M.V. Muthuramalingam vs D. Narayanaswamy

Thangamani, J.—On November 4, 1991, and on November 15, 1991, the petitioner issued two cheques for Rs. 2,00,000 each drawn on

the Federal Bank Limited, Anna Nagar, in favour of the complainant. The cheques were presented on December 11, 1991, and they were

dishonoured. The respondent again presented the cheques on January 18, 1992, and they were dishonoured on January 20, 1992, on the ground

that there were no sufficient funds in the account of the drawer. On February 5, 1992, the respondent telegraphically called upon the petitioner to

pay the amount due on the cheques. The petitioner acknowledged the receipt of the telegram on the same day, but failed to pay the cheque

amount. So, the respondent preferred a private complaint in C. C. No. 1737 of 1992 in the Court of the XVIII Metropolitan Magistrate,

Saidapet, Madras, which was taken on file u/s 138 of the Negotiable Instruments Act.

The petitioner submits that he is the chairman of the Vellammal Educational Trust. The respondent offered to sell his lands for the purpose of

constructing an engineering college by the trust for a sum of Rs. 8,65,810. On October 21, 1991, sale deed was executed in respect of an area of

135 acres. On the date of the sale deed, the petitioner paid Rs. 4,65,000 in cash and gave the two cheques above referred to. Subsequently, the

petitioner came to know that the respondent had no title to convey the land. So the petitioner asked the respondent to return the cash of Rs.

4,65,000 and not to present the two cheques for payment. However, the respondent assured that he would arrange for the issue of patta in favour

of the petitioner, using his influence with Government officials. For that purpose, he received an additional amount of Rs. 10,000 from the petitioner

towards expenses. But the respondent did not keep up his promise. Only in order to prevent the petitioner from taking legal proceedings against

him, he has now chosen to file the complaint. Hence, the proceedings in C. C. No. 1737 of 1992, on the file of the XVIIIth Metropolitan

Magistrate, Saidapet, have to be quashed u/s 482 of the Criminal Procedure Code.

Learned counsel for the petitioner argues that the cheques were dishonoured on January 20, 1992, but the notice of demand was sent by the

respondent only on February 5, 1992, which is after the expiry of fifteen days prescribed under proviso (b) to section 138 of the Negotiable

Instruments Act and so the complaint instituted on February 27, 1992, does not satisfy the requirements of that section. The Act stipulates that the

holder of the cheque makes a demand for the payment of money covered by the cheque by giving a notice in writing to the drawer within fifteen

days of the receipt of information by him from the bank regarding the return of the cheques as unpaid. As pointed out by learned counsel for the

respondent, ""notice in writing"" which is required u/s 138(b) of the Negotiable Instruments Act need not necessarily be only by registered post, and

it can as well be by a telegram or by a letter, vide V. P. Revathi v. Asha Bagree [1991] LW (Crl.) 468; [1992] 75 Comp Cas 372. And we find

from the records that on January 21, 1992, the cheques were returned to the payee unhonoured. And the required telegram has been sent on the

fifteenth day which is February 5, 1992. So the notice satisfies the stipulations contained in section 138 of the Negotiable Instruments Act.

Thiru Karpagavinayagam, learned counsel for the petitioner, next submits that the cheques herein have been issued by the petitioner in his

capacity as the chairman of the Vellammal Educational Trust. They were also drawn on the account of the said trust with the Federal Bank

Limited. Whereas the complaint has been referred against M. V. Muthuramalingam, the petitioner herein in his individual capacity. The person who

has committed the offence is the chairman of the Educational Trust. u/s 138 of the Negotiable Instruments Act the dishonoured cheque should have

been drawn by a person on an account maintained by him with the banker for payment of any amount of money to another person from out of that

account. So the complaint could only be against the account holder. And since Vellammal Trust is the account holder and not the petitioner,

Muthuramalingam, this complaint is unsustainable. He also points out that a trust cannot be equated with a company registered under the Indian

Companies Act. There is no other provision in the Negotiable Instruments Act akin to that of section 141 of this Act under which a trustee could

be made liable for the act of the trust.

In Jethabhi Nanjibhai Vs. Bipinchandra Parshotam and Another, a charge was framed u/s 406 of the Indian Penal Code on the basis of the

complaint that some amount was realise during the business of the firm of which the accused was the managing Director. The charge-sheet was

quashed for the reason that before the accounts are taken, there cannot be a criminal complaint of misappropriation of a sum admittedly received

during the partnership, unless there is evidence to show that the money was specially entrusted to the applicant. But the facts in the present case

and point involved are different and evidently this decision cited by the petitioner cannot help him in any manner.

In U. P. Pollution Control Board v. Modi Distillery , it has been held where an offence is committed by a company, every person who at the

time of the commission of the offence was in charge of and responsible to the company for the conduct of the business of the company, as well as

the company, shall be liable to be proceeded against. We have already seen that the analogy at a company cannot be invoked in this case.

The next decision cited by learned counsel for the petitioner is that in Thomas Varghese v. P. Jerome [1992] 2 Crimes 919; [1993] 76 Comp

Cas 380. That case relates to the rights of the complainant to initiate proceedings u/s 138 of the Act when the complainant has specifically stated

that the accused had no amount in his account with the bank for honouring the cheque. This does not relate to the point in dispute and hence is not

relevant for the present case.

In K. Krishan Buoy v. Arti Press [1991] LW (Crl.) 513; [1994] 80 Comp Cas 750, the company which had committed the offence was not

the accused. The cheque was issued by the managing director of S company who was also the managing director of G company for meeting the

liability owed by S company. In the petition to quash the complaint it was contended for the accused that according to the complaint, the cheque

was issued by G company which owed no debt to the complainant whereas the liability was that of G company and as such, the petitioner who

was shown as the managing director of S company cannot be prosecuted. Held, that even though the accused has signed the cheque as the

managing director of G company, since the G company is not an accused, the person who is in charge and who is responsible to the company for

the conduct and business of the company cannot be made as an accused. This case also cannot help the petitioner since section 141 of the Act has

no application to the present case.

Learned counsel for the respondent submits that even in the complaint he has stated the role played by the petitioner which makes him liable for

the offence punishable u/s 138 of the Act. This respondent was only a power of attorney-holder to sell and execute the sale deeds on behalf of the

real owners of the property on receiving the sale price. The dishonoured cheques have no connection whatsoever with regard to the balance sale

price of Rs. 4,00,000 out of the total consideration of Rs. 8,65,810. The cheques were issued only towards the repayment of loan amount

advanced to the petitioner herein by this respondent. Evidently, this is not a matter to be considered at this stage and the circumstances in which the

cheques came to be issued and whether they were re-presented on January 18, 1992, at the request of the drawer could be decided only during

the trial.

Further, as rightly urged by learned counsel for the respondent, unlike a company registered under the Indian Companies Act, the trust is not a

juristic person having a separate legal entity. It can act only through its trustees. So, when the petitioner came to issue the impugned cheques and

that has resulted in his committing an offence u/s 138 of the Negotiable Instruments Act, he is liable to be proceeded against. The failure to

describe him in the relevant complaint as the trustee of Vellammal Trust is of no consequence. So I find no merit in the contention of the petitioner.

In the result, the petition is dismissed.