2018 (11) TMI 1301 - HC - Indian Laws

Liability on account of dishonor of Cheque - contention of the petitioner has been that the cheque in question does not bear his signatures and that the signatory thereof is his wife Taruna Kingrani and that the account on which the cheque had been been drawn belongs to M/s Thought Work Events which is the sole proprietorship concern of his wife and that thus the complaint against the petitioner cannot be sustained and is liable to be quashed. Held that - Reliance placed in the case of Hon ble Supreme Court in Aparna A. Shah v. Sheth Developers private Limited and Another 2013 (7) TMI 718 - SUPREME COURT , wherein it has been categorically observed to the effect that under Section 138 of the Negotiable Instruments Act, 1881 (as amended) it is only the drawer of the Cheque that can be prosecuted and that the penal provisions have to be strictly construed and no one can be held criminally liable for an act of another. Thus, to attract a penal action under Section 138 of the Negotiable Instruments Act, 1881 (as amended) it is the drawer of the cheque which has been dishonoured who is to be made accountable under Section 142 of the Seciton138 Negotiable Instrument Act, 1881 (as amended) and not someone else - in present case, in view of the re-verification report of the Bank of Baroda verifying the signatures of the account holder thereof as visible on annexure P-6 as being of Ms. Taruna Kingrani and there being no signatures of the petitioner on the same it is apparent that the proceedings under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881 (as amended) in Complaint No. 04/4R/16 to that extent cannot be continued. The summoning order dated 29.5.2015 as had been issued by the then Metropolitan Magistrate Seciton 138 Negotiable Instruments Act, bearing No. 17733/15 and now bearing No.4/4R/2016 as pending in the Ld. Court of MM(NW) cannot continue and is thus set aside - petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
1. Quashing of Complaint Case Under Section 138/142 of the Negotiable Instruments Act, 1881
2. Allegation of Offence Under Section 420 of the Indian Penal Code, 1860
3. Validity of Summoning Order Dated 29.5.2015

Issue-wise Detailed Analysis:

1. Quashing of Complaint Case Under Section 138/142 of the Negotiable Instruments Act, 1881:
The petitioner sought the quashing of complaint case No. 04/4R/2016 under Section 138/142 of the Negotiable Instruments Act, 1881, arguing that only the signatory of the allegedly dishonoured cheque can be made liable. The complaint alleged that the petitioner and his wife entered into agreements to sell a plot and received payments from the complainant. However, the petitioner and his wife later showed their inability to sell the plot and executed a Cancellation Deed, returning part of the consideration amount but failing to return ?6,00,000. The petitioner issued a cheque for ?1,00,000, which was dishonoured. The petitioner contended that the cheque did not bear his signature but that of his wife, and the account belonged to her sole proprietorship concern, M/s Thought Work Events. The court relied on the Supreme Court verdict in Aparna A. Shah v. Sheth Developers Pvt. Ltd., which stated that under Section 138, only the drawer of the cheque can be prosecuted. The court found that the cheque was signed by the petitioner's wife, not the petitioner, and thus the proceedings under Section 138/142 could not continue against the petitioner.

2. Allegation of Offence Under Section 420 of the Indian Penal Code, 1860:
The complainant alleged that the petitioner committed an offence under Section 420 of the Indian Penal Code by causing wrongful gain to himself and wrongful loss to the complainant. The petitioner argued that the allegations were false and that the agreement between the parties had been mutually terminated. The complainant denied these claims and maintained that the cheque was issued in discharge of a legally recoverable debt. The court acknowledged that the complainant could seek redressal for the alleged offence under Section 420 IPC against the petitioner in accordance with the law.

3. Validity of Summoning Order Dated 29.5.2015:
The summoning order dated 29.5.2015 issued by the Metropolitan Magistrate was challenged by the petitioner. The court found that based on the re-verification report from the Bank of Baroda, the signatures on the cheque belonged to the petitioner's wife, not the petitioner. Consequently, the proceedings under Section 138/142 of the Negotiable Instruments Act could not be sustained against the petitioner. The court set aside the summoning order and disposed of the petition and accompanying application accordingly.

Conclusion:
The court quashed the proceedings under Section 138/142 of the Negotiable Instruments Act against the petitioner, as the cheque in question was signed by the petitioner's wife. However, the complainant was allowed to seek redressal for the alleged offence under Section 420 IPC against the petitioner. The summoning order dated 29.5.2015 was set aside, and the petition was disposed of accordingly.