Back
High Court of Judicature at Madras
S. NAGAMUTHU
Abraham Memorial Educational Trust & Others
Versus
C. Suresh Babu
Crl.OP Nos.12630 & 12661 of 2012 & M.P.Nos.1,1,2 & 2 of 2012
Decided On : 07-08-2012
(B)Negotiable Instruments Act, 1881(26 of 1881)-Sec.138, 141-Indian Trusts Act, 1882(2 of 1882)-Sec.3-Cheque dishonour-Trust-Public trust-Liability- Person-Artificial person-Trust is an ’artificial person’ having separate personality.
This is only an illustration to show that a Trust founded for a charitable purpose or for a private purpose has been recognised as a juristic person by the Government. Thus, a Public Charitable Trust is an organisation and the same enjoys legal status having rights, liabilities and obligations. Para 21
(C)Negotiable Instruments Act, 1881(26 of 1881)-Sec.138, 141-Indian Trusts Act, 1882(2 of 1882)-Sec.3- General Clauses Act, 1897(10 of 1897)-Sec.2(42)-Cheque dishonour-Trust-Public trust-Liability-Person-Public charitable trust is a ’person’ which could be prosecuted for an offence of cheque dishonour.
It is, of course true, that the term ’Trust’ has not been expressly included in Section 2 of the General Clause Act. As we have already noticed, a Trust enjoys various rights and discharges various obligations like that of other institutions enumerated under Section 2(42) of the General Clauses Act, as well as, Section 11 of the Indian Penal Code. Therefore, applying the doctrine of ejusdem generis, I have no hesitation to hold that a Public Charitable Trust falls within the definition of the term ’person’ as defined in Section 11 of the Indian Penal Code and Section 3(42) of the General Clauses Act. Para 23
(D)Negotiable Instruments Act, 1881(26 of 1881)-Sec.138, 141-Indian Trusts Act, 1882(2 of 1882)-Sec.3-Cheque dishonour-Trust-Public trust-Prosecution-Person-Juristic person-A trust, whether private or public, is a juristic person who can sue/be sued or prosecute/be prosecuted.
From the foregoing discussions, it is manifestly clear that the moment a Trust (organisation) is formed with an obligation attached to the same, an artificial person is born and because such artificial person is recognised by law, conferring upon such artificial person right to own property, to enjoy certain other rights and also to discharge certain obligations, it attains the status of a "juristic person". Thus, a Trust, whether private or public, is a juristic person who can sue/be sued or prosecute/be prosecuted. Para 27
(E)Negotiable Instruments Act, 1881(26 of 1881)-Sec.138, 141-Indian Trusts Act, 1882(2 of 1882)-Sec.3-Cheque dishonour-Trust-Company-Prosecution-A trust, having two or more trustees, is a "company" for the purposes of Sections 138 and 141 of The Negotiable Instruments Act.
Thus, the Trust, being a combination of individuals, is an ’association of individuals’ in terms of Section 141 of the Negotiable Instruments Act. Thus, there can be no difficulty in holding that a Trust, having two or more trustees, is undoubtedly a "company" for the purposes of Sections 138 and 141 of The Negotiable Instruments Act. Para 49
1. Whether a Public Charitable Trust is a juristic person and a company in terms of Section 141 of the Negotiable Instruments Act, 1881 is the issue involved in these petitions.
2. The petitioners are the accused Nos.1 and 3 to 9 in S.T.C No.71 of 2012 as well as in S.T.C. No.68 of 2012 on the file of the learned Judicial Magistrate (Fast Track Court), Hosur. Seeking to quash the said cases, the petitioners have come up with these Criminal Original Petitions. The common respondent in these Criminal Original Petitions is the complainant in both the cases before the Trial Court.
3. Since common issues have been raised in both these Criminal Original Petitions, they have been heard together and they are disposed of by means of this common order.
4. The facts of the cases would be as follows:
(i) The first accused is a public charitable trust known as "M/s.Abraham Memorial Educational Trust". The said Trust is running a school in the name and style of "Ebenezer International School" in Bangalore. The common second accused in both these cases by name Abraham Ebenezer was its Chairman and Managing Trustee. The other petitioners herein are the Trustees of the first accused Trust.
(ii) It is alleged that for the purpose of developing the school run by the first accused Trust, the second accused borrowed a sum of Rs.7,00,00,000/-on behalf of the first accused from the respondent complainant. Assuring repayment of the above loan amount, the first accused had executed a registered Deed of Mortgage dated 06.10.2008 itself. Apart from that, the second accused has also executed two other registered Deeds of Mortgage dated 06.10.2008 in favour of the complainant mortgaging land and building where the school is housed and also mortgaging the agricultural land in Survey No.45/1 at Gottamaranahalli village. The first accused also agreed to pay interest at the rate of 21% p.a. on the above said sum.
(iii) In discharge of the above debt, the first accused has issued 20 post-dated cheques each for Rs.36,75,000/- in favour of the complainant drawn on Vijaya Bank, Bangalore. As per the Memorandum of Understanding between them, these post dated cheques could be pressed into service for recovery of the amount due from the first accused, if the loan together with interest was not repaid promptly by the first accused. But the first accused did not clear the above loan amount, both principal as well as the interest.
(iv) In those circumstances, the complainant presented the cheque bearing No.443513 for collection. That cheque for Rs.36,75,000/-, representing the interest amount for the period between 08.10.2011 to 07.01.2012, was presented for collection on 21.03.2012 and the same was dishonoured for want of sufficient funds. Legal Notice under Section 138 of the Negotiable Instruments Act was issued to all the accused and since the money demanded was not paid, the case in S.T.C.No.68 of 2012 was instituted.
(v) Similarly, the post-dated cheque bearing No.443514 was presented for collection on 07.04.2012. That cheque is for Rs.36,75,000/-representing the interest amount for the period between 08.01.2012 to 07.04.2012. The same was dishonoured for want of sufficient funds. Legal Notice was issued to all the accused under Section 138 of the Negotiable Instruments Act demanding the cheque amount. The accused did not pay the same. Therefore, the complainant instituted the case in S.T.C.No.71 of 2012.
5. According to the complainant, the first accused is a company in terms of Section 141 of the Negotiable Instruments Act and therefore it is liable for punishment under Section 138 of the Act in both the cases. So far as the accused Nos.3 to 9 are concerned, according to the complainant, they were the Trustees of the first accused Trust and they were in-charge of the day-to-day affairs of the first accused Trust and so, by virtue of Section 141 of the Act, they are also liable for punishment under Section 138 of the Negotiable Instruments Act
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
