Vishal Chandubhai Gamit vs State Of Gujarat
2024 Latest Caselaw 4797 Guj

Gujarat High Court

Vishal Chandubhai Gamit vs State Of Gujarat on 18 June, 2024

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     R/CR.MA/16758/2019                                           ORDER DATED: 18/06/2024

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             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

     R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
                 FIR/ORDER) NO. 16758 of 2019

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                               VISHAL CHANDUBHAI GAMIT
                                        Versus
                               STATE OF GUJARAT & ANR.
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Appearance:
MR ANKUR Y OZA(2821) for the Applicant(s) No. 1
MS MONALI BHATT, APP for the Respondent(s) No. 1
SAGAR J SHAH(9447) for the Respondent(s) No. 2
VIDIT S SHARMA(7365) for the Respondent(s) No. 2
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     CORAM:HONOURABLE MR. JUSTICE DIVYESH A. JOSHI

                                    Date : 18/06/2024

                                         ORAL ORDER

1. By way of preferring this application under Section 482 of the Code of Criminal Procedure, 1973, the applicant - original accused No. 2 seeks to invoke the inherent powers of this Court, praying for quashing of the proceedings of Criminal Case No.773 of 2019 pending in the Court of learned Chief Judicial Magistrate, Vyara as well as order dated 09.07.2019 passed by learned Chief Judicial Magistrate, Vyara in Criminal Case No.773 of 2019, whereby process came to be issued against the applicant qua him.

2. The case of the prosecution can be summarized as under:

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2.1. That the brother of the accused No.1 viz. Ashish Chandulal Gamit borrowed an amount of Rs.15 lakh from respondent No.2 - original complainant against which he has given a cheque of ICICI Bank as security. It is the case of the complainant that on 16.02.2018, the complainant has deposited the said cheque in his account, however, due to insufficient fund, the same was dishonoured. Therefore, a notice came to be issued to said Ashish Chandulal Gamit (brother of accused No.2 and son of accused No.1) through an advocate, which was duly served to him. Thereafter, the complainant registered a complaint under the provisions of Section 138 of the Negotiable Instruments Act before the Court of learned Chief Judicial Magistrate, Vyara against Ashish Chandulal Gamit. As per the case of the complainant, a compromise came to be arrived at between the rival parties and therefore a settlement deed was executed wherein accused No.1 has also signed as a witness. As the dispute was settled between the parties, the complainant has withdrawn the said complainant, which was filed against the brother of the applicant, in the Lok Adalat. It is the case of the complainant that as the brother of applicant viz. Ashish Chandulal Gamit failed to comply the terms and conditions of the settlement deed, complainant issued notice to Ashish Chandulal Gamit, accused No.1 and another person through his advocate, which was duly served upon them. As per the case of the complainant, as the notice was served upon accused No.1, he has

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given false promises to the complainant to repay the said amount. Thereafter, the accused No.1 issued a cheque dated 15.05.2019 in favour of the complainant and asked the complainant to deposit the said cheque after 15.05.2019. It is the case of the complainant that the accused No.1 has signed the said cheque in his presence. The said cheque issued by the accused No.1 to the complainant was of a joint account wherein accused No.2 is also one of the account holders along with accused No.1. As per the case of the complainant, though the said cheque is signed by accused No.1 alone, it appears that accused No.2 has also given his consent for issuance of said cheque.

Thus, the complainant has also joined accused No.2 in the complaint in question.

2.2. As per the case of the complainant, he has deposited the said cheque on 17.05.2019 but due to insufficient fund, the same was returned with an endorsement of 'fund insufficient'. Thus, the complainant issued notice under the provisions of the Negotiable Instruments Act to the accused persons. Thereafter, the complainant lodged complainant under Section 138 of the Negotiable Instruments Act before the Court of Chief Judicial Magistrate, Vyara. The learned Chief Judicial Magistrate, after appreciating the material available on record, was pleased to issue process against the accused persons, which was duly served to the accused persons. As soon as the process came to be issued, applicant has preferred

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present application.

