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2007 Supreme(Guj) 594
Gujarat High Court
Judgename :M.R.SHAH
MAHENDRAKUMAR TULSIBHAI PATEL - Appellant
Versus
STATE OF GUJARAT - Respondent
CRIMINAL MISC. APPLICATION 181 Of 2007
Decided On : 09/26/2007
An individual who is not the signatory of the cheques cannot be held criminally liable under section 138 of the NI Act.
Headnote:
NI Act - Criminal Liability - Section 138
Fact of the Case:
The applicant, accused No. 2, filed applications to quash criminal complaints under section 138 of the NI Act. The complaints alleged that the accused issued cheques with insufficient funds, leading to criminal liability.
Finding of the Court:
The court found that the accused No. 2, who was not the signatory of the cheques, could not be held liable for the offence under section 138 of the NI Act. The court also noted the delay in verification of complaints and the absence of evidence to establish the accused's criminal liability.
Issues: The issues revolved around the criminal liability of the accused No. 2 under section 138 of the NI Act, delay in verification of complaints, and the absence of evidence to establish the accused's criminal liability.
Ratio Decidendi: The court held that the accused No. 2, not being the signatory of the cheques, could not be held criminally liable under section 138 of the NI Act. The court also emphasized the importance of timely verification of complaints and the need for evidence to establish criminal liability.
Final Decision: The court quashed and set aside the criminal complaints against the accused No. 2 under section 138 of the NI Act.
( 2 ) CRIMINAL Misc. Application No. 177 of 2007 is filed by the applicant " original accused No. 2 to quash and set aside the complaint being criminal case No. 2210 of 2005 pending before the learned JMFC, 4th Court, Vadodara qua the applicant.
( 3 ) CRIMINAL Misc. Application No. 178 of 2007 is filed by the applicant " original accused No. 2 to quash and set aside the complaint being criminal case No. 2211 of 2005 pending before the learned JMFC, 4th Court, Vadodara qua the applicant.
( 4 ) CRIMINAL Misc. Application No. 179 of 2007 is filed by the applicant " original accused No. 2 to quash and set aside the complaint being criminal case No. 2212 of 2005 pending before the learned JMFC, 4th Court, Vadodara qua the applicant.
( 5 ) CRIMINAL Misc. Application No. 181 of 2007 is filed by the applicant " original accused No. 2 to quash and set aside the complaint being criminal case No. 2213 of 2005 pending before the learned JMFC, 4th Court, Vadodara qua the applicant.
( 6 ) AFORESAID four complaints " criminal cases are filed by the respondent No. 2 " original complainant against the respective applicants before the learned JMFC, 4th Court, Vadodara for the offence under section 138 of the Negotiable Instrument Act; 1881 (hereinafter referred to as "the NI Act" for short) alleging inter alia that the original accused No. 1 is the proprietor of one Proprietorship Firm - S. J. Patel Firm and is doing business of selling and purchasing tobacco and that he is the sole responsible person for issuing the cheque with his signature towards the goods supplied to it and accused No. 2 is the nominated person of the original accused No. 1 and that he is also responsible for the cheque issued by the original accused No. 1, who has purchased the goods for and on behalf of the original accused No. 1. It is further alleged in the said complaints that the accused No. 2 on behalf of the accused No. 1 has purchased the goods by different eight invoices and the accused No. 2 has given various cheques signed by the original accused No. 1 and the said cheques were deposited with their banker and all the cheques were returned by the bank with an endorsement "insufficient fund. " It is further averred in the complaints that both the accused persons were served with the statutory demand notices as requires under section 138 of the NI Act and the applicant has given evasive reply and as the cheque amounts were not paid within 15 days from the date of receipt of the statutory notices, the original complainant has preferred aforesaid criminal cases against the applicant and others for the offence under section 138 of the NI Act. In all the aforesaid four complaints, the learned JMFC has issued summons upon the applicant and other for the offence under section 138 of the NI Act and therefore, the applicant " original accused No. 2 has preferred present applicants to quash and set aside the aforesaid criminal complaints.
( 7 ) SHRI V. M. Pancholi, learned advocate appearing for the respective applicants " original accused No. 2 has vehemently submitted that as the cheques in question were neither signed by the applicants nor drawn by the applicants, and admittedly even as per the averments in the complaints, goods have been purchased by the original accused No. 1 and he has issued the cheques in question, the applicants cannot be held liable for the prosecution under section 138 of the NI Act. It is also further submitted that admittedly the original accused No. 1 who has issued the cheques and in whose favour of the goods have been sold is a Proprietorship Firm and therefore, the applicants cannot be even held vicariously liable under section 141 of the NI Act. Shri Pancholi, learned advocate has relied upon the decision of the Hon ble Supreme Court in case of Raghu Lakshminarayanan V/s. M/s. Fine Tubes reported in
