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2009(2) Bankmann 57 (P&H)
PUNJAB AND HARYANA HIGH COURT
S.D. Anand, J.
Anil Sachar and another –Appellants
versus
M/s. Shri Nath Spinners Pvt.
Ltd. and Others –Respondents
Criminal Misc. No. A-379-MA of 2007
with Criminal Misc. No. A-381-MA of 2007
Decided on 16-12-2008
Counsel for the Parties:
For the Appellant:Mr. Punit Kansal, Advocate.
For the Respondent:Mr. Yogesh Goel, Advocate.
IMPORTANT POINT
A cheque issued by even a non party to a contract would render the person issuing it liable to prosecution under Section 138 of N.I. Act, if it had been issued of discharge of any debt or other liability and it bounced due to insufficiency of funds.
Headnote:Negotiable Instruments Act, 1881—Section 138—Complaint alleging dishonour of cheque—Trial Court acquitted respondents accused on ground that there was no contractual liability as between complainant and respondent 2, that there was neither averment nor proof that any goods had been supplied by complainants to respondent 2 and that cheques had been issued at the most as a means of security—Appeal—Held a cheque issued by even a non party to a contract would render person issuing it liable to prosecution under Section 138 of Act, if it had been issued of discharge of any debt or other liability and cheque bounced on account of insufficiency of funds which did not come to be paid by person issuing cheque even after service of statutory notice had been effected upon it—However there was no averment that indicated director issued the cheque in order to discharge the liability which respondent 1 accused had incurred—In order to attract applicability of provisions of Section 138 of Act, it was incumbent upon appellants complainant to make a precise averment that the commonness of Board of Directors between the two indicated concerns notwithstanding that cheques under reference had been issued by the indicated Director for discharge of liability incurred by sister concern—Hence held that though impugned finding of exoneration could not be invalidated in facts of case—Petition dismissed. (Paras 12 to 15)
S.D. Anand, J.—The appellants filed a complaint under Section 138 of the Negotiable Instruments Act (hereinafter called as ‘the Act’) against the respondents/accused on allegations which may be indicated as under:
M/s Shree Nath Spinners Pvt. Ltd. and M/s A. T. Overseas Limited are independent partnership concerns. There is an apparent and conceded commonness between the two inasmuch as both have same set of persons constituting the respective Board of Directors.
2. Appellant/applicants are running business under the name and style of
M/s Ratti Woollen Mills. Anil Sacher is one of its active partners who is competent to file that complaint. Respondent No.1 M/s Shree Nath Spinners Pvt. Ltd. placed an order for the supply of goods with the appellants. The supply was made and respondent No.1 M/s Shree Nath Spinners Pvt. Ltd. issued two cheques in favour of the appellants/ complainant through their sister concern
M/s A.T. Overseas (respondent No. 2) under signature of respondent-accused Munish Jain. The cheques bounced for want of sufficiency of funds.. The appellants/complainant served a statutory notice upon the respondents/accused requiring them to pay up but notice did not evoke any favourable response. The appellants/complainant were thereby impelled to file the impugned (private) complaint under Section 138 of the Act.
3. The learned Trial Magistrate, on appraisal of the evidence, exonerated the respondents/accused by observing that there was no contractual liability, as between the complainant and respondent No. 2; that there was neither averment nor proof that any goods had been supplied by the complainants to respondent No. 2 and that the cheques had been issued at the most as a measure of security.
4. Learned Counsel for the appellants/complainants argues that learned Trial Court did not, at all, appreciate the provisions of law by not noticing that a liability under Section 138 of Act would arise when the cheque is issued by even a non party to the contract but for the discharge of a debit/liability. The attention of this Court, in support of the above averment, is invited towards the underlined portion of Section 138 of the Negotiable Instruments Act, which reads as under:
“138. Dishonour of cheque for insufficiency, etc of funds in the account—Whereby any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years or with fine which may extend to twice the amount of the cheque, or with both.”
5. The plea raised thereby is that if the law makers wanted that the cheque must compulsively be issued by a party to the contract (and under liability) the provision would have stated so. The statute, the argument proceeds, consciously provided that a liability under Section 138 of the Act would arise even when a third party issued a cheque for the discharge, in whole or in part, of any debt or other liability.
6. Learned counsel in support of the view, draws sustenance from the judicial pronouncements reported as Devendra Kumar Rai v. Ram Gopal Rai1 and SS Ummul Habiba v. B. Rajendran.2
7. The plea is resisted by the learned counsel for the respondents/accused by relying upon M/s Ancient Investment Pvt. Ltd. v. Kotak Securities.3
8. Before proceeding appreciate the respective contentions of the parties, it would be appropriate to have a glance at the averments made in the course of the complaint the evidence adduced
