The accused in C.C.No.6096/2004, which is pending on the file of the VIII Metropolitan Magistrate, Saidapet, Chennai is the petitioner herein. The above said calendar case was instituted by the respondent herein on a private complaint for an alleged offence punishable under Section 138 of the Negotiable Instruments Act, 1881 against one Rajamani, the father of the petitioner herein and the petitioner herein. The father of the petitioner herein and the petitioner herein have been arraigned as accused Nos.1 and 2 respectively. Contending that the complaint as against the petitioner herein is not maintainable in law, the petitioner herein (A2), has come forward with the present petition under Section 482 Cr.P.C to quash the above said criminal proceedings so far as the petitioner herein (A2) is concerned.
2. The arguments advanced by Mr.R.Shivakumar representing M/s.La Law, learned counsel for the petitioner/accused and by Mr.D.S.Ramesh, learned counsel for the respondent/complainant were heard. The materials produced in the form of typed set of papers were also perused.
3. It is the contention of the learned counsel for the petitioner that the complaint against the petitioner herein is not maintainable and hence liable to be quashed since the petitioner was not the drawer of the cheque for the dishonour of which the complaint has been preferred. On the other hand, it is contended on behalf of the respondent/complainant that though the cheque was issued by Rajamani, the father of the petitioner herein, he issued the said cheque as the kartha of the Hindu Undivided Family of which the petitioner was also a member and that hence the petitioner should be construed to be a drawer of the cheque.
4. As per the contents of the complaint, it is the contention of the complainant that the petitioner and her father made the respondent/complainant believe that they were capable of getting an admission in a medical college at Bangalore for the son of the respondent/complainant; that coming to know that the respondent/complainant had money to pay for medical admission under payment quota, the petitioner and her father (A2 and A1) approached the respondent/complainant and requested for providing a loan of Rs.6,00,000/- to settle a family dispute in the petitioner's family; that both the petitioner and her father promised to settle the amount within a month; that believing such promise, the respondent/complainant lent them a sum of Rs.6,00,000/-; that the petitioner and her father (A2 and A1) later on failed to repay the said amount; that after the respondent/complainant persuaded them to repay the amount, the father of the petitioner (A1) issued two cheques bearing cheque Nos.204803 and 204804 for the sums of Rs.2,50,000/- and Rs.3,50,000/- respectively dated 09.02.2004 and 24.02.2004 respectively; that when the cheques were presented for encashment, they were returned unpaid for insufficiency of funds and the banker's intimation ws received on 30.06.2004; that there after a statutory notice was issued on 10.07.2004 demanding payment of the cheque amount, namely Rs.6,00,000/-; that though the notice was received by the first accused, he did not comply with the demand made in the notice and that hence the respondent/complainant was constrained to prefer the complaint before the learned XVIII Metropolitan Magistrate, Saidapet, Chennai for an alleged offence punishable under Section 138 of the Negotiable Instruments Act, 1881 against the father of the petitioner and the petitioner showing them as accused No.1 and 2 respectively.
5. The averments made in the complaint are to the effect that though the father of the petitioner and the petitioner herein jointly borrowed a sum of Rs.6,00,000/- from the respondent/complainant, the chques in question were issued by A1, the father of the petitioner herein alone. It is not the case of the respondent/complainant that the cheque was issued in respect of an account jointly maintained by the petitioner herein and her father. On the other hand, there is nothing in the complaint to show how the petitioner herein was sought to be made responsible for the dishonour of the cheque. The complaint has been drafted in such a way to see that there is no clear-cut allegation as to how the petitioner herein/A2 is liable to be prosecuted for the offence under Section 138 of the Negotiable Instruments Act, 1881.
6. As pointed out supra, admittedly, the cheques were issued by the first accused, namely the father of the petitioner herein. The petitioner is not shown to be a joint account holder along with her father to show that the cheque was issued in respect of an account maintained by her also. In paragraph 5 of the counter filed in this petition, the respondent herein has candidly admitted that though the respondent insisted upon issuing a cheque by the petitioner also, the cheques covering the entire loan amount were issued by the father of the petitioner stating that the petitioner herein did not have any bank account in her name; that on the other hand, the petitioner herein assured the respondent herein that the amount will be repaid by herself and her father within a few months and that believing such words of the petitioner herein, the respondent herein accepted the cheques from the first accused alone (father of the petitioner herein).
