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2024 (11) TMI 195 - HC - Indian LawsDishonour of Cheque - Challenge to Cognizance and Summoning Orders - vicarious liability - Cheques have been signed and issued by the respondent No. 3-Bhagawat Daulat Gawali in his individual capacity which had no connection with the petitioners herein or the alleged business transaction between the petitioner No. 1-Bipin Lal Singh Pagar through its Proprietorship Firm M/s Amax Agro Exports (the petitioner No. 2) and the respondent No. 2-Tiger Logistics (India) Limited. Whether the Petitioner can be summoned under S.148 NI Act for a dishonoured Cheque that has not been signed by him but by one Bhagawat Daulat Gawali, who is neither an employee nor a Legal Representative of the petitioner or his Proprietorship Firm? - HELD THAT - Pertinently, the Cheques in question have been dishonoured on the ground of Account Closed vide Cheque Return Memo dated 03.09.2020. Since, the petitioner No. 1-Bipin Lal Singh Pagar is not a signatory to the said two Cheques, he canot not be held liable under Section 138 of NI Act, 1881. The claim of the respondent No. 2-Tiger Logistics (India) Limited that the Cheques had been issued by the respondent No. 3/Bhagawat Daulat Gawali for and on behalf of the petitioners in discharge of their liabilities towards the respondent No. 2-Tiger Logistics (India) Limited, may be a basis for filing the Civil Suit, but these averments for Complaint under Section 138 of NI Act, 1881 are not maintainable against the petitioners. Therefore, the petitioners not being a signatory to the two Cheques cannot be summoned in the Complaint Case under Section 138 of the NI Act, 1881. The Summoning Orders both dated 11.01.2021 in the two Complaints, against the petitioners are patently illegal and are hereby set aside, though they may be continued against Bhagawat Daulat Gawali, in accordance with law - Petition allowed.
Issues:
Challenge to Summoning Orders under Section 138 of the Negotiable Instruments Act. Analysis: The petitioners filed petitions under Section 482 of the Code of Criminal Procedure to quash the Complaint Case and Summoning Orders related to Cheques issued by a third party. The petitioners argued that they were not connected to the Cheques and should not be held liable under Section 138 of the NI Act. They contended that the Cheques were signed by a third party, not them, and that continuing the proceedings would result in a miscarriage of justice. The respondent, a logistics company, claimed that the Cheques were signed on behalf of the petitioner's firm by the third party who was a guarantor. The respondent argued that the petitioners should be held accountable for the dishonored Cheques. The petitioners challenged the Summoning Orders, stating that they were not signatories to the Cheques and should not be prosecuted under Section 138 of the NI Act. The court analyzed Section 138 of the NI Act, emphasizing that the drawer of a dishonored cheque is the only one liable for prosecution under this section. The court referred to precedents to highlight that the intent of the legislature is clear regarding liability for dishonored cheques. In this case, the Cheques were dishonored due to "Account Closed," and since the petitioners were not signatories, they could not be summoned under Section 138. The court concluded that the Summoning Orders against the petitioners were illegal and set them aside. The court clarified that the proceedings could continue against the third party who signed the Cheques. The petitions were disposed of accordingly, with the Summoning Orders against the petitioners being deemed unlawful. This detailed analysis of the judgment showcases the court's interpretation of the legal provisions and precedents regarding liability for dishonored cheques under the NI Act. The court's decision to set aside the Summoning Orders against the petitioners provides clarity on the issue of liability in such cases.
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