TaxTMI 
TaxTMI 
2022 (9) TMI 671
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....nafter referred to as "the respondent no 2) has filed a complaint under section 138 of the Negotiable Instruments Act, 1881 titled as Atamjit Singh V Amrit Sandhu Coster & another bearing CC No.6437 of 2017 on allegations that the petitioner (arrayed as the accused no 2 in complaint)and her sister namely Amrit Sandhu Coster (arrayed as the accused no 1 in complaint and is petitioner in Crl. M.C. bearing no 556/2019) issued a cheque bearing no. 329623 dated 06.03.2017 amounting to Rs 20,00,000.00 (Rupees Twenty Lacs Only) drawn on Syndicate Bank, Branch West Punjabi Bagh, Central Market, New Delhi-110026 (hereinafter referred to as "the cheque in question:) towards discharge the their liability as detailed in complaint. The respondent no 2 presented said cheque for encashment on 06.04.2017 at HDFC Bank, Branch G.K.-l but was dishonored due to "Payment Stopped by Drawer" as intimated vide return memo dated 11.04.2017. The petitioner and Amrit Sandhu Coster did not pay cheque amount despite notice dated 10.05.2017. The respondent being aggrieved filed the present complaint. 3. The trial court vide impugned order summoned the petitioner and Amrit Sandhu Coster. The impugned order is....
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....s not disclose any cause of action against the petitioner. There is no legally enforceable debt against the petitioner. The petitioner never issued nor directed her sister, Amrit Sandhu Coster to issue cheque in question in favour of the respondent no 2. The respondent no 2 by impleading the petitioner only wanted to coerce Amrit Sandhu Coster to settle criminal case filed against the respondent no 2. 5. The petitioner challenged impugned order on the grounds that present complaint is perverse and does not disclose any lawful liability or debt towards the petitioner. The petitioner is not the drawer of the cheque in question. The trial court misdirected itself while passing the impugned order. The petitioner is not a joint account holder or vicariously liable with Amrit Sandhu Coster. The cheque in question was not issued by the petitioner but was issued by the sister of the petitioner namely Amrit Sandhu Coster. It was prayed that impugned order be set aside. 6. Section 138 of the Negotiable Instruments Act, 1881 deals with dishonour of cheque. It reads as under:- 138 Dishonour of cheque for insufficiency, etc., of funds in the account. -Where any cheque drawn by a ....
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....ng to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank; (iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; (v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice. The Supreme Court in Jugesh Sehgal V Shamsher Singh Gogi, (2009) 14 SCC 683 observed that above ingredients being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act. 8. The counsel for the petitioner argued that the trial court committed a grave error while passing the impugned order as the petitioner is not the drawer and signatory of the cheque in question. The account from which cheque....
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....ity regarding dishonouring of cheque can be fastened on the drawer of it. 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 also held that 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. 11. The Supreme Court in Aparna A. Shah V M/s Sheth Developers Pvt. Ltd. &another, Criminal Appeal No 813 of 2013 decided on 01st July, 2013 endorsed views expressed by the Madras, Delhi and Punjab & Haryana High Courts and held that it is only the drawer of the cheque who can be prosecuted under section 138 of the Act. It was held as under:- 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 13....
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....7. On a fair reading of Section 138 of the NI Act, before a person can be prosecuted, the following conditions are required to be satisfied: i) that the cheque is drawn by a person and on an account maintained by him with a banker; ii) for the payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability; and iii) the said cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account. Therefore, a person who is the signatory to the cheque and the cheque is drawn by that person on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned by the bank unpaid, such person can be said to have committed an offence. Section 138 of the NI Act does not speak about the joint liability. Even in case of a joint liability, in case of individual persons, a person other than a person who has drawn the cheque on an ....
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....) Subject to the provisions of this Chapter, any Magistrate of the first class, and any Magistrate of the second class specially empowered in this behalf under Sub-section (2), may take cognizance of any offence- (a) upon receiving a complaint of facts which constitute such offence; (b) upon a police report of such facts; (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed. 14. Cognizance is a stage when a Magistrate applies his mind to the suspected commission of an offence. The magistrate has to apply his mind to the facts stated in the police report or complaint before taking cognizance for coming to the conclusion that there is sufficient material to proceed with the case. It cannot be taken in a mechanical or cryptic manner. It is not only against the settled judicial norms but also reflects lack of application of judicial mind to the facts of the case. However a Magistrate is not required to consider the defense of the proposed accused or to evaluate the merits of the material collected during investigation at time of taking cognizance. It is not necessary to p....