Prafulla Mishra vs Laba Mallick Vs

Chittaranjan Dash, J

By meaans of this application, the Petittioner seeks indulgence of thiis Court, for quashing/setting aside thee order dated 03.08.2017 passeed by the learned S.D.J.M., Sonepur in ICC Case No.2 of 2017 undder Annexure-1.

The backkground facts of the case are that thhe Petitioner, Smt. Prafulla Mishra, was arrayed as one of the coo-accused in I.C.C. Case No. 2 of 2017 pending before the learned S.D.J.M., Sonepur, for alleeged commission of an offence punisshable under Section 138 off the Negotiable Instruments Act, 1881. The complainant, Laba Mallick (Opposite Party No. 2), alleged that accused no.1, son of the Petitioner, purchased a piece of land for a consideration of ₹15,40,000/- in the name of accusedd No. 2 (the Petitioner). Of thhe total amount, ₹6,40,000/- was paid in cash, and the remaining ₹9,00,000/- was paid by two post-daated cheques drawn on the account of accused No. 1. Howwever, upon presentation to the bank, both cheques were dishonooured due to insufficient funds, which was communicated to the complainant on 04.01.2017. Despite receiving a legal demand notice on 28.01.2017 asking them to pay the dishonoured amounts within the statutory period, the accussed failed to do so. Consequently, the complainant instituted the prresent proceedings before the learned S.D.J.M., Sonepur, who took cognizance of the offence under Seection 138 of the N.I. Act agaiinst the Petitioner as well. Being aggrrieved by the order of cognizaance, the Petitioner has approached this Court by filing the presennt CRLMC under Section 482 of thee Cr.P.C. for quashing of the entire criminal proceedings on the groound that she is neither the draawer nor signatory of the dishonoured cheques and cannot be held viicariously liable under the law.

Mr. Dwibedi, appearing on behalf of the Petitioner submits that she is only the mother of the co-accused and was not a party to the underlying trransaction nor to the dishonoured instrruments. The record demonstrates that the post-dated cheques were drawn and issued by accused No. 1, and the Petitioner neither signed the cheques nor maintained the account upon which they were drawn. Mr. Dwibedi asserts that the Petitioner cannot be fastened with criminal liability under Section 138 of the Negotiable Instruments Act, 1881, whichh requires that the person who “draws” the cheque is liable upon its dishonour. He further states that vicarrious liability under the N.I. Act is statutorily attracted only in casses involving companies or juridical persons, not in situations like thee present one where the Petitiooner is merely a family member. Meree registration of the property inn her name cannot imply criminal intent or liability under the N.I. Acct. Mr. Dwibedi submits that the compplaint and the cognizance order lack any specific allegations against the Petitioner, and the Magistrate took cognizance mechanically, without appreciating the absence of the Petitioner’s role as a drawer or signatory. The learned counsel presses that allowing the proceedings to continue against the Petitioner would cause undue harassment and defeat the ends of justice and prays to quash the order of cognizance dated 03.08.2017 and all proceedings against the Petitioner.

Mr. Mishhra, learned counsel for the Opposite Party, argues that the criminal proceedings initiated under Section 138 N.I. Act are fully justified as the Petitioner was the named purchaser and direct beneficiarry of the transaction; thus, her role cannot be overlooked. He further argues that the dishonoured cheques were issued to satisfyy the balance sale consideration for a property registered in herr name, making her an active particcipant in the transaction. Mr. Mishra contends that the plea that she is not a signatory cannot absolve her as she is vicariously liable. Whether she was involvedd in the transaction and liable along with accused No. 1 is a factuaal issue to be decided at trial. Mr. M ishra further places that the learned Magistrate rightly took cognizance after considering the material placed on record, and there iss no abuse of process justifyingg quashment, and this petition is hence liable to be dismissed to allow the trial to proceed in accordance with law. Mr. Mishra relied on relied on the decision in the matters of S.P. Mani and Mohan Dairy Vs. Snehalatha Elangovan, reported in MANU/SC/11899/2022, State of Haryana and Others Vs. Ch. Bhajan Lal and others reported in AIR 1992 SC 6044, and Laxmi Dyechem –Vrs.- State of Gujurat and others reported in 2013 (13) SCC 375.

