Bijoy Kumar Moni v. Paresh Manna & Anr.

Bijoy Kumar Moni v. Paresh Manna & Anr.

the case of P. Sarvana Kumar v. S.P. Vijaya Kumar reported in 2022 SCC Online Mad 1387. The said decision was rendered in a petition filed under Section 482 of the Cr.P.C. for quashing of the private complaint filed against the petitioner therein for the offence under Section 138 of the NI Act. The petitioner therein, who was arraigned as the second accused in the complaint, had filed the petition seeking quashing of the complaint qua him on the ground that the cheque, which came to be dishonoured, was signed by him in his capacity as an authorized signatory acting on behalf of the owner of a proprietorix concern, and thus he could not be said to have drawn the cheque on an account maintained by him, and the liability under Section 138 could only be affixed on the owner of the proprietorix concern. It was also contended by the petitioner therein that the provisions of Section 141 of the NI Act would have no applicability to a case involving a proprietorship concern as the same is not owned by a collection of individuals but a single person.

64Copy pinpoint64. The High Court while rejecting the contention of the petitioner therein, adverted to the object of Section 138 of the NI Act to hold that the authorized signatory could be said to be the drawer of the cheque as he was “maintaining” the account held in the name of the proprietorix concern and thus could be held liable under Section 138 of the NI Act.

65Copy pinpoint65. We find it difficult to subscribe to the view taken by the High Court in the aforesaid decision. The High Court referred to an extract from the 11th Edition of the commentary on the NI Act by Bhashyam and Adiga wherein the liability of the principal for the acts of the agents has been discussed and erroneously relied upon it to attribute liability to the petitioner therein, who was the agent acting on behalf of the proprietorix concern.

66Copy pinpoint66. The position of law as has been settled by this Court and reiterated in a legion of decisions is that it is only the drawer of the cheque who can be held liable for an offence under Section 138 of the NI Act. Further, this Court has also declared through several pronouncements on the subject that an authorised signatory acting on behalf of the principal cannot be said to be the “drawer” of the cheque “on an account maintained by him with a banker” under Section 138.

67Copy pinpoint67. It is also pertinent to note that the High Court in the aforesaid decision also referred to the decision of this Court in Raghu Lakshminarayanan v. Fine Tubes reported in (2007) 5 SCC 103

p. 1994

wherein it was categorically held by this Court that Section 141 of the NI Act will have no application to proprietorship concerns as they are owned by individuals and do not have a separate corporate identity. However, the High Court distinguished the said decision by holding that although the signatory of a cheque issued on behalf of a proprietorship concern cannot be said to be vicariously liable under Section 141 yet he could be held liable in his capacity as the drawer of the cheque under Section 138 of the NI Act.

68Copy pinpoint68. We find it difficult to approve the line of reasoning adopted by the High Court in relying upon the object behind the enactment of Section 138 of the Act to liberally interpret the language of Section 138 of the NI Act so as to include even an authorized signatory within its ambit. Section 138 of the NI Act being penal in nature has to be strictly construed and advertence to the object behind its enactment can only be made to supplement the language employed in the text of the statute and not to supplant it or render it overly broad and susceptible to misuse. This Court in P.J. Agro Tech (supra) noted as under: “14. … An action in respect of a criminal or a quasi- criminal provision has to be strictly construed in keeping with the provisions alleged to have been violated. The proceedings in such matters are in personam and cannot be used to foist an offence on some other person, who under the statute was not liable for the commission of such offence.”

E. CONCLUSION

69Copy pinpoint69. As discussed above, in the case on hand, the accused was prosecuted in his individual capacity and not in his capacity of being the Director of the Shilabati Hospital Pvt. Ltd. Although it is undisputed that the accused signed the cheque in question, yet as the cheque was drawn not on an account maintained by him with a Banker but was issued on an account maintained by the hospital, the requirement of Section 138 of the Act cannot be said to have been complied with.

