2016 (6) TMI 1448 - HC - Indian Laws

Dishonor of Cheque - drawer of cheque - liability of a person who draws a cheque on an account maintained by him, for paying payee - Section 138 of NI Act - HELD THAT - In the present case, it is admitted fact that the drawer of the cheque was the respondent No. 2, who had drawn the cheque bearing number 224385 for ₹ 4 Lakhs in the bank account maintained by him in HDFC Bank, Bharat Talkies, Hamidia Road Branch, Bhopal, towards the consideration of the sale. Therefore, the respondent No. 2 was the drawer of the cheque. The scope of section 138 of the Negotiable Instruments Act can be held that, it is very clear that in order to attract the provision, the following essentials have to met for attracting a liability under section 138 of the Act. The person who is to be made liable should be the drawer of the cheque and should have drawn the cheque 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 discharge in whole or part, of any debt or other liability. This Court is of the view that the respondent No. 2 has signed and issued the cheque is only liable under section 138 of the Act, even though the sale deed was executed in favour of the petitioner - Petition allowed.

Summary

Issues:
Challenge to legality and propriety of taking cognizance of offence under section 138 of the Negotiable Instruments Act.
Petition under section 482 of the Code of Criminal Procedure for quashment of the order passed in Criminal Case No. 1418/2010.
Liability under section 138 of the Negotiable Instruments Act for the drawer of the cheque.

Analysis:

1. Challenge to legality and propriety of taking cognizance of offence under section 138 of the Negotiable Instruments Act:
The petitioner challenged the legality of the order taking cognizance of the offence under section 138 of the Negotiable Instruments Act. The petitioner contended that the cheque in question was not signed by him, and therefore, the criminal case could not proceed against him. The revision filed by the petitioner was dismissed by the Additional Sessions Judge, who held that once cognizance has been taken in a summons trial case, the Judicial Magistrate cannot discharge the accused. Hence, the order taking cognizance was deemed legal and proper.

2. Petition under section 482 of the Code of Criminal Procedure for quashment of the order:
The petitioner filed a petition under section 482 of the Code of Criminal Procedure seeking quashment of the order passed in Criminal Case No. 1418/2010. The petitioner's counsel argued that the petitioner, not being the signatory of the cheque, cannot be prosecuted under section 138 of the Negotiable Instruments Act. Reference was made to a decision by the Apex Court which emphasized that the person who draws a cheque on an account maintained by him alone attracts liability under section 138. The petitioner's argument was based on the fact that the cheque was drawn by respondent No. 2, who was the drawer of the cheque, and therefore, only the drawer could be held liable under section 138.

3. Liability under section 138 of the Negotiable Instruments Act for the drawer of the cheque:
The court referred to the legal position established by the Supreme Court in previous cases regarding liability under section 138 of the Negotiable Instruments Act. It was emphasized that the person to be made liable should be the drawer of the cheque, who has drawn the cheque on an account maintained by him for payment to another person. In this case, it was established that respondent No. 2 was the drawer of the cheque, and therefore, only he could be held liable under section 138. The court concluded that the petitioner, not being the signatory of the cheque, cannot be prosecuted under section 138. As a result, the petition under section 482 of the Code of Criminal Procedure was allowed, and the proceedings against the petitioner in Criminal Complaint Case No. 1418/2010 were quashed.