PUNJAB & HARYANA HIGH COURT
Paramjeet Singh, J.
Chawla Enterprises - Appellant
Versus
Harjot Enggl. Works and Ors. - Respondent
CRM-A-573-MA-2014
Decided On : 14-05-2015
Negotiable Instruments Act - Complaint Dismissal - Section 138 - 1881 - Summary of Acts and Sections: The court discussed the liability of non-signatories of a cheque under Section 138 of the Negotiable Instruments Act, the difference between sleeping partners and active partners in a partnership firm, vicarious liability under criminal law, and the burden of proof for the issuance of a cheque to discharge a legally enforceable liability. The court emphasized the necessity of specific averments in the complaint to make all accused liable and the requirement of fulfilling certain conditions for vicarious liability under Section 138 of the Negotiable Instruments Act. The court also highlighted the presumption under Section 139 and the need for the prosecution to prove the guilt of the accused beyond a reasonable doubt.
Fact of the Case:
The applicant filed a complaint under Section 138 of the Negotiable Instruments Act alleging that the accused, a partnership firm and its partners, issued a cheque that was dishonored. The trial court acquitted the accused, leading to the application for leave to appeal.
Finding of the Court:
The court found that the complainant failed to prove the guilt of the accused beyond a reasonable doubt, especially regarding the issuance of the dishonored cheque to discharge a legally enforceable liability.
Issues: The issues included the liability of non-signatories of a cheque, the difference between sleeping and active partners in a partnership firm, vicarious liability under criminal law, and the burden of proof for the issuance of a cheque to discharge a legally enforceable liability.
Ratio Decidendi: The court emphasized the necessity of specific averments in the complaint to make all accused liable, the requirement of fulfilling certain conditions for vicarious liability under Section 138 of the Negotiable Instruments Act, and the need for the prosecution to prove the guilt of the accused beyond a reasonable doubt.
Final Decision: The application for leave to appeal was dismissed on merit.
1. The instant application has been filed under Section 378(4) Cr.P.C. for grant of leave to appeal against the impugned judgment dated 28.01.2014 passed by the Judicial Magistrate Ist Class, Jalandhar whereby complaint filed by applicant under Section 138 of the Negotiable Instruments Act has been dismissed and respondents have been acquitted of the notice of accusation issued against them.
2. Brief facts of the case are that a complaint was filed by the applicant-complainant under Section 138 of the Negotiable Instruments Act, 1881 alleging that accused No. 1 is a partnership firm and accused Nos. 2 to 4 are its partners. They are incharge of and responsible to the firm for the conduct of its business. Accused purchased on credit pig iron from the complainant from time to time and according to account books of the complainant a sum of ` 24,58,589/- is outstanding balance which is payable by the accused to the complainant and in order to discharge the part of their liability the accused issued a cheque bearing No. 588887 dated 01.10.2009 for a sum of ` 3,00,000/- drawn on Oriental Bank of Commerce, S.C.O-44, Opp. District Secretariat, Ladowali Road, Jalandhar, in favour of the complainant with the assurance that same would be honoured on presentation. However, on its presentation the said cheque was returned back dishonoured vide memo dated 27.03.2010 with remarks "Insufficient Funds". Upon this, complainant got issued legal notice dated 24.05.2010 to the accused under Section 138 of the Negotiable Instruments Act through registered post as well as U.P.C. calling upon the accused to make the payment within the stipulated period of 15 days, but the accused failed to do so. Hence, the complaint was filed.
3. On the basis of preliminary evidence, notice of accusation for commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 was served upon the accused-respondents to which they pleaded 'not guilty' and claimed trial.
4. The complainant, in order to prove his case, examined himself as CW1. Thereafter, statements of the respondents-accused under Section 313 Cr.P.C. were recorded wherein they pleaded complete innocence and false implication.
5. The trial Court, after appreciating the evidence, acquitted the respondents of the notice of accusation, served upon them, vide impugned judgment dated 28.01.2014. Hence, this application for grant of leave to appeal.
6. I have heard learned counsel for the applicant and gone through the impugned judgment.
7. The trial Court, after appreciating the evidence on record, observed as under:--
"10. I have considered the contentions of the learned defence counsel as well as the learned counsel for the complainant. Out of the arguments advanced by learned counsel for the parties, the following points of determination arises:--
"1. Whether the non-signatory of a cheque can be made liable for an offence U/s 138 of Negotiable Instruments Act?
2. Whether there is difference between sleeping partners and active partners for determining their liability U/s 138 of Negotiable Instruments Act?
3. Is there any vicarious liability under the criminal law?
4. Whether the cheque in question has been issued by the accused to discharge any legally enforceable liability?
POINT NO:1
11. It was the contention of learned defence counsel that the non-signatory of a cheque cannot be made liable for an offence under section 138 of Negotiable Instruments Act. In this respect Hon'ble Kerala High Court has held in Mymoonath Beevi v. State of Kerala, 2006(1) Civil Court Cases 161 (Kerala), that when the offence is committed by a firm, the criminal liability is not confined to the signatory of the cheque alone but also to non-signatories also provided the other conditions in that regard are satisfied. These necessary conditions are that complainant must specifically make an averment in his complaint describing the role of each partner who are made accused in the complaint i.e. th
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