2011(72) ACC 856
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
B.S.Verma,J.
Garhwal Mandal Vikas Nigam Ltd. – Applicants
Vs.
M/s Mata Garg & Co. Chartered Accountants, Dehradun – Respondents
Criminal Misc. Application (C482) No.20 of 2004.
Decided on : June 08 , 2010.
Section 138 - Negotiable Instruments Act - 138, 93, 141 - The court discussed the legal provisions of Sections 138, 93, and 141 of the Negotiable Instruments Act 1881. It highlighted the requirement of notice under Section 138 and the liability of individuals in charge of a company under Section 141. The court emphasized the necessity of statutory notice and its service on individuals sought to be made liable under Section 138.
Fact of the Case:
The respondent, an auditor, submitted a bill to the applicant for payment. A cheque issued for part payment was returned, leading to a complaint under Section 138 of the Negotiable Instruments Act. The court analyzed the bill, notice, and the liability of the accused.
Finding of the Court:
The court found that the complaint under Section 138 could not be legally proceeded against all accused due to lack of statutory notice and service on all individuals sought to be made liable.
Issues: The issues involved the legality of the complaint under Section 138, the requirement of statutory notice, and the liability of individuals in charge of a company under Section 141.
Ratio Decidendi: The court held that the complaint under Section 138 could not proceed against all accused due to the lack of statutory notice and service on all individuals sought to be made liable. It also emphasized the necessity of statutory notice and its service on individuals sought to be made liable under Section 138.
Final Decision: The court partly allowed the application under Section 482 of the Code of Criminal Procedure, quashing the proceedings against certain accused under Section 138 of the Act and directing the proceedings to continue against the remaining accused.
1. This application under Section 482 of the Code of Criminal Procedure has been moved by the applicants to quash the proceedings of Case No. 334 of 2000 under Section 138 of the Negotiable Instruments Act 1881 (for short the Act) pending in the court of Judicial Magistrate II Dehradun.
2. Relevant facts giving rise to the present application, in brief, are that the respondent no. 1 was appointed as Auditors of the company for the year 1993-94 for Garhwal Mandal Vikas Nigam Ltd. and the respondent no. 1 submitted its bill dated 30-11-1998 to the applicant no.1 for the amount of Rs. 1,36,115/-, out of which amount of Rs. 32,315/- was in lieu of travelling and out of pocket expenses. It appears that no vouchers/documents were submitted by the respondent no. 1 in support of travelling and out of pocket expenses at the time of submission of bill and the same were even not submitted thereafter.
3. A cheque No. 174624 dated 8-3-2000 for an amount of Rs. 34,393/- payable at Ganga Yamuna Gramin Bank Dehradun along with covering letter dated 15-3-2000 was issued in favour of the respondent no. 1 against part payment of the said bill in lieu of travelling and out of pocket expenses and service tax. In the covering letter the applicant no.1 had asked the respondent no. 1 to submit the bills of expenditures to the applicants and then to tender the cheque for encashment to the bank. A copy of the covering letter was also endorsed to the bank concerned with stop payment remark. However, the respondent no. 1 presented the cheque No. 174624 dated 8-3-2000 for Rs. 34,393/- to the bank for encashment, which was returned to the respondent no.1 with the remark “payment stopped”.
4. It appears that after the cheque was returned by the Bank with the remark “stop payment by the drawer” to the respondent no.1, the respondent no.1 issued a registered notice dated 21-3-2000 to Garhwal Mandal Vikas Nigam Ltd. Dehradun asking the applicant no.1 to send demand draft for the aforesaid amount within a period of fifteen day from the date of receipt of the notice. The applicants sent reply of the registered notice by letter dated 4-4-2000 to the respondent no.1 alleging therein that the respondent no. 1 was required to submit the vouchers of expenses before tendering the cheque to be bank for encashment.
5. A complaint was filed by the respondent no.1 against the three applicants under Section 138 of the Act in the court of the Chief Judicial Magistrarte Dehradun. In paragraph 8 of the complaint, the respondent no. 1 had mentioned that vide notice dated 21-3-2000 sent by registered post on 22-3-2000, complainant intimated the accused No. 1 about the fate of the said cheque and made a demand for the payment of the amount of said cheque within fifteen days of the receipt of notice. The complaint was registered as Criminal Case No. 334 of 2000 in the Court of Judicial Magistrate, II Dehradun.
6. It appears that the learned Magistrate after satisfying himself that there is sufficient ground for proceeding with the complaint, passed an order dated 12-6-2000 summoning the accused-applicant nos. 1 to 3 to answer the complaint. The accused-applicants filed objection, paper no. 18-A dated 27-11-2000 before the learned Magistrate. However, the learned Magistrate after hearing both the parties did not find favour with the applicants’ objection and rejected the same by his order dated 14-6-2001. Aggrieved by that order, the applicants preferred a revision before the revisional court. The revisional court after hearing the parties has observed that the applicant no. 2 is not protected under Section 197 of the Code of Criminal Procedure. The revisional court also did not find favour that the applicant no.2 is protected from prosecution under proviso second appended to Section 141 (1) of the Act. Ultimately, the revision was dismissed vide order dated 18-11-2003.
7. The applicants have approached this Court by making an application
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