Mahesh Kumar vs Taxi Drivers Co-operative Society Ltd.

K. Hema, J.—This petition is filed for granting special leave to file appeal.

The petitioner filed a private complaint against respondents 1 to 3 alleging offence u/s 138 of the Negotiable Instruments Act, 1881. According

to the complainant a cheque was issued by first respondent - Society and its President and Secretary who are the second and third respondents as

persons in charge and responsible to the Society at the relevant time. A notice was issued to respondents 2 and 3, the President and Secretary.''

But they did not pay the amount. Hence complaint filed against President and Secretary.

The appellant adduced evidence and on an analysis of the evidence, Trial Court convicted accused 1 to 3. All the three accused however, filed

an appeal challenging the conviction and sentence against 2nd and 3rd accused (No sentence was passed on accused No. 1). In appeal,

conviction and sentence were set aside. Hence this petition is filed for special leave to file appeal against order of acquittal.

Appellate Court, after evaluating evidence and records, held as follows:

Here the accused Nos. 2 and 3 are not named but are shown by their official designation in the company only. To attract a prosecution of accused

No. 2 and 3 by virtue of sub-s.(1) of S. 141 their names should have been stated in the complaint. But that is not done in the present case. The

first accused society is the drawer of the cheque and the accused Nos. 2 and 3 are only the authorised signatories of me cheque for and on behalf

of the society. The proviso (b) to Section 138 of the Act stipulates that the offence would be complete only when there is failure of the drawer of

the cheque to make payment within 15 days of receipt of the notice demanding the amount of the bounced cheque. Hence the very averment of the

complainant in the complaint is that the complainant has sent notice only to the accused Nos. 2 and 3 and that too only in their designation in the

society. Ext. P4 statutory notice itself reads that the notice was addressed to the accused Nos. 2 and 3 in their official designation and not in their

names. No notice is even sent to 1st accused, Society which is the drawer of the cheque demanding the amount of the cheque. The offence u/s

138 of the Act is complete only upon such giving of the demand notice and the failure of the drawer to pay the cheque amount in the case.

Here, no notice under the proviso to Section 138 was given to the Society. The notice is given only to accused Nos. 2 and 3. When a notice is not

even served on the society which is the drawer of Ext. P1 cheque, that drawer (the 1st accused society) cannot be held guilty of the offence u/s

138 of the Act. When the Society is not shown as guilty u/s 138 of the Act, the accused Nos. 2 and 3 are not liable to be convicted.

Learned Counsel for petitioner submitted that Trial Court convicted the accused, '' but Appellate Court acquitted them for the reasons that the

President and Secretary who are 2nd and 3rd accused were not named in the complaint, but they were shown in their official designation and that

to attract the prosecution by virtue of S. 141 of Negotiable Instruments Act, their names ought to have been stated in the complaint.

Learned Counsel for respondent argued that no notice was issued u/s 138(b) of N.I. Act to first accused, who is the society and without any

such notice President and Secretary, who are allegedly acting on behalf of the society cannot be held guilty for offence u/s 138 of the Act. He also

relied upon the decision of this Court reported in Pramod Vs. C.K. Velayudhan and Others, in support of the contentions. There is absolutely no

error or illegality in the order of the Appellate Court, it is submitted. It is also argued that the Trial Court failed to take note of this fact and

convicted accused Nos. 2 and 3. It is also pointed out that first accused society was convicted without any basis, by Trial Court and it is interesting

to note that Trial Court did not impose any sentence on the society.

On hearing both sides and on going through the judgment of the Appellate Court, particularly the portions extracted above, I am satisfied that

none of the accused can be convicted for offence u/s 138 of Negotiable Instruments Act, 1881 since no notice is issued to the society (A 1) u/s

138(b), the society cannot be convicted for offence u/s 138 of N.I. Act. The main offender is the society and it cannot be convicted. No person

who is stated to be in charge of the society can also be convicted. It is only if the society (A1) is found guilty u/s 138 of N.I. Act, the person who

are referred to in S. 141 also will be deemed to be guilty of offence u/s 138 of N.I. Act.

In this case, no notice is issued u/s 138(b) of N.I. Act to the Society and in the absence of issuance of such notice no offence will lie against

society u/s 138 of the N.I. Act. Since society is not liable, its President and Secretary also cannot be made liable. Hence there is no reason to

reverse the findings. I am not inclined to grant special leave.

This petition is dismissed.