Gujarat High Court

Ramabhai Viththalbhai Patel vs State Of Gujarat on 3 January, 2024

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     R/CR.MA/4625/2021                             ORDER DATED: 03/01/2024

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            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

     R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
                   FIR/ORDER) NO. 4625 of 2021

                                 With
              R/CRIMINAL MISC.APPLICATION NO. 4545 of 2021
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                         RAMABHAI VITHTHALBHAI PATEL
                                    Versus
                             STATE OF GUJARAT
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Appearance:
MR R.K.MANSURI(3205) for the Applicant(s) No. 1
MR TEJAS P SATTA(3149) for the Respondent(s) No. 2
NOTICE SERVED for the Respondent(s) No. 3
MR SOAHAM JOSHI, APP for the Respondent(s) No. 1
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 CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT

                               Date : 03/01/2024

                                ORAL ORDER

1. These applications are filed under Section 482 of

the Code of Criminal Procedure, 1973 (`the Code' for short)

for quashing and setting aside the complaints being Criminal

Case Nos.124 of 2018 pending before the Judicial Magistrate

First Class, Visnagar and Criminal Case No.149 of 2018

pending before the Judicial Magistrate, First Class, Kheralu

filed under the provisions of the Negotiable Instruments Act

(`NI Act' for short).

2. The facts giving rise to filing of these applications

are such that it is alleged in the impugned complaints by

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respondent no.2 that the applicant and respondent no.3 had

borrowed some money due to some necessity arose in his

business, and due to personal relation, the respondent no.3

had borrowed the amount; that the applicant had not

returned the money on time and when the respondent no.2

demanded the said money, the applicant and respondent no.3

gave cheques and when the same were deposited in the

bank, they returned dishonoured due to insufficient funds in

the bank account; therefore, the respondent no.2 issued the

notice and when the money was still not repaid, the

respondent no.2 filed the impugned complaints against the

applicant and respondent no.3. It is these complaints which

are prayed to be quashed by way of filing of these

applications.

3. Heard learned advocates for the parties.

3.1 Learned advocate Mr.Mansuri appearing for the

applicant in these applications submitted that the applicant

has not signed the cheques; that the cheques were not issued

by the applicant in his personal capacity; that there are no

specific averments as required under the law in the

complaints so as to make the applicant liable under the

offences invoked in the complaints. He, therefore, prayed to

allow these applications as no ingredients under Section 138

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of the NI Act are made out qua the applicant. In support of

his submissions, learned advocate for the applicant has relied

on the judgment in the case of Aparna A Shah V/s Sheth Developers Pvt.Ltd. And Ors., reported in (2013)8 SCC 71.

4. Per contra, learned APP Mr.Joshi for respondent no.1-state and learned advocate Mr.Satta for the respondent

no.2-complainant have objected these applications and

submitted that this Court should not exercise its powers by

interfering with the proceedings of recovery of amount and

the proceedings initiated under Section 138 of the Act are

perfectly justified.

5. Learned advocate Mr.Satta further submitted that

the cheques were issued from the joint account; that the

applicant and respondent no.3 were running the business

jointly and therefore, it cannot be said that the applicant is

not liable to pay the amount. He, therefore, prayed to

dismiss these applications at this premature stage.

6. I have considered the rival submissions and

perused the material on record.

7. At the outset, the provisions of Sections 138 of

the NI Act are required to be seen, which read as under:

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"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 provisions of this Act, be punished with imprisonment for "a term which may extend to two 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 induce 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

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information by him from the bank regarding the return of the cheques 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 purpose of this section, "debt or other liability"

means a legally enforceable debt or other liability."

8. Now, if the facts of the present case are perused,

it transpires from the record that though the cheques were

issued from the joint account, they were not signed by the

applicant; the applicant cannot be held liable for the offence

under Section 138 of the NI Act only for the reason that he

is a joint account holder. Section 138 of the NI Act clearly

envisages that the drawer of the cheque is responsible for

the offence. In this case the drawer of the cheque is

respondent no.3 and not the applicant.

9. In the case of Aparna A Shah (supra) relied on by

learned advocate for the applicant, it is held in paragraphs

27 and 28 as under:

"27) In the light of the above discussion, we hold that under Section 138 of the Act, it is only the drawer of the

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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.

28) We also hold that under Section 138 of the N.I. Act, in case of issuance of cheque from joint accounts, a joint account holder cannot be prosecuted unless the cheque has been signed by each and every person who is a joint account holder. The said principle is an exception to Section 141 of the N.I. Act which would have no application in the case on hand. The proceedings filed under Section 138 cannot be used as an arm twisting tactics to recover the amount allegedly due from the appellant. It cannot be said that the complainant has no remedy against the appellant but certainly not under Section 138. The culpability attached to dishonour of a cheque can, in no case "except in case of Section 141 of the N.I. Act" be extended to those on whose behalf the cheque is issued. This Court reiterates that it is only the drawer of the cheque who can be made an accused in any proceeding under Section 138 of the Act. Even the

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High Court has specifically recorded the stand of the appellant that she was not the signatory of the cheque but rejected the contention that the amount was not due and payable by her solely on the ground that the trial is in progress. It is to be noted that only after issuance of process, a person can approach the High Court seeking quashing of the same on various grounds available to him.

Accordingly, the High Court was clearly wrong in holding that the prayer of the appellant cannot even be considered. Further, the High Court itself has directed the Magistrate to carry out the process of admission/denial of documents. In such circumstances, it cannot be concluded that the trial is in advanced stage."

10. It is also fruitful to refer to the judgment in case

of Alka Khandu Avhad V/s Amar Syamprasad Mishra reported in (2021)4 SCC 675, equivalent citation is AIR

Online 2021 SC 124, wherein it is held in paragraphs 7,8

and 8.1 as under:

"7. On a fair reading of Section 138 of the NI Act, before a person can be prosecuted, the following conditions are required to be satisfied:

i) that the cheque is drawn by a person and on an account maintained by him with a banker;

ii) for the payment of any amount of money to another person from out of that account for the discharge, in whole

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or in part, of any debt or other liability; and

iii) the said cheque 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.

Therefore, a person who is the signatory to the cheque and the cheque is drawn by that person on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned by the bank unpaid, such person can be said to have committed an offence. Section 138 of the NI Act does not speak about the joint liability. Even in case of a joint liability, in case of individual persons, a person other than a person who has drawn the cheque on an account maintained by him, cannot be prosecuted for the offence under Section 138 of the NI Act. A person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque."

11. In view of above settled position of law and after

considering the facts as alleged in the complaints and

circumstances of the present case, as prima facie ingredients

of Section 138 NI Act are not satisfied and the applicant is

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not liable, the continuation of further proceedings pursuant to

the said complaints will cause greater hardships to the

applicant and no fruitful purpose would be served if such

further proceedings are allowed to be continued as the same

are nothing but abuse of process of law. The Court must