3. Learned advocate Mr. Oza submits that the applicant has been arraigned as an accused merely because he is the joint account holder along with accused No.1, who has issued the cheque in favour of the complainant and therefore the applicant has wrongly been dragged into the criminal offence by the complainant. He further submits that it is well settled that the joint account holder cannot be prosecuted as he is not directly or indirectly connected with the crime in question. Learned advocate Mr. Ankur Y. Oza submits that the brother of the applicant has borrowed money from the complainant and he has issued a cheque as security. However, as the brother of the applicant was not able to repay the said amount, the complainant has deposited the said cheque, which was returned with an endorsement 'insufficient fund'. The complainant, therefore, after following due procedure, filed a criminal complaint against the brother of the applicant, which was ultimately withdrawn by the complainant in Lok Adalat on the strength of compromise arrived at between the rival parties. As per the case of the complainant, the father of the applicant - accused No.1 has also signed as a witness in the settlement deed executed between the parties. Learned advocate Mr. Oza submits that admittedly the applicant has not signed the said compromise deed as a witness and he was not party to the said compromise deed.

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4. Learned advocate Mr. Oza further submits that as per the case of the complainant, as the brother of the applicant has failed to comply with the terms of the settlement deed, he issued notice through his advocate to accused No.1 - father of the applicant, brother of the applicant and one another person. However, admittedly, the complainant has not issued the said notice to the applicant.

5. Learned advocate Mr. Oza further submits that the cheque, which was returned, was issued by the accused No.1 - father of the applicant and not by the applicant and admittedly at the time of issuance of cheque, applicant was not present. The applicant was not at all aware about the fact of issuance of the cheque by the accused No.1 in favour of the complainant and he came to know only when the process came to be issued by the learned Trial Court. Learned advocate Mr. Oza has put reliance upon the case law of Hon'ble Apex Court in the case of Aparna A. Shah v. Sheth Developers Private Limited, reported in 2013 (8) SCC 71 and more particularly the observations made by the Hon'ble Apex Court in para 13 to 18 of the said judgment. Learned advocate Mr. Oza has also put reliance upon the decision of the Delhi High Court in the case of Gita Berry v. Genesis Educational Foundation, reported in (2008) 151 DLT 155 and submitted that in the said case, in identical set of facts, the Delhi High Court has quashed the proceedings against the petitioner

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concerned. In the said case, the petitioner was the wife and she filed a petition under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing of the complaint filed under Section 138 of the N.I. Act. The case of the petitioner is that the offence under Section 138 of the N.I.Act cannot be said to have been made out against her only on the ground that she was joint account holder along with her husband and she has pointed out that she has neither drawn nor issued the cheque in question and therefore according to her, the complaint against her was not maintainable. The Delhi High Court, noting the above said argument, held that nothing was elicited to the effect that the petitioner was responsible for issuance of cheque in question and quashed the proceedings so far as the petitioner therein is concerned. Learned advocate Mr. Oza submits that considering the principle of law laid down by the Hon'ble Apex Court as well as Delhi High Court in the aforesaid decisions, proceedings instituted against the applicant accused are required to be quashed as it is nothing but sheer abuse of process of the Court.

6. Learned advocate Mr. Vidit Sharma appearing for the original complainant has objected present application with vehemence and submitted that present applicant accused is one of the joint account holders. He further submits that it is an admitted position of fact that accused no.1 - father of the

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applicant accused has drawn cheque in favour of the complainant which was dishonoured and as per the statutory provisions of law, more particularly, as per the provisions of Section 141 of the Negotiable Instruments Act, liability of applicant being joint account holder can also be extended and therefore he has been joined as one of the accused in the complaint. He further submits that at the time of recording the verification of the complainant, the learned Trial Court has gone through the provisions of law and thereafter passed the order of issuance of process against the accused persons under Section

204. Thus, considering the above stated factual aspects, it can be said that involvement of the present applicant accused in the commission of crime is clearly found out. Hence, proceedings instituted against the present applicant accused are not required to be quashed and set aside.

