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2009 Supreme(Bom) 1241

HIGH COURT OF JUDICATURE AT BOMBAY
THE HONOURABLE MR. JUSTICE V.R. KINGAONKAR
Karishma Consultant & Another – Appellant
Versus
Om Prakash Agarwal & Others - Respondent
Criminal Application No.2336 of 2001 with Criminal Application No.2339 of 2001 with Criminal Application No.2337 of 2001 with Criminal Application No.2338 of 2001 with Criminal Application No.2340 of 2001
Decided on : 22-09-2009

Advocates appeared:
For the Applicants:N.K. Thakore i/by Prakash Naik, Advocates.
For the Respondents:R1, S.V. Marwadi, Advocate, Mrs. Usha V. Kejriwal, Mrs. A.A. Mane, A.S. Shitole, APP.

Headnote:Negotiable Instruments Act, 1881-Section 138 -Dishonour of cheque-Death of signatory of cheques -Prior intimation not given to the bank soon after death of the signatory and request was made to treat cheques in question as invalid instruments-Applicants being drawers of cheques in question, are liable to face criminal prosecution-Application dismissed. (Para 10)

JUDGMENT :-

1. The group of above noted applications filed by original accused persons for quashing of criminal complaint case u/s.482 of Criminal Procedure Code is being decided together in as much as identical questions of law and facts are involved therein:


2. The applicants are the proprietary business concern and proprietor, respectively who had certain transactions with the respondent no.1 (Complainant). Devang Desai was husband of the applicant no.2 and was duly authorized to issue cheques for and on behalf of the applicants. There is no dispute about the fact that he issued five cheques in question towards discharge of financial liability which the applicants were supposed to discharge. There is also no dispute about the fact that the said five cheques were dishonoured by the UCO Bank when they were presented for encashment. The UCO Bank returned the cheques to the respondent no.1 (Complainant) with intimation that the cheques could not be honoured due to insufficiency of the funds in the account of the applicants. There is also no dispute about the fact that the cheques were issued on Bank account of the applicants.


3. The respondent no.1 had issued demand notice in the context of the five criminal cases. That notice was replied by the applicants. The tenor of the reply was that the signatory of the cheques i.e. Devang Desai had died on 1st May 1996 before the presentation of the cheques in the Bank and as such, the cheques were no more valid instruments. It was also stated in the reply notice that the intimation was duly given to the Bank about the death of Devang Desai, yet the Bank had wrongly endorsed that the cheques could not be honoured due to insufficiency of the funds in the account.


4. The applicants seek quashing of the criminal complaint cases mainly on the ground that the cheques were no more valid one and, therefore, the dishonor of such cheques could not have incurred any criminal liability against them. They filed applications before the Metropolitan Magistrate, for discharge, which were rejected. The learned Metropolitan Magistrate held that the contention raised by the applicants could not be considered at the pre-emptory stage.


5. Heard the learned counsel.


6. Mr.Prakash Naik, learned counsel for the applicant submits that the respondent no.1 was duly intimated about the death of Devang Desai, the authorized signatory of the cheques and therefore, the complaint cases should not have been initiated at all. He would submit that the intimation was given to the Bank but incorrect endorsement was made by the Bank and therefore mere dishonor of the cheques cannot be a ground to proceed with the criminal cases. He contended that the cheques became invalid in the eye of law before the date of the presentation thereof. He invited my attention to the explanation given below Section 138 of the Negotiable Instrument Act as well as 141 of the Negotiable Instrument Act. He seeks to rely on certain observations in JT 2001 (10) SC 345 in Vinod Tanna & Anr. v. Zaheer Siddiqui & Ors. As against this, Mr.S.V.Marwadi, learned counsel for respondent no.1, submits that the complaint cases need not be quashed when the disputed question of facts are involved. He would point out that there is no record to indicate that the Bank was informed by the applicants about the death of said Devang Desai before presentation of the cheques in question. He contended that the cheques were issued by the authorized person for and on behalf of the applicants and therefore, the applicants are the drawers of the cheques. He seeks to rely on certain observations in 2000 ALL.MR. (Cri)1476 in Car Mart Pvt. Ltd V/s. Apollow Finvest India Ltd. & Ors.


7. Clinching question is whether the cheques in question lost validity due to the death of the authorized signatory and therefore, the applicants, who are the drawers of the cheques in the eye of law, can prima facie escape the criminal liability.


8. Admittedly, the cheques were drawn on account









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