IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR
Mansoor Ahmad Mir, J.
Sunil Somnath Ghumare - Appellant
Versus
FIL Industries & Anr. - Respondent
561-A Cr.P.C. No. 14/2005
Decided On : 12 July, 2006
Held: I am of the considered view that the series of steps give cause of action to the complainant for presenting a complaint in terms of Section 138 of the Act. It is profit- able to reproduce Section 138 of the Act. (Para 6)
While going through this provision of law, it is crystal clear that drawing of cheque, presentation of cheque, dishonour of cheque, issuance of demand notice and failure of the drawer to make payment within 15 days from the date of notice are the ingredients which constitute the commission of offence and give jurisdiction to the Court. It is not necessary that all the five acts should be committed within one jurisdiction. The complaint under Section 138 of the Act can be presented before any Court having jurisdiction where one of the aforesaid act(s) came to be committed. (Para 7)
Applying the test to the case in hand, it is alleged, as discussed hereinabove, that cheque came to be presented before UCO Bank Branch Budshah Chowk, Srinagar and the said bank after following code formalities forwarded the cheque to Devayana Sahakari Bank Limited, Kopergaon and received the cheque back as bounced due to insufficient funds and accordingly, UCO bank informed the complainant. In the given circumstances, cause of action has also arisen at Srinagar. (Para 9)
(ii) Negotiable Instruments Act, 1881—Section 138 and 141—Dishonour of cheque—Offence by company/firm—No averment in complaint that petitioner a partner in firm was in-charge of and responsible to firm for conduct of its business—For fastening criminal liability there was no presumption that every partner knew about transaction—Proceedings against petitioner were liable to be quashed.
Held: While going through this provision of law, it mandates that the liability can be fastened on those partners, managers/directors who at the time of commission of offence were in-charge or and responsible to firm for the conduct of its business. The complaint must contain specific averment that the accused was at the relevant point of time in- charge of and responsible to the firm for the conduct of its business. If such an averment is lacking in the complaint, the complaint is not maintainable and is to be dismissed. (Para 13)
It is not alleged in the complaint that accused No. 2, petitioner herein, was in-charge of and responsible for the conduct of business at the relevant point of time.
Petitioner has also filed a certificate which appears to have been issued by concerned bank which discloses that accused No. 2, petitioner herein, is neither proprietor nor signatory of the cheque.
Keeping in view the above discussion, I am of the considered view that cognizance drawn and process issued against accused No. 2 is liable to be quashed. (Para 17 to 19)
Result: Petition disposed of
2. That the trial court i.e. Judicial Magistrate Ist Class (Sub-Registrar), Srinagar, is not having territorial jurisdiction to try the case.
The cause of action has not accrued in terms of Section 138 of the Negotiable Instrument Act, at Srinagar.
Petitioner (alleged accused No.2) is neither proprietor of the firm nor responsible for conduct of the business of the firm in any way.
Heard.
3. It is alleged in the complaint that accused issued cheque for an amount of Rs.3,45,772/- which was to be drawn at Devayana Sahakri Bank Limited, Kopergaon. Complainant presented it before UCO Bank, Budshah Chowk, Srinagar, on 9th April, 2002. The complainant was informed by the Bank authorities that cheque was received back due to "insufficient funds" and was returned to him which constrained him to serve a notice upon accused as per the mandate of law, and accordingly presented the complaint under Section 138 of Negotiable Instrument Act, hereinafter for short the Act, before the learned Chief Judicial Magistrate, Srinagar which came to be transferred to the Court of Judicial Magistrate Ist Class (Sub-Registrar), Srinagar. The trial court has drawn cognizance and issued process against the accused vide order dated 25th July, 2002.
4. I am of the considered view that the series of steps give cause of action to the complainant for presenting a complaint in terms of Section 138 of the Act. It is profitable to reproduce Section 138 of the Act, herein, which reads as under:-
"138. Dishonour of cheque for insufficiency, etc., of funds in the account. -- Where any cheque drawn by a person on an account maintain 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 provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice."
5. While going through this provision of law, it is crystal clear that drawing of cheque, presentation of cheque, dishonour of cheque, issuance of demand notice and failure of the drawer to make payment within 15 days from the date of notice are the ingredients which constitute the commission of offence and give jurisdiction to the court. It is not necessary that all the five acts should be committed within on
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