2010 (11) TMI 1110 - HC - Income Tax

Court quashes Section 138 complaint, finding lack of jurisdiction.

The Court set aside the cognizance order against the petitioner in a case under Section 138 of the Negotiable Instrument Act. The petitioner, who denied ... - Issues:- Challenge to cognizance order under Section 138 of the Negotiable Instrument Act, 1881- Review of cognizance order by the trial Court- Dismissal of the application for recall of cognizance order- Jurisdiction of the Court in taking cognizanceAnalysis:The respondent filed a complaint under Section 138 of the Negotiable Instrument Act against the petitioner, alleging business dealings where the petitioner issued a cheque. The petitioner, denying involvement, provided a bank statement to show he was not the signatory or the firm's proprietor. Initially challenging the cognizance order, the petitioner was directed to file a fresh application for review. The trial Court, despite directions, dismissed the recall application, leading to this petition.The trial Court noted the petitioner's evidence from the bank statement, confirming his lack of association with the firm or the cheque issuance. The respondent argued for prosecution under Section 420 of IPC, claiming cheating through the cheque. However, the Court found no merit in this argument, emphasizing that the petitioner had no connection to the firm or the cheque issuance.The Court observed that the cheque was issued by another individual claiming to be the firm's proprietor, not the petitioner. As the essential elements of Section 138 were not satisfied against the petitioner, the Court deemed the cognizance taken against him as lacking jurisdiction. Consequently, the impugned order was set aside, allowing the respondent to seek legal recourse against the appropriate individuals. Additionally, the private complaint under Section 138 was quashed, ruling in favor of the petitioner.