A person who is not a signatory to the cheque cannot be prosecuted under Section 138 of the Negotiable Instruments Act, 1881, for the offence of dishonour of cheque for insufficiency of funds.

JUDGMENT

1. This Criminal Petition, under Sec. 482 of the Code of Criminal Procedure 1973, is filed by A1/the petitioner herein to quash the proceedings in C.C.No.5836 of 2021 on the file of the Court of the V Additional Junior Civil Judge, Guntur.

2. Brief facts of the case are as follows; The respondent No.2 herein filed a complaint against the petitioner and another for the offence punishable under Sec. 138 of the Negotiable Instruments Act, 1881 (for short "the N.I. Act") in the Court below. It is stated in the said complaint that complainant is a Trust, registered under the Indian Trust Act, 1882, bearing No.276/1991-92, dtd. 4/7/1991 and is running Medical Education Institutions. The complainant is represented by its Director, who is authorized to prosecute the complaint against the accused on behalf of the complainant-Trust. The Accused No.2 representing himself as General Power of Attorney (G.P.A.) holder of Accused No.1 approached Sri Katuri Subba Rao, Managing Trustee of the Complainant-Trust and offered to sell the land belonging to the Accused No.1 admeasuring Ac.3.23 guntas situated at Survey No.145/2 of Pattandur Agrahara Village, K.R.Puram Hubli, Bangalore East Taluk. A Resolution passed by the Board of Trustees gave approval for purchase of the said property by the complainant. In pursuance of the said offer made by the Accused No.2 on behalf of the Accused No.1, the complainant-Trust communicated its acceptance for purchasing the said property. The Accused No.2 in the capacity of GPA holder of Accused No.1 executed an Agreement of Sale, dtd. 5/11/2019 in favour of the Complainant-Trust for a consideration of Rs.75, 00, 00, 000.00 (Rupees Seventy Five Crores Only). The Complainant-Trust paid an amount of Rs.10, 00, 00, 000.00 (Rupees Ten Crores only) on 25/10/2019 and another sum of Rs.10, 00, 00, 000.00 (Rupees Ten Crores only) on 13/11/2019 through RTGS Funds Transfer system to the account of the Accused No.2 against receipt issued by the Accused No.2. The Accused No.1 being owner of the said property assured the complainant-Trust through her father who is her General Power of Attorney holder and who is the Accused No.2, that she would procure the adjacent land of Ac.2.00 also, so that her land of Ac.3.00 agreed to be sold under the Agreement of Sale and adjacent land of Ac.2.00 would be put together Ac.5.00 and as such the complainant-Trust would be eligible for obtaining sanction/permission from authorities to start Dental college. The complainant agreed to enter into the Agreement of Sale with the above condition to be fulfilled by the Accused and in case the accused could not procure the additional land, the Agreement of Sale" shall stand cancelled and the Accused shall return the advances paid with interest at the rate of 14% per annum from the date of receipt of advance amount till the date of payment. The Accused No.1 directly or through the Accused No.2 failed to convince the neighbouring land owners of the property agreed to be sold under the above referred Agreement of Sale, to sell their land within 120 days from the date of agreement as per Clause No.9 of the Agreement of Sale. Therefore they committed breach of the primary condition stipulated in the Agreement of Sale. Thereby both the accused became liable to refund the advance sale consideration received by them with interest. On repeated follow-ups and demands by the officials of the complainant, the Accused No.2 issued five (5) cheques of his personal account on five different dates between 18/3/2021 to 28/3/2021 for a total sum of Rs.20, 00, 00, 000.00 (Rupees Twenty Crores Only) towards refund of the amount paid by the complainant. The complainant then presented one of the said cheques of Rs.3.00 crores for collection on 23/4/2021 through its banker Equitas Small Finance bank, Guntur Branch, Guntur and the said cheque was returned unpaid on 26/4/2021 with an endorsement Funds Insufficient". The complainant had represented the said cheque once