70Copy pinpoint70. It would have been altogether a different situation if the accused was prosecuted in his capacity as a Director of the Shilabati Hospital. In such a scenario, the cheque drawn by him on an account maintained

p. 1995

by the Company would have satisfied the requirement of Section 138 of the Act but as the accused has been proceeded against for an offence under Section 138 of the Act in his individual capacity and inasmuch as the cheque dishonoured for insufficiency of funds was drawn on the account maintained by the Company, namely, Shilabati Hospital Pvt. Ltd., and not by the accused herein, no offence could be said to have been committed under Section 138 of the Act. The High Court rightly held that in the absence of the principal offender having been arraigned as an accused, prosecution for the commission of an offence under Section 138 of the NI Act could not have proceeded against the accused.

71Copy pinpoint71. As is evident from the discussion in the preceding parts of this judgment, the requirement of Section 138 of the NI Act is that for fastening criminal liability on the accused, the cheque which was dishonoured for insufficiency of funds etc., must have been drawn on an account maintained by the accused. The mere fact that the cheque signed by the accused in his capacity as a “Director” of the Company would in the normal course be honoured by the Bank to which it was presented does not satisfy the statutory requirement of Section 138 of the Act.

72Copy pinpoint72. Section 138 of the Act exposes the person who has drawn the cheque and which has been returned for insufficiency of funds to criminal liability. The provision, therefore, must be construed strictly. However, such a strict construction should not result in defeating the very purpose for which the provision has been enacted as held by this Court in the case of NEPC Micon Limited and Others v. Magma Leasing Limited reported in (1999) 4 SCC 253. At the same time, the statutory provisions creating penal liability cannot be stretched too far to embrace the persons and situations patently excluded from its purview as discernible from clear and unequivocal language used in the provision.

73Copy pinpoint73. Section 138 of the NI Act clearly postulates that the cheque returned for insufficiency of funds should have been drawn by a person on an account maintained by him. It will amount to doing violence to the language of the statute if Section 138 of the Act is interpreted to mean that even if a person draws a cheque on an account not maintained by him, he shall be liable if the cheque is returned for insufficiency of funds. Such an interpretation will lead to absurd and wholly unintended results.

p. 1996

74Copy pinpoint74. However, the peculiar factual situation of the present case and the plight of the complainant is not lost upon us. We are conscious of the fact that the option of bringing civil action against the accused or the hospital will be of no avail to the complainant as the claims are hopelessly time barred. Further, it is also not open for the complainant to initiate proceedings under Section 138 of the NI Act afresh by impleading Shilabati Hospital Pvt. Ltd. as an accused as the time period prescribed for issuance of statutory notice under Section 138 has long expired.

75Copy pinpoint75. It is trite law that an act may constitute an offence under more than one statute. The encashment of the cheque for an amount of Rs 7,00,000/- issued by the complainant in favour of the accused stood proved during the course of the trial. Further, the conduct of the accused in not replying to the statutory notice of dishonour of cheque issued by the lawyer for the complainant and in not taking the plea of the cheque having been drawn on the account of the company in his capacity as a Director during the course of trial undoubtedly raises questions as regards his dishonest intention in not repaying the amount borrowed by him from the complainant.

76Copy pinpoint76. In such circumstances, although it is not possible to hold the accused liable for the offence under Section 138 of the NI Act, yet the possibility of him having committed the offence of cheating cannot be ruled out. Prima facie, the mens rea (guilty mind) of the accused speaks for itself.

77Copy pinpoint77. We leave it open to the complainant to approach the jurisdictional police station and lodge an appropriate FIR against the accused. If the complainant lodges an FIR, the concerned police officer in-charge of the police station shall investigate the same in accordance with law.

78Copy pinpoint78. In view of the above, the appeal fails and is hereby dismissed.

79Copy pinpoint79. Pending application(s), if any, stand disposed of.

Result of the Case: Appeal dismissed.

† Headnotes prepared by: Bibhuti Bhushan Bose