Dipikaben Alpesh Patel vs State Of Gujarat
2021 Latest Caselaw 5769 Guj

     R/SCR.A/7028/2019                           JUDGMENT DATED: 10/06/2021




       IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

     R/SPECIAL CRIMINAL APPLICATION NO. 7028 of 2019


FOR APPROVAL AND SIGNATURE:


HONOURABLE MS. JUSTICE GITA GOPI

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1      Whether Reporters of Local Papers may be                      No
       allowed to see the judgment ?

2      To be referred to the Reporter or not ?                       Yes

3      Whether their Lordships wish to see the fair copy             No
       of the judgment ?

4      Whether this case involves a substantial question             No
       of law as to the interpretation of the Constitution
       of India or any order made thereunder ?

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                         DIPIKABEN ALPESH PATEL
                                 Versus
                            STATE OF GUJARAT
=============================================
Appearance:
MR P P MAJMUDAR(5284) for the Applicant(s) No. 1
MR JOHNSEY P MACWAN(5498) for the Respondent(s) No. 2
MS MONALI BHATT APP for the Respondent(s) No. 1
=============================================

CORAM:HONOURABLE MS. JUSTICE GITA GOPI

                            Date : 10/06/2021

                            ORAL JUDGMENT

1. Rule. Ms. Monali Bhatt, learned APP and Mr.

Johnsey P.Macwan, learned advocate for the respondent

no.2 waives service of notice of Rule on behalf of

R/SCR.A/7028/2019 JUDGMENT DATED: 10/06/2021

respective parties. With the consent of the parties, the

matter is heard finally today.

2. This petition has been filed under Article 226 of

the Constitution of India as well as Section 482 of the

Code of Criminal Procedure for quashing and setting

aside the complaint being Criminal Case No.825 of 2019

pending before the learned 6 th Additional C.J.M., Anand

under Section 138 of the Negotiable Instruments Act,

1881 (hereinafter referred to as the 'N.I. Act' for short)

and the consequential proceedings, if any, initiated in

pursuance thereof .

3. It is contended in the petition that respondent

no.2 preferred the complaint contending that the accused

of Criminal Case No.825 of 2019 came in his contact

through his younger brother, Pankajbhai Poonambhai

Patel. The accused developed friendly terms and

thereafter as were in need of money asked hand loan

from the present respondent no.2 through intervention of

his younger brother. The respondent no.2, therefore, gave

the accused hand loan of Rs.5,50,000/- and accused

R/SCR.A/7028/2019 JUDGMENT DATED: 10/06/2021

promised to return the same within a period of five

months and when respondent no.2 demanded back the

money, the accused handed him a Cheque of

Rs.5,50,000/- dated 24.12.2018 bearing Cheque

No.281811, drawn on State Bank of India, Account

No.30679619403, Chhani Road Branch, Vadodara, signed

by accused no.1, who is husband of the present

petitioner.

3.1 It is stated that the said Cheque of 24.12.2018

was deposited by the respondent no.2 in his Corporation

Bank, Sudan Branch, Account No.346000101000161,

which was dishonoured on 28.12.2018 with endorsement

"Today's Opening Balance Insufficient". Thereafter,

Demand Notice under Section 138 of the N.I. Act was

sent through R.P.A.D., which was received by the accused

on 12.01.2019. The said legal notice was replied on

29.01.2019, whereby the accused denied the contention

raised by the present respondent no.2 in his Demand

Notice and stated of taking a loan of Rs.1,00,000/- in the

month of November, 2015 for a period of one year at the

monthly interest of 5%. It is alleged that the present

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respondent no.2 had asked accused to give Cheques by

way of security and against the loan of Rs.1,00,000/-, the

accused had paid Rs.1,60,000/- to respondent no.2, but

the said Cheques which were given by way of security

were not returned and were deposited in the Bank to

pressurize the accused.

