Crl.L.P./704/2005 of PADMINI AMMA. K Vs A.CHANDRAMATHI on 5 December 2005

ORDER

The petitioner seeks to grant leave for filing an appeal againstthe order of acquittal for offence under Section 138 of theNegotiable Instruments Act (for short, `the Act'). As per thecomplaint filed by the petitioner before the trial court, the firstrespondent-accused borrowed a sum of Rs.4 lakhs on 8.12.1995 andanother amount of Rs.4 lakhs on 12.12.1996 and issued a chequefor Rs.8 lakhs drawn on Canara Bank, South Bazar, Kannur to thecomplainant. The cheque when presented for encashment wasreturned dishonoured with an endorsement `funds insufficient'.When a registered notice was sent for which no reply was sent by thefirst respondent and no amount was also paid. Hence, complaint wasfiled alleging that the first respondent committed offence underSection 138 of the Act.

2. The compliant was originally filed by oneSri.E.M.Balakrishnan Nair. In the cause title of the complaint, onePadmini Amma, W/o.E.M.Balakrishnan Nair is shown as thecomplainant. Under what circumstances, she was inducted into the

complaint is not seen discussed anywhere. A reading of Section 138of the Act would go to show that a person will be liable foroffence under Section 138 of the Act only if he draws a cheque on anaccount maintained by him with a banker for payment of anyamount or money to another person from out of the account for thedischarge of any debt or liability etc. The case of the complainantappears to be, as revealed from the complaint, that the cheque wasdrawn by first respondent in her personal capacity from her ownaccount. At the time of evidence, it was brought out in cross-examination of PW1, the son of the original complainant, (who,according to learned counsel for petitioner is no more ) that the chequeis drawn by the Managing Partner of Anandakrishna Bus Service andthat the cheque was issued by the partnership firm. It is also revealedfrom the evidence given in cross-examination that the amount wasborrowed on behalf of the firm. A perusal of the copy of cheque alsoshows that the same was drawn on the account maintained by thepartnership firm. Learned counsel for the petitioner would submit thatthe account was also that of the firm. In such circumstances, theoffence under Section 138 of the Act is deemed to have beencommitted by the firm and not by first respondent in her personalcapacity.

3. However, there is absolutely no whisper in the compliantthat the offence was committed by the firm. It is not stated in thecompliant that the cheque was drawn by the firm from the account

maintained by the firm. What is stated therein is that the accusedissued a cheque, The accused referred to in the cause title is as“Managing Partner, Anandakrishna Bus Service”. But there isabsolutely nothing in the complaint to show that the firm hascommitted the offence. The evidence goes to show that the liabilityis of the firm and the person who committed the offence is a firm. Inthe above circumstances, in the absence of sufficient materials in thecomplaint to show that an offence is committed by the firm, firstrespondent cannot be made liable for offence committed by the firm.

4. This is particularly so in the light of Section 141 of the Act.Unless the complaint discloses that an offence is committed by acompany no person on behalf of the company can be made liable forthe said evidence. A person can be made an accused by virtue ofSection 141 of the Act in which a complainant can establish that suchperson was in charge of and responsible to the firm in the conduct ofits business at the time when the cheque was drawn. There isabsolutely no case for the complainant that the first respondent northe firm committed the offence and the first respondent was theperson responsible and in charge of the firm at the time when thecheque was drawn.

5. Learned counsel for petitioner submitted that there is nolegal bar in launching complaint against a person who has drawn thecheque and an offence under Section 138 will lie against a person inpersonal capacity. It was submitted that it is the person, who issued

the cheque, is liable for offence under Section 138 of the Act. I amunable to accept this argument for more than one reason. The Sectionitself is very clear on this aspect. As per section 138, it is notsufficient if a cheque is drawn by a person but the cheque must bedrawn from the account maintained by that person with a banker.

6. If any person draws a cheque by filling up a cheque andsigning the same sends to another person, even if it is for discharge alegally enforceable debt, unless complainant can establish thatthe person who issued the cheque has drawn the cheque on an accountmaintained by him with a banker, no offence will lie against suchperson. In this case, though the cheque was signed by firstrespondent, even if the entire allegations are accepted, the accountwas maintained not by first respondent in his personal capacity but itwas maintained by a firm.

7. Though it is not necessary that the firm is made an accusedor is impleaded as accused in the cause title, there must be allegationsin the complaint that the firm has committed an offence. Theliability of the partners of the firm arises only if, as per the allegationsin the complaint, the company has committed an offence. As long assuch allegations are not there, no person, even if he has signed thecheque of a firm, and he has drawn a cheque on an account maintainedby him such a person cannot be made liable for offence underSection 138 of the Act. There must be allegations to show that thefirm has committed the offence for making partners liable for

offence under Section 138 of the Act. In the light of Section 141, theliability of the partners arise only if the firm has committed anoffence, going by the language of Section 138 of the Act.

8. Learned counsel appearing for petitioner relied upon adecision reported in Babu v. Suresh [2004(2) KLT 83] andcontended whether the cheque issued by a person or firm or not theperson who has drawn the cheque is liable for offence under Section138. A complaint can be launched against the person who has drawnthe cheque whether in his capacity as proprietor or in his personalcapacity. On a reading of the said decision, I find that it was a casewhere cheque was issued by a proprietor of a proprietary concernand not a firm. Proprietory concern is not covered by Section 141of the Act and hence the said dictum laid down in the said decision isapplicable to the facts of this case. In this case, as per the evidence ,cheque was drawn by a firm and the cheque was signed by theManaging Partners of a firm, which is purported to be covered bySection 141 of the Act.

In the above circumstances, there is absolutely no groundfor interference. Special Leave is therefore rejected. Petition isdismissed.

krs.

K. HEMA, JUDGE.