IMPORTANT POINT
Dishonour of cheque – Complaint itself is required to be read as a whole and not in isolated fragments – There is no deemed liability merely by virtue of holding an office or position in company or society.

JUDGMENT :

PRASHANT KUMAR MISHRA, J.

1. Leave granted.

2. The present Appeal lays challenge to the impugned final order dated 28.06.2024 passed by the High Court of Judicature at Madras¹ [For short ‘High Court’] in Criminal Original Petition No. 10494 of 2024, whereby the High Court, in exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure, 1973² [For short ‘Cr.P.C.’] quashed the criminal proceedings against respondent Nos. 1 to 4 herein (arrayed as accused nos. 3, 6, 8 and 9) in S.T.C. No. 1980 of 2023, pending on the file of the Court of the learned IV FTC Metropolitan Magistrate, George Town, Chennai, arising out of a private complaint instituted by the appellant under Sections 138 and 141 of the Negotiable Instruments Act, 1881.³ [For short ‘NI Act’]

A. FACTUAL MATRIX

3. The appellant, M/s Mansi Finance (Chennai) Ltd., is a finance company carrying on business at Chennai and has instituted the said complaint through its Manager and Power of Attorney holder, A. Ramesh. On the other hand, the first accused in the complaint is M/s Ravindra Bharathi Educational Society, a society registered under the provisions of the Societies Registration Act, 1860. The second accused, namely M. Subramaniam, is the President of the said Society and the signatory to the cheque in question. The present respondent Nos. 1 to 4 were arrayed in the complaint as accused nos. 3, 6, 8 and 9 respectively, in their capacities as office bearers and functionaries of the Society, namely Vice-President, Treasurer, Executive Member and Manager. The case of the appellant is that all the accused persons were actively associated with the affairs of the Society and were responsible for its administration and business dealings.

4. The genesis of the dispute lies in a series of financial transactions entered into between the appellant and the accused-Society. It is the specific case of the appellant that during the period between 02.07.2018 and 27.07.2018, the accused persons, acting for and on behalf of the Society, approached the appellant and borrowed an aggregate sum of Rs. 4,50,00,000/- (Four Crores and Fifty Lakhs Rupees only) for the purpose of development of the educational institution and for its business requirements. The said amount is stated to have been advanced in different tranches by way of cheques.

5. In acknowledgment of the borrowings, promissory notes came to be executed on various dates between 02.07.2018 and 27.07.2018 in favour of the appellant. The record indicates that the said promissory notes were executed by the second accused-President of the Society and, in certain instances, by some of the office bearers including respondent Nos. 1 and 4 herein, thereby evidencing their participation in the financial arrangements underlying the transaction.

6. It is further borne out from the record that on 31.07.2018, a Memorandum of Understanding⁴ [For short ‘MoU’] came to be executed between the appellant and the accused-Society, represented by its President and Vice-President, formalizing the borrowing transaction and stipulating the terms of repayment. Under the said arrangement, the amount advanced carried interest at the rate of 30% per annum and remained repayable on demand.

7. According to the appellant, despite repeated demands for repayment, the outstanding liabili