TaxTMI 
TaxTMI 
2017 (4) TMI 2
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....tkumar Babulal Shah, availed of the loan facility from the respondent no.2, a finance company. Indisputably, the loan agreement has been signed jointly, i.e. by the husband as well as the applicant herself. In discharge of the loan liability, the husband issued a cheque drawn in favour of the respondent no.2 dated 5th February 2013 for the amount of Rs. 88,673=00. The said cheque came to be dishonoured due to funds insufficient in the account maintained by the husband of the applicant herein. In such circumstances, the respondent no.2 lodged a complaint in the Court of the learned Metropolitan Magistrate which was numbered as Criminal Case No.1746 of 2014. The short point for my consideration is, whether the applicant herein could be held to be responsible for the offence punishable under Section 138 of the Negotiable Instruments Act. Indisputably, the applicant herein has not signed the cheque. She might have signed the loan agreement along with her husband but that by itself is not sufficient to fasten the liability if the cheque drawn by the husband is dishonoured. This issue is no longer res integra in view of the decision of the Supreme Court in the case of Mrs.Arpana A.Shah v....
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.....01.2001, the complainant filed an FIR against all the accused for the offence under Sections 420, 467, 468, 471 and 406 of the Indian Penal Code, 1860 (hereinafter referred to as "IPC") and there was hardly any dispute that the cheque, subject-matter of the complaint under Section 138 of the N.I. Act, had not been drawn by the appellant on an account maintained by him in Indian Bank, Sonepat Branch. In the light of the ingredients required to be fulfilled to attract the provisions of Section 138, this Court, after finding that there is little doubt that the very first ingredient of Section 138 of the N.I. Act enumerated above is not satisfied and concluded that the case against the appellant for having committed an offence under Section 138 cannot be proved. 10. In S.K. Alagh v. State of Uttar Pradesh and others (2008) 5 SCC 662 : (AIR 2008 SC 1731 : 2008 AIR SCW 2389), this Court held: "19. ..... If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a Company or an employee cannot be held to be vicariously liable for any offence committed by the Com....
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....he company, as well as the company, liable for the offence. It is true that the proviso to sub-section enables certain persons to prove that the offence was committed without their knowledge or that they had exercised all due diligence to prevent commission of the offence. The liability under Section 141 of the N.I. Act is sought to be fastened vicariously on a person connected with the company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. 14. It is not in dispute that the first respondent has not filed any complaint under any other provisions of the Penal Code and, therefore, the argument pertaining to the intention of the parties is completely misconceived. We were taken through the notice issued under the provisions of Section 138, reply given thereto, copy of the complaint and the order issuing process. In this regard, Mr.Mukul Rohatgi, learned senior counsel for the respondent after narrating the involvement of the appellant herein and her husband contended that they cannot be permitted to raise any objection on the ground of concealing/suppressing material facts within her knowledge. For the sa....
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....to refer some of the decisions rendered by various High Courts on this issue. 18. Learned single Judge of the Madras High Court in Devendra Pundir v. Rajendra Prasad Maurya, Proprietor, Satyamev Exports S/o. Sri Rama Shankar Maurya, 2008 Criminal Law Journal 777, following decisions of this Court, has concluded thus: "7. This Court is of the considered view that the above proposition of law laid down by the Hon'ble Apex Court in the decision cited supra is squarely applicable to the facts of the instant case. Even in this case, as already pointed out, the first accused is admittedly the sole proprietrix of the concern namely, "Kamakshi Enterprises" and as such, the question of the second accused to be vicariously held liable for the offence said to have been committed by the first accused under Section 138 of the Negotiable Instruments Act not at all arise." After saying so, learned single Judge, quashed the proceedings initiated against the petitioner therein and permitted the Judicial Magistrate to proceed and expedite the trial in respect of others. 19. In Gita Berry v. Genesis Educational Foundation, 151 (2009) DLT 155, the petitioner therein was wife and ....
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....on-in-chief of the complainant and a bare look at the cheque would show that the appellant has not signed the cheque. 23. We also hold that under Section 138 of the N.I. Act, in case of issuance of cheque from joint accounts, a joint account holder cannot be prosecuted unless the cheque has been signed by each and every person who is a joint account holder. The said principle is an exception to Section 141 of the N.I. Act which would have no application in the case on hand. The proceedings filed under Section 138 cannot be used as an arm twisting tactics to recover the amount allegedly due from the appellant. It cannot be said that the complainant has no remedy against the appellant but certainly not under Section 138. The culpability attached to dishonour of a cheque can, in no case "except in case of Section 141 of the N.I. Act" be extended to those on whose behalf the cheque is issued. This Court reiterates that it is only the drawer of the cheque who can be made an accused in any proceeding under Section 138 of the Act. Even the High Court has specifically recorded the stand of the appellant that she was not the signatory of the cheque but rejected the contention that the am....