotiable
Instrument Act, 1881 (as amended) and not someone else and thus in
the circumstances of the instant case, the said verdicts relied upon on
behalf of the petitioner make it apparent in view of the re-verification
report of the Bank of Baroda verifying the signatures of the account
holder thereof as visible on annexure P-6 as being of Ms. Taruna
Kingrani and there being no signatures of the petitioner on the same it
is apparent that the proceedings under Section 138 read with Section
142 of the Negotiable Instruments Act, 1881 (as amended) in
Complaint No. 04/4R/16 to that extent cannot be continued.
14. The summoning order dated 29.5.2015 as had been issued by
the then Metropolitan Magistrate Seciton138 Negotiable Instruments
Act, bearing No. 17733/15 and now bearing No.4/4R/2016 as pending
in the Ld. Court of MM(NW) cannot continue and is thus set aside.
The complainant may however seek redressal qua the offence
punishable under Section 420 of the Indian Penal Code, 1860, against
the petitioner in accordance with law.
15. The petition Crl. M.C. No.1808/2016 and the accompanying
application CRL. M.A. 7671/2016 are disposed of accordingly.
ANU MALHOTRA, J.
NOVEMBER 19, 2018/SV