7. Learned APP Ms. Monali Bhatt submits that immediately after passing of the impugned order whereby process has been issued against the applicants, the applicants have approached this Court and the Coordinate Bench of this Court has, vide order dated 03.09.2019, reserved liberty in favour of the applicants to file an application for exemption from personal appearance and to seek adjourment before the learned Trial Court on account of pendency of present proceedings. The said interim relief has been extended from time to time and therefore the

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learned Trial Court is not able to proceed further with the trial. She further submits that the cheque which was dishonoured was issued by the father of the applicant i.e. accused No.1 and the applicant being the joint account holder, he has been arraigned as an accused and therefore it cannot be said that the learned Trial Court has committed any error while passing the impugned order. Therefore, the present application being devoid of merit is required to be rejected.

8. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for consideration of this Court is whether the FIR in question deserves to be quashed.

9. Before adverting to the issue involved in the present matter, at this juncture, I would like to refer to and rely upon the observations made by the Hon'ble Apex Court in the case of Aparna A. Shah (supra), wherein the Hon'ble Apex Court has observed and held as under:

"13) 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

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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.

14) It is not in dispute that the first respondent has not filed any complaint under any other provisions of the penal code and, therefore, the argument pertaining to the

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intention of the parties is completely misconceived. We were taken through the notice issued under the provisions of Section 138, reply given thereto, copy of the complaint and the order issuing process. In this regard, Mr.Mukul Rohatgi, learned senior counsel for the respondent after narrating the involvement of the appellant herein and her husband contended that they cannot be permitted to raise any objection on the ground of concealing/suppressing material facts within her knowledge. For the said purpose, he relied on Oswal Fats and Oils Limited vs. Additional Commissioner (Administration), Bareilly Division, Bareilly and Others, (2010) 4 SCC 728, Balwantrai Chimanlal Trivedi vs. M.N. Nagrashna & Ors., AIR 1960 SC 1292, J.P. Builders & Anr. vs. A. Ramadas Rao & Anr., (2011) 1 SCC

429. Inasmuch as the appellant had annexed the relevant materials, namely, copy of notice, copy of reply, copy of the complaint and the order issuing process which alone is relevant for consideration in respect of complaint under Section 138 of the N.I. Act, the argument of learned senior counsel for Respondent No.1 that the stand of the appellant has to be rejected for suppressing of material facts or relevant facts, cannot stand. In such circumstances, we are of the view that the case law relied upon by the contesting respondent No.1 is inapplicable to the facts of the present case.

15) 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

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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.

16) The above discussion with reference to Section 138 and the materials culled out from the statutory notice, reply, copy of the complaint, order, issuance of process etc., clearly show that only the drawer of the cheque being responsible for the same.

17) In addition to our conclusion, it is useful to refer some of the decisions rendered by various High Courts on this issue.

18) Learned Single Judge of the Madras High Court in Devendra Pundir vs. Rajendra Prasad Maurya, Proprietor, Satyamev Exports S/o. Sri Rama Shankar Maurya, 2008 Criminal Law Journal 777, following decisions of this Court, has concluded thus:

"7. This Court is of the considered view that the above proposition of law laid down by the Hon'ble Apex Court in the decision cited supra is squarely applicable to the facts of the instant case. Even in this case, as already pointed out, the first accused is admittedly the sole proprietrix of the concern namely, "Kamakshi Enterprises" and as such, the question of the second accused to be vicariously held liable for the offence said to have been committed by the first accused

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under Section 138 of the Negotiable Instruments Act not at all arise." After saying so, learned Single Judge, quashed the proceedings initiated against the petitioner therein and permitted the Judicial Magistrate to proceed and expedite the trial in respect of others.