7. In paragraph 8 of the counter affidavit filed in this petition, the respondent has stated that though the cheques were issued by the first accused (father of the petitioner herein), since both of them jointly borrowed the amount, the petitioner was also added as one of the accused in the complaint and that both of them were liable to be prosecuted as per the provisions of the Negotiable Instruments Act, 1881. A conjoint reading of the complaint and the counter affidavit filed in this petition will make it clear that as per the complaint, the cheques in question were not issued by the petitioner herein, but were issued by her father, who has been arrayed as accused No.1. The entire complaint and the counter affidavit proceeded on the assumption that the cheques were issued by A1, the father of the petitioner herein alone in respect of an account maintained by him with his bank and that though the cheques were issued by A1 alone, since the amount was borrowed jointly by A1 and his daughter, namely petitioner herein, the petitioner herein (A2) was also responsible for the consequences of the dishonour of the cheques issued by A1.
8. Section 138 of the Negotiable Instruments Act reads as follows:-
" 138. Dishonour of cheque for insufficiency, etc., of funds in the account Where any cheque drawn by a person 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 the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such persons shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
(a) the 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;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque 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."
9. A reading of the same will show that only the person who issues a cheque on an account maintained in his name with a bank shall be held responsible for the penal consequences of the dishonour of the cheque, provided the other conditions are proved. It does not make any other person, in discharge of whose debt or liability the account holder issued the cheque, liable for being prosecuted for the disohnour of the cheque. The drawer alone is made liable for the penal consequences and the person in discharge of whose debt or liability such cheques are issued, cannot be prosecuted for such an offence unless he/she also happens to be the drawer of the cheque. The exceptions to the same are provided in Section 141 of the Negotiable Instruments Act, 1881, which reads as follows:-
141. Offences by companies (1) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:
Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this chapter.
(2) Not withstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation. For the purposes of this section,
(a) "company" means any body corporate and includes a firm or other association of individuals; and
(b) "director", in relation to a firm, means a partner in the firm.
10. As per Section 141, if the person committing an offence punishable under Section 138 happens to be a company then, every person, who at the time of commission of offence was in charge of and responsible to the company for the conduct of its business, as well as the company shall be deemed to have committed the offence. Sub clause (2) of the section provides that a director of the company, even if he does not come under the category of persons liable under sub-clause(1) shall be deemed to have committed the offence, if it is proved that the offence has been committed with his consent or connivance or is attributable to neglect on his part. As per the explanation appended to Section 141, partners are equated to a company and its directors. The definition of company includes the companies incorporated, partnership firms and other association of individuals. The pertinent question that arises here is whether an Hindu Undivided Family comes under the definition of company found in Section 141 of the Negotiable Instruments Act, 1881.
11. The learned counsel for the respondent contending that the members of Hindu undivided family can be held liable as directors of the company, in respect of a cheque issued by the kartha. The learned counsel for the respondent citing a judgment of a learned single judge of Andhra Pradesh High Court in Jagadish Rai Agarwal and others v. The State of A.P. And others reported in 2005 CRI.L.J.314, contended that if a cheque issued by a kartha of the family was dishonoured, the sons of the kartha of the family would be held liable for prosecution for an offence punishable under Sections 138 r/w 141 as they should be equated to the directors of a company by virtue of the explanation found in Section 141 of the Negotiable Instruments Act. With due respect to the Hon'ble single judge of the Andhra Pradesh High Court, this court is not able to accept such a blanket proposition without a qualification that such cheque should have been issued in respect of an account maintained in the name of the HUF in order to hold the members of the HUF responsible for the dishonour of such cehque equating them with a director of a company
12. To say that a cheque was issued by a person as kartha of the Hindu Undivided Family and hence the members of such family are liable for the dishonour of the cheque, the account should have been maintained in the name of the Hindu Undivided Family. If a cheque is issued in respect of an account maintained in the name of a partnership firm, then the partners of the firm can be made liable as directors of the company, provided the other conditions are proved. On the other hand, if a cheque is issued by a person who is a partner in a partnership firm in respect of his personal account maintained with the bank, then neither the firm nor the other partners shall be responsible for the dishonour of such cheque. Even in case of companies only, when the cheque is issued in respect of an account maintained in the name of the bank, the company will be made liable for the dishonour of the cheque. On the other hand, if a cheque is issued by a director in respect of his personal account maintained in his name then the company or the other directors cannot be made liable. Similarly, even assuming that an Hindu Undivided Family can be brought under the definition of company as per the exception found in Section 141 of the Negotiable Instruments Act, if the cheque in question is not issued in respect of an account maintained in the name of the Hindu Undivided Family, such HUF or the other members of HUF cannot be held liable for the dishonour of such cheque.