For ready reference and better appreciation of the legal position, the releevant provision of Section 138 of the Negotiable Instruments Act, 1881, is extracted hereinbelow:

Dishhonour of cheque for insufficiency, etc., of funds in the account.—Where any cheque drawwn by a person on an account maintained by him with a banker for payment of any amount of monney to another person from out of that account for the dischargee, in whole or in part, of any debt orr other liability, is returned by the bank unpaid, either because of the amount of money standing to thee credit of that account is insufficient to honour the cheeque or that it exceeds the amount arranged to be paidd from that account by an agreement made with that bank, such persson shall be deemed to have committted an offence and shall, without prejudice to any other provision of this Act, be punished with imprisoonment for [a term which may be extended to two yearrs’], or with fine which may extend to twice the amoount of the chequue, or with both:

Provided that nothing contained in this sectionn shall apply unless—

(a) the cheque has been presented to the bank within a period off six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; inn writing, to the drawer of the cheque, 5 [within thhirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the casse may be, to the holder in due course of the cheque, within fifteen days of the receipt of thhe said notice.

Explanatiion.—For the purposes of this section,, “debt of other liability” means a legally enforceable debt or other liability.

Considering the aforesaid provision, it is evident that liability under Section 138 N.I. Act rests solely upon the person who has drawn the cheque on an account maintained by him. In the present case, therre is no material on record to connect the petitioner with the dishonooured cheques, as it is undisputed that they were drawn and signeed by her son, Ramakanta Mishra, frrom his own account. The stattutory scheme underscores that only the drawer of the cheque can be held liable for its dishonour. The petitioner is neither a signatory to the instruments nor a partner in any business nor in any mannner associated with the account or trransaction in question. Thus, there exists no legal basis to invooke criminal liability under Seection 138 of the N.I. Act against the petitioner, and the continuation of proceedings against her is unsustainable in law.

The dishonoured cheques in question, bearing cheque Nos.000021 dated 13.10.2016 for ₹5,00,000/- and 0000022 dated 13.10.2016 for ₹4,00,000/-, were both drawn on HDFC Bank, Sonepur Branch,, by accused No. 1, Ramakanta Mishhra, from his account bearing No. 50100002272557. The petitionerr herein, , is the mother of the drawer and was merely the registered owner of the purchased property. The transaction was conducted entirely by her son and all liiabilities arising from the dishonour off the cheques lie upon him as the drawer.

The record also indicates that the petitioner waas neither the signatory nor thee account-holder of the dishonoured cheques, and the property wass purchased in her name at the behesst of accused No. 1. No material has been produced to show any activve role of the petitioner in the financial transaction, and as such, liability cannot be fastened upon her under Section 138 of the Negotiable Instruments Act, 1881, especially when the cognizancee taken is not under any provision of the IPC.

The decisions referred by the learned counsel for the Opposite Parties are factually distinguishable and do not apply to the present case. In S.P. Mani and Mohan Dairy vs. Snehalatha Elangovan, the matter involved a partnership firm, which is not the factual situation here. Similarly, the decision in State of Haryana and Others vs. Ch. Bhajan Lal and Others lays down broad guidelines for thee exercise of jurisdiction under Sectionn 482 Cr.P.C. While those principles are well-settled and undisputed, they have no bearing on the present controversy, given the distinct faactual matrix. Further, the deciision in Laxmi Dyechem v. State of Gujarat and Others, pertains to a case where the dishonour arose due to the drawer’s signature not matching the specimen held by the bank, a situation entirely different from the present matter.

Consequeently, the facts enumerated in the citted decisions have no relevance to the present set of circumstances. In view of the above, none of thhe judgments relied upon by the Oppossite Parties is applicable to thee facts of the present case and therefore cannot advance their case. On the contrary, the cognizance taken against the petitioner, beeing neither in conformity with law nor supported by the facts on reecord, deserves to be quashed.

Accordingly, the order dated 03.08.2017 is set aside.

The learnned trial court is directed to proceed with the case against the remaiining accused as expeditiously as possible, keeping in view that the matter pertains to the year 2017.

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