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R. G. AVACHAT
Posh Agro – Appellant
Versus
State of Maharashtra – Respondent
JUDGMENT
1. Heard finally with consent of learned counsel for the parties.
2. This petition has been filed for quashment of complaint/criminal proceeding of Summary Criminal Case No. 2566 of 2021, instituted for the offence punishable under Sec. 138 of Negotiable Instruments Act ('N.I. Act'). The petitioners herein are Accused Nos. 1 to 4 in the said case.
3. The facts, giving rise to the present proceeding are as follows :- Respondent No.2 is a private limited company engaged in business of arranging or helping or assisting in fund raising. Petitioner No.1 is a partnership firm. Petitioner Nos. 2 to 4 are it's partners. The petitioners wanted to set-up a unit for manufacturing jaggery in Maharashtra. They, therefore, approached Respondent No.2 - complainant for raising of funds for the proposed project. An agreement in writing came to be executed between the petitioners and Respondent No.2 on 14/9/2020. Respondent No.2 - complainant claims to have provided all the assistance and ensured grant of loan by the Central Bank of India for the proposed project. The petitioners, however backed-out of the transaction. It is also the case of Respondent No.2 - complainant that since it had to
The court clarified the conditions for prosecution under Sec. 138 of the N.I. Act, emphasizing that joint liability does not automatically lead to prosecution.
Only the drawer of the cheque can be prosecuted under Section 138 of the Negotiable Instruments Act, and joint account holders cannot be held liable unless the cheque has been signed by each and ever....
An individual cannot be prosecuted under Section 138 of the NI Act if they did not issue the cheque drawn on their account. Liability regulations do not extend to directors not involved with the cheq....
A person cannot be held liable under Section 138 unless they are the drawer of the dishonoured cheque or qualify under vicarious liability provisions.
Liability under Section 138 of the N.I. Act requires the accused to be a signatory to the dishonored cheque, and the provisions of Section 141 regarding the liability of a company, firm, or associati....
An individual can only be held liable under Section 138 of the NI Act if they are the drawer of the cheque and maintain the account from which it is issued.
Vicarious liability under Section 138 of the Negotiable Instruments Act requires the company to be named as an accused; absence of the company renders the complaint against the individual not maintai....
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.
(1) Dishonour of cheque – A person might have been jointly liable to pay debt, but if such a person who might have been liable to pay debt jointly, cannot be prosecuted unless bank account is jointly....
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