Prafulla Mishra vs Laba Mallick
2025 Latest Caselaw 6365 Ori

Orissa High Court

Prafulla Mishra vs Laba Mallick on 30 June, 2025

Author: Chittaranjan Dash

Bench: Chittaranjan Dash

           IN THE HIGH COURT OF ORISSA AT CUTTACK
                         CRLMC No. 3464 of 2017




  Prafulla Mishra                ....                       Appellant
                                            Mr.
                                             r. Suryakanta Dwibedi
                                                          Advocate

                               -versus-

  Laba Mallick                   ....                     Respondent
                                               Mr. Abhilash Mishra
                                                         Advocate
                            CORAM:
  THE HON'BLE
          BLE MR. JUSTICE CHITTARANJAN DASH

                  Date of Judgment: 30.06.2025

Chittaranjan Dash, J.

1. By means of this application, the Petitioner seeks indulgence of this Court, for quashing/setting aside the order dated 03.08.2017 passed by the learned S.D.J.M., Sonepur in ICC Case No.2 of 2017 under Annexure-1.

Annexure

2. The background facts of the case are that the Petitioner, Smt. Prafulla Mishra, was arrayed as one of the co-accused co in I.C.C. Case No. 2 of 2017 pending before the learned S.D.J.M., Sonepur, for alleged commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The complainant, nt, Laba Mallick (Opposite Party No. 2), alleged that accused no.1, son of the Petitioner,, purchased a piece of land for a

consideration of ₹15,40,000/- in the name of accused No. 2 (the Petitioner).

). Of the total amount, ₹6,40,000/- was paid in cash, and the remaining ₹9,00,000/-

₹9,00,000/ was paid by two post-dated dated cheques drawn on the account of accused No. 1. However, upon presentation to the bank, both cheques were dishonoured due to insufficient funds, which was communicated to the complainant on 04.01.2017. Despite pite receiving a legal demand notice on 28.01.2017 asking them to pay the dishonoured amounts within the statutory period, the accused failed to do so. Consequently, the complainant instituted the present proceedings before the learned S.D.J.M., Sonepur, who ho took cognizance of the offence under Section 138 of the N.I. Act against the Petitioner as well. Being aggrieved by the order of cognizance, the Petitioner has approached this Court by filing the present CRLMC under Section 482 of the Cr.P.C. for quashing ng of the entire criminal proceedings on the ground that she is neither the drawer nor signatory of the dishonoured cheques and cannot be held vicariously liable under the law.

3. Mr. Dwibedi, appearing on behalf of the Petitioner submits that she is only the mother of the co-accused accused and was not a party to the underlying transaction nor to the dishonoured instruments. The record demonstrates that the post-dated post dated cheques were drawn and issued by accused No. 1, and the Petitioner neither signed the cheques nor maintained intained the account upon which they were drawn. Mr. Dwibedi asserts that the Petitioner cannot be fastened with criminal liability under Section 138 of the Negotiable Instruments Act, 1881, which requires that the person who "draws" the cheque is liable upon pon its dishonour. He further states that vicarious liability

under the N.I. Act is statutorily attracted only in cases involving companies or juridical persons, not in situations like the present one where the Petitioner is merely a family member. Mere registration re of the property in her name cannot imply criminal intent or liability under the N.I. Act. Mr. Dwibedi submits that the complaint and the cognizance order lack any specific allegations against the Petitioner,, and the Magistrate took cognizance mechanically, me without appreciating the absence of the Petitioner's 's role as a drawer or signatory. The learned counsel presses that allowing the proceedings to continue against the Petitioner would cause undue harassment and defeat the ends of justice and prays prays to quash the order of cognizance dated 03.08.2017 and all proceedings against the Petitioner.

