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TMI Blog2013 (7) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... s of certain lands in and around Panvel. b) According to the appellant, in January 2008, since the Company was interested in developing a Township Project and a Special Economic Zone (SEZ) project in and around Panvel, Dist. Raigad, Maharashtra, one Virender Gala of Mahavir Estate Agency - the Broker, introduced them to the appellant herein and her husband as the land owners holding huge land in Panvel. The appellant represented to the Company that the said land was ideal for the development of a Township Project and a Special Economic Zone (SEZ) and also that they have no financial means and capacity to develop the same single handedly. It was further represented that they were also looking for a suitable person, interested in developing the said land jointly with them. (c) On believing the above said representations, the respondent-Company agreed for the development of the said land jointly with the appellant herein and her husband. When the respondent-Company requested for inspection of the title documents in respect of the said land, the appellant and her husband agreed for the same upon the entrustment of a token amount of Rs. 25 crores with an understanding between the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, by impugned order dated 24.09.2010, partly allowed the petition and quashed the order dated 11.05.2010 and directed the Magistrate to decide the objections raised by the counsel for the accused after hearing both the sides, but refused to quash the proceedings. i) Aggrieved by the said order, the appellant has filed the above appeal by way of special leave. 4) Heard Mr. K.V. Vishwanathan, learned senior counsel for the appellant and Mr. Mukul Rohtagi, learned senior counsel for respondent No.1. Contentions: 5) Mr. K.V. Vishwanathan, learned senior counsel for the appellant, by drawing our attention to Section 138 of the N.I. Act as well as various decisions of this Court relating to interpretation of the expression "drawer", submitted that the issuance of process by learned Magistrate cannot be sustained. On the other hand, Mr. Mukul Rohtagi, learned senior counsel for respondent No.1/the complainant submitted that inasmuch as the instant case is squarely covered by Section 141 of the N.I. Act and that the accused persons, namely, Ashish Shah and Aparna Shah (appellant No.1) are an association of individuals as envisaged under Section 141, learned Magistrate was fully ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. Explanation.-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability". 8) In order to constitute an offence under Section 138 of the N.I. Act, this Court, in Jugesh Sehgal vs. Shamsher Singh Gogi, (2009) 14 SCC 683, noted the following ingredients which are required to be fulfilled: "(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account; (ii) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability; (iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier; (iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be held to be vicariously liable for any offence committed by the Company itself. (See Sabitha Ramamurthy v. R.B.S. Channabasavaradhya, (2006) 10 SCC 581)" 11) In Sham Sunder and Others vs. State of Haryana, (1989) 4 SCC 630, this Court held as under: "9. The penal provision must be strictly construed in the first place. Secondly, there is no vicarious liability in criminal law unless the statute takes that also within its fold. Section 10 does not provide for such liability. It does not make all the partners liable for the offence whether they do business or not." 12) As rightly pointed out by learned senior counsel for the appellant, the interpretation sought to be advanced by the respondents would add words to Section 141 and extend the principle of vicarious liability to persons who are not named in it. 13) In the case on hand, we are concerned with criminal liability on account of dishonour of a cheque. It primarily falls on the drawer, if it is a Company, then Drawer Company and is extended to the officers of the company. The normal rule in the cases involving criminal liability is against vicarious liability. To put it clear, no one is to be held criminally liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said purpose, he relied on Oswal Fats and Oils Limited vs. Additional Commissioner (Administration), Bareilly Division, Bareilly and Others, (2010) 4 SCC 728, Balwantrai Chimanlal Trivedi vs. M.N. Nagrashna & Ors., AIR 1960 SC 1292, J.P. Builders & Anr. vs. A. Ramadas Rao & Anr., (2011) 1 SCC 429. Inasmuch as the appellant had annexed the relevant materials, namely, copy of notice, copy of reply, copy of the complaint and the order issuing process which alone is relevant for consideration in respect of complaint under Section 138 of the N.I. Act, the argument of learned senior counsel for Respondent No.1 that the stand of the appellant has to be rejected for suppressing of material facts or relevant facts, cannot stand. In such circumstances, we are of the view that the case law relied upon by the contesting respondent No.1 is inapplicable to the facts of the present case. 15) Mr. Mukul Rohtagi, learned senior counsel for respondent No.1, by drawing our attention to the definition of "person" in Section 3(42) of the General Clauses Act, 1897 submitted that in view of various circumstances mentioned, the appellant herein being wife, is liable for criminal prosecution. He also submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled under Section 138 of the N.I. Act. The case of the petitioner therein was that the offence under Section 138 of the Act cannot be said to have been made out against her only on the ground that she was a joint account holder along with her husband. It was pointed out that she has neither drawn nor issued the cheque in question and, therefore, according to her, the complaint against her was not maintainable. Learned Single Judge of the High Court of Delhi, after noting that the complaint was only under Section 138 of the Act and not under Section 420 IPC and pointing out that nothing was elicited from the complainant to the effect that the petitioner was responsible for the cheque in question, quashed the proceedings insofar as the petitioner therein. 20) In Smt. Bandeep Kaur vs. S. Avneet Singh, (2008) 2 PLR 796, in a similar situation, learned Single Judge of the Punjab and Haryana High Court held that in case the drawer of a cheque fails to make the payment on receipt of a notice, then the provisions of Section 138 of the Act could be attracted against him only. Learned Single Judge further held that though the cheque was drawn to a joint bank account which is to be operated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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