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2023 (10) TMI 717 - HC - Indian LawsDishonour of Cheque - vicarious liability - applicability of Section 141 of NI Act to a sole proprietorship firm - whether the application filed under Section 243 read with Section 293 of Cr.P.C. read with Section 45/73 of Indian Evidence Act, 1872 for sending the cheque in question to FSL for ink dating needs to be allowed? - HELD THAT - This Court notes that the petitioner herein had admitted before the learned Magistrate, at the stage of framing of notice under Section 251 of Cr.P.C. as well as the time of recording of his statement under Section 313 of Cr.P.C., that he had signed the cheque in question. In the present case, the revisionist had admitted his signatures on the cheque in question and that the particulars have also been filled by him in his own handwriting except the date. Even if, the contention of the revisionist that the date was not filled by him is considered as correct, for the sake of arguments, the same cannot be considered as 'material alteration'. Section 138 NI Act does not contemplate that whenever any cheque is issued then the drawee must fill all the details in the cheque in his own handwriting for its validity u/s 138 NI Act. Even if, the contention of the revisionist is accepted as regard undated cheque, the same would be covered within the provision of Section 138 NI Act, so long as, the revisionist has admitted his signatures on the cheque. The Hon ble Apex Court in case of T. NAGAPPA VERSUS Y.R. MURALIDHAR 2008 (4) TMI 789 - SUPREME COURT had observed that the accused should be given fair trial to lead evidence in his defence, however, it was also categorically held that the Court being the master of the proceedings has to determine as to whether the application of the accused in terms of Section 243 Cr.P.C. is bona fide or not or whether the accused intends to bring on record a relevant material. The facts of the present case are, undoubtedly, differentiable from the facts of the said case. This Court does not find any infirmity with the orders passed by both the Courts below by way of which the application filed by the petitioner under Section 243 read with Section 293 of Cr.P.C. read with Section 45/73 of Indian Evidence Act, 1872 was dismissed. Accordingly, the orders of dismissal of application seeking summoning of Director, FSL also warrants no interference. Whether the petitioner can be held liable, by virtue of Section 141 of NI Act, even if it is proved that he is not the sole proprietor of the accused firm? - HELD THAT - This Court finds merit in the argument of learned counsel for petitioner that Section 141 of NI Act has no application to a sole proprietorship firm, and under Section 138 of the Act, no other person except the sole proprietor can be held liable. In this Court s opinion, the petitioner should not be denied an opportunity during the course of trial to examine witnesses in defence to prove the status of proprietorship firm and as to who was the sole proprietor of the firm and in whose name was the bank account maintained. In view of the same, this Court is of the opinion that the application seeking summoning of defence witnesses, i.e. concerned bank official and the official from VAT department, filed by the petitioner ought to be allowed. Petition allowed.
Issues Involved:
1. Validity of the application for scientific examination of the cheque. 2. Liability of the petitioner under Section 141 of the NI Act. Summary: Issue 1: Validity of the application for scientific examination of the cheque The petitioner sought to set aside orders from the Metropolitan Magistrate and the Additional Sessions Judge that dismissed his application for scientific examination of the cheque. The petitioner argued that the cheque, issued as a security cheque in July 2014, was undated and filled in later by the complainant. The learned Magistrate dismissed the application, noting that the petitioner admitted his signature on the cheque, and under Section 138 of the NI Act, the cheque remains valid even if other details were filled later. The Additional Sessions Judge upheld this decision, referencing *Ravi Chopra v. State & Anr.* and *Bir Singh v. Mukesh Kumar*, which state that as long as the cheque is signed by the drawer, different handwriting or ink does not constitute a 'material alteration'. The court found no infirmity in the dismissal of the application for scientific examination and upheld the decision. Issue 2: Liability of the petitioner under Section 141 of the NI Act The petitioner contended that he was not liable under Section 141 of the NI Act as he was merely an authorized signatory and not the sole proprietor of the accused firm. The court agreed, referencing *Raghu Lakshminarayanan v. Fine Tubes* and *M.M. Lal v. State NCT of Delhi*, which clarify that Section 141 does not apply to sole proprietorships, and only the sole proprietor can be held liable under Section 138. Consequently, the court found merit in the petitioner's argument and set aside the observations of the learned ASJ that held the petitioner liable under Section 141. The court ordered the summoning of witnesses to determine the status of the proprietorship firm and the sole proprietor. Conclusion: The court upheld the dismissal of the application for scientific examination of the cheque but allowed the application for summoning witnesses to determine the status of the proprietorship firm. The learned Magistrate was directed to summon the concerned bank official and VAT department official. The observations made were clarified to have no bearing on the merits of the case during the trial. The petition was disposed of accordingly.
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