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Judgment
ORDER:
This Criminal Petition is filed by the petitioner/accused No.2 to quash the proceedings against him in C.C.No.283 of 2022 on the file of the Judicial Magistrate of First Class, Kaikaluru, for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as „the Act‟).
The case of the petitioner is thus: Respondent No.2 filed a complaint under Section 138 of the Negotiable Instruments Act against the petitioner and one other person, alleging that the cheque issued by respondent No.3 was returned for insufficiency of funds in the account maintained by respondent No.3. However, this petitioner is in no way concerned with the cheque alleged to have been issued by respondent No.3. He is not an authorized person of the petitioner. He has no knowledge of the transactions that occurred between respondent Nos.2 and 3. Further, having regard to the ingredients of Section 138 of the Act, the complaint against the petitioner is not maintainable. The petitioner neither issued nor signed the cheque said to have been issued by respondent No.3, and continuation of the proceedings against the petitioner is nothing but an abuse of the process of law.
Heard Smt. V. Dyumani, learned counsel for the petitioner, and Sri G. Srinivasula Reddy, learned counsel for respondent Nos.1 and 2.
Perused the petition and the material available on record, including the judgments relied upon by the learned counsel for the petitioner.
As seen from the record, believing the representation of respondent No.3, respondent No.2 credited an amount of Rs.9 Lakhs into the account of the petitioner, as respondent No.3 had agreed to provide fish feed. However, neither respondent No.3 nor the petitioner supplied the said material. After repeated demands, respondent No.3 issued four (04) cheques bearing Nos.439692, 439693, 439694 and 439695, for Rs.2 Lakhs each. On presentation, the said cheques were returned for insufficiency of funds. Thereafter, after issuing statutory notices, respondent No.2 filed a complaint under Section 138 of the Act against the petitioner as well as respondent No.3, and the same was registered as C.C.No.283 of 2022 on the file of the Judicial Magistrate of First Class, Kaikaluru.
Learned counsel for the petitioner would mainly argue that, to attract Section 138 of the Act, the ingredients of the said provision have to be satisfied. In the present case, even according to the version of respondent No.2, the aforementioned cheques were issued by respondent No.3 and not by the petitioner. The cheques were drawn on the account maintained by respondent No.3 and not on an account maintained by the petitioner. Therefore, the complaint under Section 138 of the Act is not maintainable against the petitioner.
Per contra, learned counsel for respondent No.2 argued that the petitioner, having agreed to supply fish feed and having received an amount of Rs.9 Lakhs, failed to supply the fish feed and caused the aforementioned cheques to be issued to respondent No.2, who is none other than his authorized agent. Therefore, the complaint against the petitioner is maintainable. Learned counsel further argued that respondent No.2 had also filed another complaint for the offence under Section 318 of the Bharatiya Nyaya Sanhita, 2023, against the petitioner as well as respondent No.3, and the same is yet to be numbered.
In this regard, it is apposite to refer to Section 138 of the Negotiable Instruments Act, which reads as follows:-
“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 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—
(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.]”
The very words of the said Section make it clear that the cheque must be drawn on an account maintained by the person who issues it. To substantiate the contention of the learned counsel for the petitioner, reliance is placed on the judgment of the Hon‟ble Apex Court in P.J. Agro Tech Limited and others v. Water Base Limited1, wherein the Hon‟ble Apex Court has held thus:
“8……………. From a reading of the said Section, it is very clear that in order to attract the provisions thereof a cheque which is dishonoured will have to be drawn by a person on an account maintained by him with the 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. It is only such a cheque which is dishonoured which would attract the provisions of Section 138 of the above Act against the drawer of the cheque. 9. In the instant case, the cheque which had been dishonoured may have been issued by the Respondent No.11 for discharging the dues of the Appellant No.1 Company and its Directors to the Respondent No.1 Company and the Respondent Company may have a good case against the Appellant No.1 Company for recovery of its dues before other fora, but it would not be sufficient to attract the provisions of Section 138 of the 1881 Act. The Appellant Company and its Directors cannot be made liable under Section 138 of the 1881 Act for a default committed by the Respondent No.11. An action in respect of a criminal or a quasi-criminal provision has to be strictly construed in keeping with the provisions alleged to have been violated. The proceedings in such matters are in personam and cannot be used to foist an offence on some other person, who under the statute was not liable for the commission of such offence.”
Further, in Alka Khandu Avhad v. Amar Syamprasad Mishra and others2, the cheque was issued by the wife, who was not a signatory to the cheque. In such circumstances, the Hon‟ble Apex Court quashed the proceedings against the wife, who had not issued the said cheque from an account maintained by her. Thus, the main ingredient for attracting the offence under Section 138 of the Act is that the cheque must be drawn on an account maintained by the person who issued the cheque towards the discharge of a debt or other liability. In other words, the account must be maintained by the accused herself or himself. Admittedly, in the present case, the petitioner is neither a signatory to the cheque nor was the cheque issued from an account maintained by him. Respondent No.2 has also not filed any authorization showing the relationship between the petitioner and respondent No.3.
It is needless to say that respondent No.2 has every right to proceed further in accordance with law, if so advised, seeking recovery of the amount or any other relief.
For the foregoing reasons, this Court is of the considered view that continuation of the proceedings against the petitioner is nothing but an abuse of the process of law, in view of the principles laid down by the Hon‟ble Apex Court in State of Haryana and Others v. Bhajan Lal and Others3.
In the result, and in view of the aforementioned discussion, this Criminal Petition is allowed, and the proceedings against the petitioner/accused No.2 in C.C.No.283 of 2022 on the file of the Judicial Magistrate of First Class, Kaikaluru, are hereby quashed.
As a sequel thereto, the pending miscellaneous petitions, if any, shall stand closed.