13. In this case, it is not the case of the respondent/complainant that the cheque was issued in respect of an account maintained in the name of HUF. On the other hand, the cheque was issued by the first accused in respect of a bank account maintained by him in his own name. Furthermore, the respondent has not made it clear as to how the petitioner herein (A2) is sought to be projected as a member of an Hindu Undivided Family headed by her father, even though she is shown to be a married woman. She is described in the complaint as Mrs.Gayathri. However, while describing her address, instead of showing her husband's name, the respondent has chosen to describe her as daughter of the first accused. Apart from that there is not even a whisper either in the statutory notice or in the complaint that the cheques in question were issued by the first accused in his capacity as the kartha of an Hindu Undivided Family.
14. The complaint contains an averment in paragraph 6 that the amount was borrowed to settle the family dispute in the family of the daughter, namely the petitioner herein. The said averment itself implies that the family of A1 is different from the family of the petitioner (A2) after her marriage. Even in the counter affidavit filed in this petition, the respondent has not incorporated any averment to the effect that the cheques in question were issued by the first accused as kartha of the Hindu Undivided Family. On the other hand, only as an after thought, the respondent has chosen to file an additional counter affidavit on 24.07.2009, in which alone it has been stated that the cheques were issued by the first accused as kartha of family and the second accused, namely the petitioner herein as a member of the Hindu Undivided Family is also liable as per Section 141 of the Negotiable Instruments Act, 1881. Such an averment at the belated stage, that too in the additional counter affidavit by way of an improvement made in the case of the respondent cannot be entertained. Furthermore, even assuming without admitting that for the dishonour of a cheque issued by the kartha of the family in respect of an account maintained in his name, the members of such Hindu Undivided Family can also be held liable under Section 138 r/w 141 of the Negotiable Instruments Act holding them on par with directors of a company, necessary averments should have been made in the complaint to the effect that such person was in charge of and responsible to the company (Huf) for its business. In the absence of such necessary averments, the prosecution launched against them can be quashed.
15. In this case, there is no averment in the complaint to show how the petitioner is held responsible for the conduct of the business of the Hindu Undivided Family. There is not even an averment that the petitioner/A2 is looking after the affairs/business of H.U.F. As pointed out supra, the petitioner having been given in marriage and having gone out of the family of her father, can no longer be construed to be a member of the Hindu Undivided Family responsible for its business. For that reason also, this court, without any hesitation, comes to the conclusion that the prosecution launched against the petitioner herein for the dishonour of the cheques issued by her father in respect of an account maintained by him in his name, cannot be maintained and that the petitioner has made out a clear case for the quashing of the complaint against her.
16. For all the reasons stated above, this court comes to the conclusion that the prosecution launched against the petitioner herein/A2 in C.C.No.6096/2004 based on the private complaint of the respondent herein for an alleged offence punishable under Section 138 of the Negotiable Instruments Act is not maintainable; that the same is a glaring example of misuse of process of court and that the same deserves to be quashed using the inherent powers of this court under
Section 482 Cr.P.C. By way of clarification, it is made clear that the above said observations shall apply to the criminal prosecution launched against the petitioner/A2 alone and this court does not express any opinion regarding the maintainability of the prosecution launched against the father of the petitioner herein, namely A1.
17. In the result, this petition is allowed and C.C.No.6096/2004 is quashed so far as the petitioner (A2) is concerned.
05.08.2009 asr/ Index : Yes/No Internet : Yes/No To XVIII Metropolitan Magistrate, Saidapet, Chennai P.R.SHIVAKUMAR, J.
asr/ PRE-DELIVERY ORDER in Crl.O.P.No.30012/2008 05.08.2009