3.2 It is contended that Criminal Case No.825 of

2019 has been filed in the Court of 6 th Additional C.J.M.

and Summons were issued to both the accused vide order

dated 18.03.2019. The present petitioner has contended

that she is not the signatory to the dishonoured Cheque

and the said Cheque was issued from the Joint Account

maintained by her along with her husband and thus on

that ground stated that she cannot be held liable under

Section 138 read with Section 141 of the N.I. Act and

thus prayed for quashing and setting aside the process

issued against her in Criminal Case No.825 of 2019.

4. Heard Mr. P.P. Majmudar, learned advocate for

the petitioner, Mr. Johnsey P.Macwan, learned advocate

for respondent no.2 and Ms. Monali Bhatt, learned APP

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for the State.

5. Mr. P.P. Majmudar, learned advocate for the

petitioner submitted that no cognizance can be taken by

the Court against the present petitioner, as the Cheque

does not bear her signature and merely because the

petitioner was a Joint Account holder along with her

husband, false case has been filed against her. Mr.

Majmudar referring to the order passed by the learned 6th

Additional C.J.M., Anand below Exhibit-1, submitted that

the learned trial Court Judge has not considered the

provisions of law and without recording reasons

Summons have been ordered to be issued on 05.02.2019

under Section 138 of the N.I. Act for the presence on

18.03.2019.

6. Relying on the case of Harshad Manubhai

Lalavaiya Vs. State of Gujarat & Anr., passed by this

Court on 04.04.2017 in Criminal Misc. Application (For

Quashing & Set Aside FIR/Order) No.19938 of 2016, Mr.

Majmudar submitted that the petitioner is wife of the co-

accused and she is not the signatory to the Cheque and

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thus no liability can be fasten upon her, thus, prayed for

quashing and setting aside the proceedings against the

present petitioner.

7. Copy of the legal notice issued under Section

138 dated 08.01.2019 is on record, which was part of the

proceedings before the learned 6th Additional C.J.M.,

Anand and accordingly Cheque No.381811 of

Rs.5,50,000/- dated 24.12.2018 was signed by Alpesh

Babubhai Patel, who is the husband of the present

petitioner. Account No.30679619403 at State Bank of

India, Vadodara, is a joint account with the husband and

the said impugned cheque is not signed by the present

petitioner.

8. In the case of Jugesh Sehgal Vs. Shamsher

Singh Gogi, reported in (2009) 14 SCC 683, the

following ingredients to constitute the offence under

Section 138 of the N.I. Act, has been laid down.

"(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 that account.

R/SCR.A/7028/2019 JUDGMENT DATED: 10/06/2021

(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

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Section 138 of the Act."

8.1 Referring to the scope and ambit of powers of the

High Court under Section 482 of the Code, the Supreme

Court in the above referred judgment of Jugesh Sehgal

(supra), observed that, the scope and ambit of powers of

the High Court under Section 482 of the Code has been

enunciated and reiterated by the Apex Court in series of

decisions and several circumstances under which the

High Court can exercise jurisdiction in quashing

proceedings. The powers under Section 482 are very

wide, but it should be exercised in appropriate cases, ex

debito justitiate to do the real and substantial justice. The

inherent powers do not confer an arbitrary jurisdiction on

the High Court to act according to whim or caprice. The

powers have to be exercised sparingly, with

circumspection and in the rarest of rare cases, where the

Court is convinced, on the basis of material on record,

that allowing the proceedings to continue would be an

abuse of the process of the court or that the ends of

justice require that the proceedings ought to be quashed.

R/SCR.A/7028/2019 JUDGMENT DATED: 10/06/2021

8.2 In case of State of Haryana V. Bhajan Lal and

others, AIR 1992 SC 604, the Apex Court formulated as

many as seven categories of cases, wherein the

extraordinary power under Section 482 could be

exercised by the High Court to prevent abuse of process

of the court. It was clarified that it was not possible to lay

down precise and inflexible guidelines or any rigid

formula or to give an exhaustive list of circumstances in

which such power could be exercised.

