IMPORTANT POINT
Dishonour of cheque--Offence by company--Cheque issued by director of company in discharge of liability of its sister concern company--No averment in complaint about commonness of Board of Directors between two concerns--Complaint quashed.

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:-

2. M/s Shree Nath Spinners Pvt. Limited 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.

3. Appellant/applicants are running business under the name and style of M/s Ratti Woollen Mills. Anil Sacher is one of its active partner who is competent to file that complaint. Respondent no.1 M/s Shree Nath Spinners Pvt. Limited 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. Limited 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.

4. 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.

5. 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 the 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.”

6. 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 a 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.

7. Learned counsel, in support of the view, draws sustenance from the judicial pronouncements reported as Devendra Kumar Rai Vs. Ram Gopal Rai 1999 (2) R.C.R. (Criminal) 217 and S.S.Ummul Habiba Vs. B. Rajendran 2005 (1) RCR (Criminal) 352.

8. The plea is resisted by the learned counsel for the respondents-accused by relying upon M/s Ancient Investment Pvt. Ltd. Vs. Kotak Securities, 1999 (4) R.C.R. (Criminal) 446.

9. Before proceeding to appreciate the respective contentions of the parties, it