10. Now, the facts of the present case are required to be considered. It is found out from the complaint that the brother of applicant borrowed some money from the complainant against which he has given cheque to the complainant as security and as the brother of the applicant has not repaid the said amount, complaint lodged by complainant before the concerned competent Court. However, at the end of the day, the said complaint came to be withdrawn by the complainant on the basis of settlement arrived at between the parties. A settlement deed also came to be executed between the parties and according to the complainant, father of the applicant - original accused No.1 also signed said settlement deed as a witness. However, admittedly, the present applicant is not a party to the said deed and he has not signed as a witness also. Later on, as the brother of the applicant failed to comply with the terms of the settlement deed, complainant issued notice to the brother of the applicant, father of the applicant - original accused No.1 and one another person. It is also an admitted fact that the said notice was not issued to the present applicant. Thereafter, the father of the applicant - original accused has issued

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one cheque of joint account, wherein, applicant is one of the joint account holders along with his father, in favour of the complainant. However, the said cheque was returned with an endorsement 'insufficient fund'. It is an admitted fact that applicant has not signed the said cheque. The complainant has drawn inference that applicant has also given his consent for issuance of the said cheque and therefore being a joint account holder he implicated the applicant as well. However, the applicant came to know about issuance of cheque only when the process came to be issued to the applicant. As observed by the Hon'ble Apex Court in the aforesaid judgment, 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. In the instant case, though the cheque issued is pertaining to joint account, in the opinion of this Court, considering the facts of the present case the applicant has nothing to do with issuance of cheque by his father - accused No.1 which was issued to the complainant for payment of outstanding dues of his another son and it is well settled that no one is to be held criminally liable for an act of another. Moreover, from the record, nothing is elicited to the effect that the applicant is in any way responsible for issuance of

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cheque in question.

11. Now, at this juncture, I would like to refer to and rely upon the observations made by the Hon'ble Apex Court in the case of Achin Gupta v. State of Haryana and Another, reported in 2024 4 Supreme 347, wherein the Hon'ble Apex Court has observed and held as under:

"20. It is now well settled that the power under Section 482 of the Cr.P.C. has to be exercised sparingly, carefully and with caution, only where such exercise is justified by the tests laid down in the Section itself. It is also well settled that Section 482 of the Cr.P.C. does not confer any new power on the High Court but only saves the inherent power, which the Court possessed before the enactment of the Criminal Procedure Code. There are three circumstances under which the inherent jurisdiction may be exercised, namely (i) to give effect to an order under the code, (ii) to prevent abuse of the process of Court, and (iii) to otherwise secure the ends of justice.

xxx xxx xxx

23. In R.P. Kapur v. State of Punjab, AIR 1960 SC 866, this Court summarised some categories of cases where inherent power can, and should be exercised to quash the proceedings:

(i) where it manifestly appears that there is a legal bar against the institution or continuance e.g. want of sanction.

(ii) where the allegations in the first information report or complaint taken at its face

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value and accepted in their entirety do not constitute the offence alleged.

(iii) where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge."

12. Thus, if the aforesaid observations made by the Hon'ble Apex Court are considered in context with the facts of the present case, in that event, in the opinion of this Court, this is a clear cut case of abuse of process of the Court.

13. For the foregoing reasons, I am inclined to allow this application and the same is accordingly allowed. The impugned order dated 09.07.2019 passed by learned Chief Judicial Magistrate, Vyara in Criminal Case No.773 of 2019 and the proceedings of Criminal Case No.773 of 2019 pending in the Court of learned Chief Judicial Magistrate, Vyara are hereby quashed and set aside qua the applicant.

14. It is needless to say that the aforesaid observations will not come in the way of complainant to prosecute the case against original accused No.1 before the learned Trial Court.

(DIVYESH A. JOSHI,J) LAVKUMAR J JANI