Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(SC) 305

Alka Khandu Avhad – Appellant
Versus
Amar Syamprasad Mishra – Respondent

Advocates appeared:
For the Appellant(s) : Mr. Himanshu Shekhar, AOR
For the Respondent(s): Mr. Zulfiker Ali P.S., AOR Mr. Augustine Peter, Adv. Ms. Lakshmi Sree P., Adv.

Judgement Key Points

Key Points: - A person can be liable under Section 138 NI Act if they are the signatory to the cheque drawn on an account maintained by them and the cheque is issued to discharge debt; joint liability does not by itself create liability unless the account is jointly maintained and the signatory relation is established (!) (!) (!) . - Section 141 NI Act relates to offences by companies; it cannot be applied to individuals, and two private individuals cannot be said to be "other association of individuals" for invoking Section 141; liability against a non-signatory individual cannot be framed under Section 141 unless the person is a director or partner with signatory responsibility (!) . - The High Court’s refusal to quash a complaint under Section 138 r/w Section 141 is overturned; the complaint against a non-signatory individual where the cheque was not drawn from that account and the account was not joint is quashed, as the liability cannot be imputed under Section 141 to an individual not meeting the criteria (!) (!) (!) .

What is the scope of liability under Section 138 read with Section 141 NI Act for an individual who is not a signatory to the dishonoured cheque or to the account?

What is the interpretation of "other association of individuals" under Section 141 NI Act in relation to private individuals?

What are the grounds for quashing a criminal complaint under Section 138 read with Section 141 NI Act where the cheque is issued by one party and the respondent is not a signatory or joint account holder?

JUDGMENT

M. R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 21.08.2019 passed by the High Court of Judicature at Bombay in Criminal Writ Petition No. 2595 of 2019, by which the High Court has dismissed the said application preferred by the appellant herein under Article 226 of the Constitution of India and has refused to quash the complaint filed against the appellant for the offences punishable under Section 138 r/w Section 141 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the ‘NI Act’), the original accused No. 2 has preferred the present appeal.

2. That respondent No. 1 herein has filed a criminal complaint against the appellant and her husband for the offences punishable under Section 138 r/w Section 141 of the NI Act in the Court of the learned Metropolitan Magistrate, 43rd Court at Borivali, Mumbai, which has been numbered as C.C. No. 2802/SS/2016. That respondent No. 1 – original complaint (hereinafter referred to as ‘the original complainant’) is a practicing advocate and partner in a solicitor firm in Mumbai. As per the case of the complainant, both the accused who are husband and wife, approached the original

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2021 Supreme(SC) 305

Alka Khandu Avhad – AppellantVersusAmar Syamprasad Mishra – Respondent

What is the scope of liability under Section 138 read with Section 141 NI Act for an individual who is not a signatory to the dishonoured cheque or to the account?

What is the interpretation of "other association of individuals" under Section 141 NI Act in relation to private individuals?

What are the grounds for quashing a criminal complaint under Section 138 read with Section 141 NI Act where the cheque is issued by one party and the respondent is not a signatory or joint account holder?

Alka Khandu Avhad – Appellant
Versus
Amar Syamprasad Mishra – Respondent