IMPORTANT POINT
Dishonour of cheque – When cause of action arises due to alleged dishonour of cheque and complaint is initiated under NI Act, same is maintainable against Trustee who has signed cheque, without requirement to array Trust also as an accused.

JUDGMENT :

AHSANUDDIN AMANULLAH, J.

Leave granted.

2. The question for consideration in the instant appeal is as to whether in the absence of a Trust being made an accused in a complaint under the Negotiable Instruments Act, 1881 (hereinafter referred to as the ‘NI Act’), when a Cheque has been issued on behalf of a Trust, the said complaint would be maintainable against the Chairman/a Trustee of the said Trust?

THE IMPUGNED JUDGMENT:

3. The instant appeal arises from the Final Judgment and Order dated 21.11.2022 (hereinafter referred to as the ‘Impugned Judgment’) [2022 SCC OnLine Megh 624| (2023) 1 GauLT 344], passed by a learned Single Judge of the High Court of Meghalaya, Shillong (hereinafter referred to as the ‘High Court’) in Criminal Petition No.31/2019, wherein the High Court quashed and set aside the proceedings in Criminal Case No.44(S)/2019 pending before the Court of the learned Judicial Magistrate, Shillong (hereinafter referred to as the ‘Trial Court’) and the Summoning Order dated 11.02.2019 passed against the Respondent.

4. The William Carey University (hereinafter referred to as the ‘University’), a recognized Private University, owned and sponsored by the Agriculture Crafts Trades and Studies Group of Institutions (hereinafter referred to as the ‘ACTS Group’), was facing a severe financial crisis. The ACTS Group entered into a Memorandum of Understanding with Orion Education Trust (hereinafter referred to as ‘Orion’) on 12.10.2017 to hand over the management and administration of the University to Orion. The Respondent is the Chairman of Orion. As Chairman of Orion, the Respondent issued authorization letters to all concerned, duly entrusting the Appellant with the task of liaisoning with governmental authorities and to undertake such activities to facilitate the effective transition of all administrative control of the University from the hands of the ACTS Group to Orion.

5. The Appellant alleged that pursuant to the above, upon such transition being effected, the Respondent issued a Cheque dated 13.10.2018, bearing number 000013 for Rs.5,00,00,000/- (Rupees Five Crores Only), drawn on Kotak Mahindra Bank, Vadodara Branch in his favour for the services rendered by him under the signature of the Respondent as authorized signatory of Orion. When presented by the Appellant at his ICICI Bank Branch at Laitumkhrah, Shillong, East Khasi Hills on 07.12.2018, the Cheque was dishonoured with the endorsement ‘insufficient funds’.

6. Notice under Section 138 of the NI Act was addressed by the Appellant to the Respondent on 19.12.2018, which was received by the Respondent on 27.12.2018. Response thereto was sent by the Respondent vide Letter dated 28.12.2018. Subsequently, the Appellant filed a complaint case No.44(S)/2019 before the Trial Court against the Respondent for offences under Sections 138 and 142 of the NI Act as well as under Section 420 of the Indian Penal Code, 1860. On receipt of summons, as per the Trial Court’s Order dated 11.02.2019, the Respondent entered appearance and challenged the complaint case on the issue of maintainability for non-joinder of necessary parties.

7. The Respondent, thereafter, preferred Criminal Petition No.31/2019 under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as the ‘Code’) before the High Court seeking to quash the complaint case and the proceedings before the Trial Court, on the ground, inter alia, that Orion - a juristic entity and a necessary party being a Trust - not having been added as a party, the complaint case was non-maintainable, and consequently, no vicarious liability could be placed on the Respondent.

8. Allowing the Criminal Petition in the Respondent’s favour, the High Court has, by way of the Impugned Judgment, quashed the complaint case and the Summoning Order dated 11.02.2019 passed by the Trial Court. Assailing the same, the present appeal has been preferred by the Appellant.

APPELLANT’S SUBMISSIONS:

9. The arguments put forth by t