Madras High Court
S.Sivalingam vs G.Kaliyaperumal on 2 January, 2019
Author: G.Jayachandran
Bench: G.Jayachandran
Crl.O.P.No.14209 of 2019
& Crl.M.P.No.6891 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on: 20.09.2022 Pronounced on: 23.09.2022
CORAM:
THE HONOURABLE Dr. JUSTICE G.JAYACHANDRAN
Crl.O.P.No.14209 of 2019
& Crl.M.P.No.6891 of 2019
S.Sivalingam, ... Petitioner/Accused
-vs-
G.Kaliyaperumal ... Respondent/complainant
PRAYER: Criminal Original Petition is filed under Section 482 of Cr.P.C., to call
for the records in C.C.No.50 of 2019 on the file of the Judicial Magistrate Court
(Fast Track), Mayiladuthurai and quash the same.
For Petitioner : Mrs.A.L.Ganthimathi
For Respondent : Mr.S.Suresh
___________
Page No.1/10
https://www.mhc.tn.gov.in/judis
Crl.O.P.No.14209 of 2019
& Crl.M.P.No.6891 of 2019
ORDER
This Criminal Original Petition is filed to quash the private complaint filed alleging dishonour of cheque value of Rs.45,00,000/- an offence punishable under Section 138 of NI Act.
2. The gist of the complaint:
The petitioner and his family members had borrowed money from the Respondent on various dates and to discharge the due, the petitioner agreed the overall due as Rs.45 lakhs and executed an undertaking letter dated 02/01/2019 and an even dated promissory note for the said sum. To discharge the said agreed loan, the subject cheque dated 07/01/2019 drawn at Bank of Baroda, Mayiladuthurai Branch was issued. The said cheque was presented for collection on 18/01/2019 as requested by the petitioner. However, the cheque returned with endorsement memo stating “the account closed” on 15/06/2013. Informing the petitioner about the dishonour of his cheque, the respondent gave a notice dated 18/02/2019 calling upon the petitioner to pay the cheque amount or to face the legal consequences. On receipt of the notice, the petitioner sent a reply notice dated 27/03/2019 through his Advocate.
___________ Page No.2/10 https://www.mhc.tn.gov.in/judis Crl.O.P.No.14209 of 2019 & Crl.M.P.No.6891 of 2019
3. The petitioner, in his reply has stated that, he and the respondent know each other for years and used to have money transactions. The respondent being a Development Officer in LIC, used to collect blank cheques from the petitioner to pay premium for the LIC Policy. At times, instead of making payment through those cheques, he used to pay the premium in cash and retain the blank cheques. Out of trust, the petitioner allowed the respondent to do so. One such cheque given long years ago been misused by the respondent. The Current Account from which the cheque drawn became inoperative 10 years back and the account itself was closed in the year 2013. Since the cheque was not issued to discharge any liability, he need not pay the cheque amount.
4. After the receipt of the reply notice, indicating the refusal to pay the cheque amount, the criminal complaint in C.C.No.50/2019 came to be filed for action under Section 138 of NI Act. The said complaint is challenged in this petition filed under Section 482 of Cr.P.C on the following grounds:-
a). The cheque drawn from the account maintained by Best Bangalore ___________ Page No.3/10 https://www.mhc.tn.gov.in/judis Crl.O.P.No.14209 of 2019 & Crl.M.P.No.6891 of 2019 Iyengar Bakery and Sweets. The petitioner has signed the cheque as Proprietor of the said Firm. Whereas, the statutory notice as well as the complaint is filed against him as Proprietor of Mayuram Iyengar Bakery and Sweets. The complaint is against the Firm, which is not the account holder of the subject cheque.
b). Admittedly, the account was closed about 6 years prior to the date of the cheque. It is therefore obvious that the blank cheque given long back on trust been misused. The signature in the subject cheque is denied.
c). The respondent has not disclosed his wherewithal to lend a huge sum of Rs.45 lakhs. The documents like IT returns, Bank Statement of accounts not sufficient to prove the respondent's source of income or payment of loan to the petitioner or his family members.
5. The Learned Counsel appearing for the petitioner submitted that ___________ Page No.4/10 https://www.mhc.tn.gov.in/judis Crl.O.P.No.14209 of 2019 & Crl.M.P.No.6891 of 2019 the Learned Magistrate ought not to have taken cognizance of offence since the complaint is not maintainable for the reasons stated above. The complaint filed with malicious intention to harass the petitioner, hence to be quashed.
