IMPORTANT POINT
Offence under Section 138 of Negotiable Instruments Act can be held to be committed only on the date when cheque is returned unpaid by bank and thus person who signed the cheque as Secretary on behalf of Society who was admittedly not the Secretary on date on which cheque was returned unpaid could not be prosecuted for offence.

R. Basant, J.—What precisely is the offence under Section 138 of the Negotiable Instruments Act? On what date can the offence be held to be committed? These questions arise for consideration in these Revision Petitions which are directed against the concurrent verdicts of guilty, convictions and sentences imposed in two separate prosecutions between the same parties under Section 138 of the Negotiable Instruments Act.

2. The complainant in both these prosecutions is a Co-operative Society. The first accused in both cases is also a co-operative society. The second accused is the president of the first accused co-operative society, a named individual. The third accused is arrayed with the description that he is the secretary of the first accused Co-operative society. It is significant that the complaint is not against an individual acting as the Secretary. The third accused is shown as the Secretary of the Society. The incumbent functioning as the Secretary is not named as the third accused in either prosecution.

3. The prosecutions relate to four cheques for a total amount of Rs. 5,21,147. The complainant contended that the cheques were issued for the due discharge of a legally enforciable debt/liability. The same were dishonoured on the ground of insufficiency of funds. Notice of demand was duly issued. No payment was made. It is in these circumstances that the complaint came to the court with two separate complaints under Section 138 of the N.I. Act. Three instances of dishonour were brought in one case whereas the fourth was brought in as a separate complaint. Separate trials were held. In the prosecution relating to three cheques, the complaint examined himself as PW1 and the Manager of the Collecting Bank as PW 2. Exts. P1 to P8 were marked. The accused examined DWs 1 and 2. No documents were marked on the side of the accused in that case.

4. In the second case relating to one cheque, the complainant examined the Secretary of the Co-operative Society as PW1 and the Manager of the drawee Bank as PW2. Exts. P1 to P6 were marked. The accused examined DWs. 1 and 2 and proved Exts. D1 and D2. Both cases as well as both appeals were disposed of by common Judgments. The courts below concurrently came to the conclusion that all ingredients of the offence punishable under Section 138 of the N.I. Act have been established. Accordingly, they proceeded to pass the impugned concurrent Judgments. The trial court had found that the third accused is not guilty and had acquitted him in both cases. Accused 1 and 2, the Co-operative Society and its President are the petitioners before me. They were the appellants before the appellate court.

5. Called upon to explain the nature of the challenge which the petitioner wants to mount against the impugned concurrent Judgments, the learned counsel for the petitioners raises the following four grounds:

(i)The then Secretary of the first accused Society had not signed the cheque and hence the cheques were not duly executed cheques.

(ii)The cheques were handed over to the complainant Society only as security without the signature of the Secretary and such cheques were misutilised by the complainant.

(iii)The prosecution of accused 1 and 2 without arraying the then Secretary who allegedly signed the cheques along with the second accused is at any rate, bad in law in as much as the second and the third accused must be held to have joint and several liability under Section 141 of the N.I. Act.

(iv)The sentence imposed is at any excessive.

6. All the four cheques have been marked before the Courts below. The cheques show that the second accused/ President of the Society and the then Secretary of the first accused Society had signed the cheques. There is no dispute that the President and the Secretary are the persons competent to sign the cheques on behalf of the first accused. The contention is that the cheques when they were handed over did not contain the signature of the then Secretary.