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2018 Supreme(Raj) 1789
IN THE HIGH COURT OF RAJASTHAN
Mr. Kanwaljit Singh Ahluwalia, J.
Kapil Dev Sharma - Appellant
Versus
State Of Rajasthan And Others - Respondent
Criminal Miscellaneous (Petition) No. 5797 of 2018
Decided On : 19-09-2018
Hans Kumar Sharma, Advocate, for the Appellant; Ms. Meenakshi Pareek, P.P, for the Respondent
The competence of Directors to advance a loan is not the determining factor in a case related to the issuance and bouncing of a cheque under section 138 of the Negotiable Instruments Act.
Headnote:
Negotiable Instruments Act - Quasi Civil Proceedings - Summary Trial - Competence of Directors
Fact of the Case:
The petitioner filed an application to produce articles of association and certified copies of the memorandum to demonstrate that the Directors of the Company were not competent to advance the loan, in a case related to a cheque issued by the petitioner.
Finding of the Court:
The court found that the competence of the Directors to advance the loan was not the real issue before the trial court, and the application filed by the petitioner was deemed to be an attempt to delay the proceedings.
Issues: The issue was whether the cheque was issued by the petitioner and whether it had bounced due to insufficiency of funds, not the competence of the Directors to advance the loan.
Ratio Decidendi: The court emphasized that the proceedings under section 138 of the Negotiable Instruments Act are quasi civil in nature and prescribed for summary trial, and that the real issue was the issuance and bouncing of the cheque, not the articles of association or memorandum of the Company.
Final Decision: The petition was dismissed as being devoid of merits.
JUDGMENT
Kanwaljit Singh Ahluwalia, J. - In the present case, complaint was filed in the year, 2012. Petitioner/accused filed an application on 24.08.2018 praying therein that complainant/company be directed to produce articles of association and the certified copies of the memorandum to demonstrate that the Directors of the Company were not competent to advance the loan, as per articles of association.
2. Admittedly, the complainant is relying upon a cheque purportedly issued by the petitioner/accused. There is a presumption in favour of the holder of the cheque. The proceedings under section 138 of the Negotiable Instruments Act are quasi civil in nature having penal consequence. The legislature in its wisdom has prescribed summary trial of the offence under section 138 of the Negotiable Instruments Act.
3. In the present case, the petitioner is being tried by following procedure of summons case. The fishing roving enquiry is not permissible regarding the competence of the Directors to advance the loan, as the real issue before the trial Court, is whether the cheque, in question was issued by the petitioner and if so, whether same has bounced for insufficiency of funds or not. The question of issuance of cheque for due discharge of lawful consideration will not hinge upon articles of association of the Company or memorandum thereof.
4. There is merit in the observation made by the trial Court that the application has been filed only to delay the proceedings.
5. Consequently, the present petition, being devoid of merits is dismissed.