6. Per contra, the Learned Counsel appearing for the respondent/complainant submitted that the petitioner, in his reply notice, admits the issuance of cheque but only denied the circumstances under which the cheque was issued. Whereas, in the quash petition, for the reason well known, he has come forward to deny the signature in the cheque. The intention of the petitioner to cheat the respondent is made obvious by issuing a cheque of “an closed account”. The complaint is filed against the petitioner as the signatory of the cheque in his individual capacity and not in representative capacity. The principle of vicarious liability which is applicable to offences by Company as explained under section 141 of N.I Act does not apply to proprietary concern which is not a entity under law unlike a Company or Corporation registered under respective Act. The petitioner, who was earlier running a Proprietary Firm in the name and style of “Best Bangalore Iyangar Bakery and Sweets”. Subsequently, he has ___________ Page No.5/10 https://www.mhc.tn.gov.in/judis Crl.O.P.No.14209 of 2019 & Crl.M.P.No.6891 of 2019 changed the name into “Mayuram Iyengar Bakery and Sweets”. The cheque was given by the petitioner to discharge his and his family member's liability. Therefore, the complaint against him is maintainable even if the account is closed. The grounds raised in the quash petition are disputed facts which need to be tried by the trial Court for decision, hence the quash petition is liable to be dismissed.
7. The following precedents are related to quashing of the complaint:-
(i). In State of Haryana and other vs. Bhajan Lal and others reported in 1992 SCC (Cri) 426, the Honb’ble Supreme Court has observed that, criminal complaint can be quashed only if it is malicious and baseless.
(ii). In Krishnamoorthy vs. Chellammal reported in 2015 (4) SCALE 371, the Hon’ble Supreme Court has held that disputed question of fact, cannot be gone into in the quash proceedings under Section 482 Cr.P.C. In catena of judgments the Hon'ble Supreme Court as well as High Courts have consistently held that the accused cannot wriggle out from facing trial under Section 138 of Negotiable Instrument Act, 1881 by issuing a cheque drawn from the account ___________ Page No.6/10 https://www.mhc.tn.gov.in/judis Crl.O.P.No.14209 of 2019 & Crl.M.P.No.6891 of 2019 closed either prior to the date of cheque or subsequent to the date of cheque.
(iii). In Rahul Sudhakar Anantwar vs. Shivkumar Kanhiyalal Shrivastav reported in 2019 (10) SCC 203, when almost an identical case came up for consideration, the Apex Court held that, criminal complaint under Section 138 of N.I. Act for the dishonour of the cheque of the year 2013 issued from the account closed in the year 2006, filed against the signatory of the cheque Mr.Ragul Sudhakar Anantwar, though the cheque was drawn in the name of the firm ‘Synergy and Solution Incorporation’ and the account maintained by one Vipin Dhopte is maintainable and the reversal of the Trial Court judgment of acquittal by the High Court and the conviction is sustainable.
(iv). In N.Backiya Lakshmi vs. Palanivel reported in 2017 SCC OnLine Mad 24066, the Hon’ble Justice S.S.Sundar rejected the defence of ‘account closed’ in the cheque complaint case and imposed cost of Rs.5,000/- for dragging the proceedings from the year 2013 to 2017.
(v). In Nagarajan -vs- K.Murugesan reported in 2017 SCC OnLine ___________ Page No.7/10 https://www.mhc.tn.gov.in/judis Crl.O.P.No.14209 of 2019 & Crl.M.P.No.6891 of 2019 Mad 14476, the Hon’ble Justice P.N.Prakash referring Krishnamoorthy vs. Chellammal case cited supra has opined that, the closure of account is also one of the reasons for mulcting liability under Section 138 of the N.I Act, because the cheque stood dishonour when presented.
(vi). Again in P.V.Selvaraj vs. Thirupura Chits Pvt Ltd, reported in 2020 SCC OnLine Mad 8596, Hon’ble Justice G.K.Ilanthiraiyan has observed that, maintainability of complaint based on return of cheque for closure of account is a mixed question of law and fact which has to be adjudicated in the trial and not a matter for consideration by High Court exercising power under Section 482 Cr.P.C.
8. Thus, it is clear as crystal that criminal complaint under Section 138 N.I Act for issuing cheque from the account closed is maintainable. The cheque drawn from the account of a Proprietary concern, if bounced, the signatory of the cheque is liable for prosecution. The fact whether the cheque was issued for discharge of enforceable debt or whether the payee had sufficient source to lend ___________ Page No.8/10 https://www.mhc.tn.gov.in/judis Crl.O.P.No.14209 of 2019 & Crl.M.P.No.6891 of 2019 the money are all disputed facts to be pleaded and proved before the Trial Court. Hence, the petition to quash the complaint under Section 482 of Cr.P.C is not maintainable.
9. Accordingly, this Criminal Original Petition is dismissed. Consequently, connected Miscellaneous Petition is closed.
23.09.2022
Index :Yes.
Internet :Yes.
Speaking order/Non-speaking order
bsm
To,
1. The Judicial Magistrate Court (Fast Track), Mayiladuthurai. ___________ Page No.9/10 https://www.mhc.tn.gov.in/judis Crl.O.P.No.14209 of 2019 & Crl.M.P.No.6891 of 2019 Dr. G.JAYACHANDRAN. J, bsm Pre-delivery order made in Crl.O.P.No.14209 of 2019 & Crl.M.P.No.6891 of 2019 23.09.2022 ___________ Page No.10/10 https://www.mhc.tn.gov.in/judis