4. Mr. Mishra, learned counsel for the Opposite Party, argues that the criminal proceedings initiated under Section 138 N.I. Act are fully justified as the Petitioner was the named purchaser and direct beneficiary of the transaction; thus, her role cannot be overlooked. He further argues that the dishonoured cheques were issued to satisfy the balance sale consideration for a property registered in her name, making her an active participant in the transaction. Mr. Mishra contends that the plea that she is not a signatory cannot absolve her as she is vicariously liable.

liable Whether she was involved in the transaction and liable along with accused No. 1 is a factual issue to be decided at trial. Mr. Mishra further places that the learned Magistrate rightly took cognizance after considering the material placed on record, and there is no abuse of process justifying quashment, and this petition is hence liable to be

dismissed to allow the trial to proceed in accordance with law. Mr. Mishra relied on relied on the decision in the matters of S.P. Mani and Mohan Dairy Vs. Snehalatha Elangovan, reported in MANU/SC/1189/2022 State of Haryana and Others Vs. Ch. MANU/SC/1189/2022, Bhajan Lal and others reported in AIR 1992 SC 604, and Laxmi Dyechem -Vrs.- State of Gujurat and others reported in 2013 (13) SCC 375.

5. For ready reference and better appreciation of the legal position, the relevant provision provision of Section 138 of the Negotiable Instruments Act, 1881, is extracted hereinbelow:

hereinbelow

138. Dishonour of cheque for insufficiency, etc., of funds in the account.--Where 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 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--

unless

(a) the cheque has been presented 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 the said amount of money by giving a notice; in writing, to the drawer of the cheque, 5 [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 Explanation. For the purposes of this section, "debt of other liability" means a legally legally enforceable debt or other liability.

6. Considering the aforesaid provision, it is evident that liability under Section 138 N.I. Act rests solely upon the person who has drawn the cheque on an account maintained by him. In the present case, there is no material on record to connect the petitioner petitione with the dishonoured cheques, as it is undisputed that they were drawn and signed by her son, Ramakanta Mishra, from his own account. The statutory scheme underscores that only the drawer of the cheque can be held liable for its dishonour. The petitioner is neither a signatory to the instruments nor a partner in any business nor in any manner associated with the account or transaction in question. Thus, there exists no legal basis to invoke criminal liability under Section 138 of the N.I. Act against the petitioner, and the continuation of proceedings against her is unsustainable in law.

7. The dishonoured cheques in question, bearing cheque Nos. 000021 dated 13.10.2016 for ₹5,00,000/- and 000022 dated 13.10.2016 for ₹4,00,000/-,, were both drawn on HDFC Bank,

Sonepur Branch, by accused No. 1, Ramakanta Mishra, from his account bearing No. 50100002272557. The petitioner herein, , is the mother of the drawer and was merely the registered owner of the purchased property. The transaction was conducted entirely by her son and all liabilities arising from the dishonour of the cheques lie upon him as the drawer.

8. The record also indicates that the petitioner was neither the signatory nor the account-holder account holder of the dishonoured cheques, and the property was purchased in her her name at the behest of accused No. 1. No material has been produced to show any active role of the petitioner in the financial transaction, and as such, liability cannot be fastened upon her under Section 138 of the Negotiable Instruments Act, 1881, especially especially when the cognizance taken is not under any provision of the IPC.

9. The decisions referred by the learned counsel for the Opposite Parties are factually distinguishable and do not apply to the present case. In S.P. Mani and Mohan Dairy vs. Snehalatha Elangovan,, the matter involved a partnership firm, which is not the factual situation here. Similarly, the decision in State of Haryana and Others vs. Ch. Bhajan Lal and Others lays down broad guidelines for the exercise of jurisdiction under Section 482 Cr.P.C.

C While those principles are well-settled well settled and undisputed, they have no bearing on the present controversy, given the distinct factual matrix. Further, the decision in Laxmi Dyechem v. State of Gujarat and Others, pertains to a case where the dishonour arose due to the drawer's signature not matching the specimen held by the bank, a situation entirely different from the present matter.

10. Consequently, the facts enumerated in the cited decisions have no relevance to the present set of circumstances. In view vi of the above, none of the judgments relied upon by the Opposite Parties is applicable to the facts of the present case and therefore cannot advance their case. On the contrary, the cognizance taken against the petitioner, being neither in conformity with with law nor supported by the facts on record, deserves to be quashed.

11. Accordingly, the order dated 03.08.2017 is set aside.

12. The learned trial court is directed to proceed with the case against the remaining accused as expeditiously as possible, keeping in view iew that the matter pertains to the year 2017.

(Chittaranjan Dash) Judge

Bijay

Location: HIGH COURT OF ORISSA