9. Section 138 of the N.I. Act reads 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 arrangement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which

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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 thirty 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".

9.1 The plain reading of Section 138 makes it clear

that it has to be strictly interpreted, as penal provision is

made for commission of offence as prescribed under

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Section 138 of the N.I. Act. It is drawer of the Cheque,

who has to be made liable for the payment of amount of

money due to the payee or the holder of the Cheque

within the statutory limits as provided, after the receipt of

the legal notice demanding the cheque money. If the

drawer of the Cheque fails to make payment of the said

amount of money, then such person shall be deemed to

have committed offence. Without prejudice to any of the

provisions of the N.I. Act, the penal provision is for the

punishment with imprisonment for a term which may

extend to two years or with fine which may extend to

twice the amount of the Cheque or with both. Criminal

prosecution is neither for recovery of money nor for

enforcement of any security. Section 138 of the N.I. Act

being a penal provision, it entails a conviction and

sentence at the end of the criminal proceedings. There is

a statutory presumption under Section 139 of the N.I. Act

in favour of the holder of the Cheque. A prosecution

under Section 138 of the N.I. Act is ultimately to bring

the offender to suffer penal consequences.

R/SCR.A/7028/2019 JUDGMENT DATED: 10/06/2021

10. The case of the complainant in Criminal Case

No.825 of 2019 does not fall under the provisions of

Section 141 of the N.I. Act. It appears that the present

petitioner has been joined in criminal proceedings just as

being the joint account holder with the husband. As per

the facts of the case, the Cheque was issued by accused

no.1 in his personal capacity. The wife has no business

relationship, nor was having any transaction with the

complainant on her personal basis, thus, she cannot be

made vicariously liable for the act of the husband. It

appears that the learned trial Court Judge has not

considered the averments of the complaint and has not

examined the status of the proposed accused prior to

order for issuance of summons against the present

petitioner, who was joined in the criminal proceedings

merely under the status of being wife of the accused no.1

and holding a joint account with the husband. She could

have been prosecuted only when the Cheque has been

signed by both of them as joint account holder. The

learned Judge while determining the question whether

any process is to be issued or not, has to be satisfied

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whether there is sufficient ground for proceeding. The

proceedings under Section 138 of the N.I. Act cannot be

misused by any of the parties. The culpability is attached

with the dishonour of the Cheque and it is only the

drawer of the Cheque who can be made accused in any

proceedings under Section 138 of the N.I. Act. From the

bare reading of Section 138 of the N.I. Act, it transpires

that the liability of the drawer of the Cheque, who has

issued the Cheque from the joint account maintained by

him and his wife, does not specifically bear any

implication to make the wife equally liable when the

Cheque was drawn by her husband, and therefore, no

vicarious liability can be fastened on the holder of a joint

account, by a mere fact that the dishonoured cheque was

issued by the drawer of such a cheque from the same

bank account. The analogy of section 141 of the N.I. Act,

which deals with the offences of the company, cannot be

stretched to make the joint holder of a bank account

vicariously liable to face the prosecution under Section

138 of the N.I. Act. The trial against the present

petitioner in Criminal Case No.825 of 2019 would be

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abuse of process of Court. Hence, the Court is of the

opinion that this is a fit case where the inherent powers

of the Court under section 482 of the Cr.P.C. could be

exercised in favour of the applicant for securing the ends

of justice.

11. In the result, the application is allowed. The

Criminal Case No.825 of 2019 pending before the learned

6th Additional C.J.M., Anand under Section 138 of the N.I.

Act and the consequential proceedings initiated in

pursuance thereof are quashed and set aside qua the

present petitioner. Rule is made absolute.

12. It is made clear that the trial Court shall

continue the proceedings of Criminal Case No.825 of

2019 qua the accused no.1 - Alpesh Babubhai Patel

without being influenced by any of the observations made

by this Court in the present order.

(GITA GOPI, J.) Pankaj