IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 08TH DAY OF FEBRUARY 2019 BEFORE THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION NO.6545/2016 BETWEEN SRI NEIL DESHPANDE, S/O. VINAY L. DESHPANDE, AGED ABOUT 36 YEARS, M/S. ENCORE SOFTWARE, NO.44 & 45, LEO COMPLEX, RESIDENCY ROAD CROSS, BENGALURU – 560001 ALSO AT:
M/S. CONCRETE LABS, NO. 536, 3RD FLOOR, INNER RING ROAD, DOMALUR, BENGALURU – 560071. ... PETITIONER (BY SRI PRASHANTH U.T., ADV. FOR SRI M S BHAGWAT, ADV.) AND SMT. FARIDA BANU, W/O SRI AJAZ AHAMED, AGED ABOUT 51 YEARS, RESIDING AT NO.18, AASRA MANOR, CHICK BAZAR ROAD CROSS, TASKER TOWN, SHIVAJINAGAR, BANGALORE – 560051. ... RESPONDENT (BY SRI S.NAGENDRA DIKSHIT, ADV. FOR SRI K.DIWAKARA, ADV.) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 CR.P.C PRAYING TO QUASH THE COMPLAINT AND PROCEEDINGS IN C.C.NO.13100/2016 (ANNEXURE-A AND B) ON THE FILE OF 12TH ACMM, BANGALORE.
THIS CRIMINAL PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER Petitioner has sought to quash the proceedings initiated against him in CC NO.13100/16 for the alleged offences punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short `the Act’).
2. Heard the learned counsel for the petitioner and the learned counsel for respondent and perused the records.
3. Respondent herein filed a complaint under Section 200 read with Section 138 and 141 of the Act seeking action against accused nos. 1 to 4 for the dis-honour of the cheque for Rs.62,37,000/-. The learned Magistrate (presently case is transferred to 26th ACMM, Bangalore) took cognizance of the offence and issued summons to the petitioner. At that stage, the petitioner has invoked the jurisdiction of this Court under Section 482 of Cr.PC.
4. The learned counsel for the petitioner submits that, the petitioner is neither the signatory to the cheque nor the cheque is drawn from the account maintained by the petitioner herein so as to fasten liability under Section 138 of the Act. It is contended that he is neither a Director of respondent-4 Company nor an employee of the said Company and therefore the prosecution of the petitioner on the basis of allegations that he approached the respondents for financial assistance does not furnish a cause of action to file complaint against the petitioner. In support of his contentions, the learned counsel for the petitioner has placed reliance on the following decisions:
i) Harshendra Kumar D vs. Rebatilata Koley and Others reported in 2011 (3) SCC 351 (para.26 and 27) ii) Aparna A.Shah vs. Sheth Developers Pvt.Ltd., and another reported in 2013(8) SCC 71 (para.27).
iii) Arundati Sharma vs. Housing and Urban Development Corporation Ltd. reported in 2016(2)KantLJ 80 (para 9) iv) Mr.Thiagarajan Murgugesan & Another vs. M/s.Decor Aviation Private Limited – Judgment dated 06.08.2018 passed in Criminal Petition No.3648/2011 (para.5).
5. The learned counsel for the petitioner has made a particular reference to para.27 of the Judgment rendered in Aparna case, wherein it is held as under:
“27. In the light of the above discussion, we hold that under Section 138 of the Act, it is only the drawer of the cheque who can be prosecuted. In the case on hand, admittedly, the appellant is not a drawer of the cheque and she has not signed the same. A copy of the cheque was brought to our notice, though it contains the name of the appellant and her husband, the fact remains that her husband alone had put his signature. In addition to the same, a bare reading of the complaint as also the affidavit of examination-in-chief of the complainant and a bare look at the cheque would show that the appellant has not signed the cheque.”
6. Refuting the contentions, the learned counsel appearing for contesting respondent submits that the petitioner is none other than the son of accused no.2. Accused nos.1,2 and 3 together sought for financial assistance for Rs.1,64,00,000/- from the complainant for the purpose of keeping afloat of 4th accused company namely Processors Systems (India) Pvt. Ltd., The cheque in question was issued by accused no.1 towards the repayment of debt and liability due by the said company. Therefore, the petitioner is also liable for prosecution under Section 141 of the Act.
7. On considering the rival submissions and on perusal of the averments made in the charge sheet, it is seen that the respondent has sought to prosecute accused nos. 1 to 4 on the ground that the cheque in question was issued by the petitioner towards repayment of loan due by accused no.4-Company. Going by the averments made in the complaint, accused no.1 was the Chairman and CEO of the said Company. Accused no.2 was its Director. There is no averment whatsoever as to whether the petitioner herein was holding any position in the said Company. The only averment made against the petitioner is that, petitioners nos. 1 and 2 sought for financial assistance and accused nos. 1 to 3 have agreed to deposit original title deeds of the property to secure the said loan. These averments in my view do not entitle the complainant to prosecute the petitioner for the offences under Section 138 or 141 of the Act. Undisputedly, the petitioner is not the drawer of the dishonored cheque. He is not the person in charge of the affairs of Company/4th respondent. In the complaint, specific averments are made to the effect that the liability is acknowledged only by the first and second accused and not by the present petitioner.
8. Under Section 138, prosecution can be launched only against the drawer of cheque. It is not the case of the complainant that cheque in question was drawn by the petitioner herein or that the said cheque is issued on the accounts maintained by him. As such, Section 138 of the Act does not apply to the petitioner.
9. Section 141 of the Act specifically provides for and makes the persons in-charge and responsible to the Company as vicariously liable to the act of the company. Undisputedly, the petitioner herein was neither in-charge of the respondent-4-Company nor was he responsible to the day-to-day affairs of the business of the said Company. Therefore, prosecution of petitioner for the alleged offence being contrary to the provisions of N.I. Act, the impugned proceedings in so far as the petitioner is concerned, are liable to be quashed.
Accordingly, the petition is allowed. Proceedings in CC No.13100/16 pending on the file of 12th Additional Chief Metropolitan Magistrate, Bangalore (presently 26th Additional Chief Metropolitan Magistrate, Bangalore (SCCH-9), are hereby quashed only in so far as petitioner accused no.3 is concerned. Proceedings shall continue against accused Nos.1, 2 and 4 in accordance with law.
Sd/- JUDGE Sk/- CT-HR