2021 (7) TMI 1041

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....ondent, three security cheques, which were non-MICR cheques (non-CTS-2010 cheques) were issued by A-1 in the year 2010. There arose certain disputes between A-1 company and the respondent, in relation to payment of some commission to A-1, which resulted in the presentment of one of the non-MICR cheques by the respondent in the year 2015, which was returned by the bank as the same was non-CTS-2010 compliant and against the same, the present complaint was filed by the respondent u/s. 138 of the Negotiable Instruments Act, which has been taken cognizance of by the trial court and aggrieved by the same, the present petition has been filed for quashment of the same. 3. Mr. N.R. Elango, learned senior counsel appearing for the petitioner submitted that the trial court has wholly misdirected itself in entertaining the complaint for the very simple reason that initially on and from 31.12.2012, Reserve Bank of India had instructed all the banks to recall all the non-MICR cheques from its customers and replace the same with CTS-2010 cheques, which was subsequently extended upto 31.07.2013. That being the case, the case of the petitioner being that the cheques, three in number, were issued....

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....hat the cheque has been returned not due to insufficiency of funds in the account, but on account of the cheque being invalid, due to the same being non-CTS-2010 compliant and, therefore, the A-1 and A-2 cannot be fastened with any criminal liability towards the dishonour of the cheque. 7. It is the further submission of the learned senior counsel that the cheque had been given as security in the year 2010 and the same has been deposited only in the year 2015 and in view of the gap of five years in the deposit of the cheque, the limitation comes into play and the cheque is not enforceable as the same is barred by limitation. 8. It is the further submission of the learned senior counsel that insofar as petitioners 3 and 4 are concerned, who are arrayed as A-3 and A-4, they are only non-executive directors of the company, who are not involved in the day-to-day affairs of the company and, therefore, implicating them in the offence is wholly unsustainable. Further, they are also not signatories to the cheque. Therefore, he prays for quashment of the case registered against the petitioners. 9. Per contra, learned counsel appearing for the respondent submitted that even accordin....

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....e sustained. Even the petition reveals that petitioners 3 and 4 have been shown only as Directors of the 1st petitioner company. Except for an averment by the respondent in the complaint that petitioners 3 and 4 are also jointly and severally liable to be proceeded with, with regard to the dishonour of the cheque, however, no tangible material has been placed by the respondent to show that petitioners 3 and 4 were also actively involved in the day-to-day affairs of the company and were also involved in all the business affairs between the 1st petitioner company and the respondent. There is no whisper in the complaint as to the said aspect. There is also no other material in the form of any documents, which has emanated from petitioners 3 to 4 to the respondent, to show that petitioners 3 and 4 were working directors and were involved in the regular working of the 1st petitioner company. Petitioners 3 and 4 being mere Directors of the company, but not involved actively in the day-to-day affairs of the company, cannot be implicated to the mere fancies of the respondent. In absence of any material to substantiate the same, the stand of the respondent in the complaint that petitioners ....

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....circular issued by Reserve Bank of India provides that all residual non-CTS-2010 cheques with customers will continue to be valid and accepted in clearing houses (including the Cheque Truncation System (CTS) Centres) for another four months up to July 31, 2013, subject to a review in June, 2013. From the said clause it is evident that validity is given till 31.7.2013, which is subject to review. However, no material is placed on record to show the actual decision taken by the Reserve Bank of India as to the validity of the cheques, which are non-CTS-2010 complaint. That being the case, the petitioners are bound to establish the validity or otherwise of the cheque by adducing oral and documentary evidence during trial and at this point of time, it would not be prudent for this Court to render one finding or the other as to the validity of the cheque, in the absence of any substantial material voicing any particular view with regard to the same. 18. Further, it is to be pointed out that the cheque, which finds place in the typed set of documents along with the return report of the bank, in no way shows as to whether the said cheque is a non-CTS-2010 cheque or a CTS-2010 cheque. Th....