Alka Khandu Avhad v. Amar Syamprasad Mishra & Anr

DATE OF JUDGMENT: 8th March, 2021.
 

JUDGES: M.R. Shah, D.Y. Chandrachud.
 

PARTIES: Alka Khandu Avhad (Appellant)
Amar Syamprasad Mishra & Anr. (Respondent).
 

SUMMARY: The following case deals with the issue of whether or not a person can be convicted under the provisions of Sec. 138 of the Negotiable Instruments Act when he owes payment to another jointly with someone else. The case also deals with the issue of applicability of the provisions of Sec. 141 of the Negotiable Instruments Act.

OVERVIEW

1. In this case, the original complainant, a lawyer, raised a professional bill for the legal work done by him to represent a couple in the legal proceedings. The cheque issued by the husband got dishonored. The lawyer filed a complaint against both the accused – husband and wife for the offence punishable under Section 138 of the Negotiable Instruments Act.
2. .According to the complainant, it was the joint liability of both the accused to pay the professional bill as the original complainant represented both the accused.
3. The accused wife approached the High Court through a writ petition under Art. 226 of the Constitution seeking to quash the criminal complaint filed against her mainly on the ground that she was neither a signatory to the cheque dishonored nor there was a joint bank account.
4. This petition was dismissed by the High Court.
5. Feeling aggrieved and dissatisfied with the decision of the High Court, the accused persons filed a petition against the decision.
6. The matter is now before the Supreme Court.

ISSUES

The following were the issues analyzed by the Supreme Court:

• Whether or not the provisions of Sec. 141 of the Negotiable Instruments Act is applicable against the accused.
• Whether or not a person can be convicted under the provisions of Sec. 138 of the Negotiable Instruments Act when he owes payment to another jointly with someone else.

IMPORTANT PROVISIONS

• Sec. 138 of Negotiable Instruments Act: Dishonor of cheque for insufficiency of funds in the account.
• Sec. 141 of Negotiable Instruments Act: Offences by companies under Sec. 138 of Negotiable Instruments Act.

ANALYSIS OF THE JUDGMENT

1. The counsel for the appellants submitted that the dishonored cheque was issued by her husband and not the appellant and even the account in question was not a joint account and that the appellant was neither the signatory to the cheque nor the cheque was drawn from the bank account of the appellant and therefore the appellant cannot be prosecuted for the offence punishable under Section 138 of the Negotiable Instruments Act.
2. He also argued that the ingredients of Section 138 of the Negotiable Instruments Act are not satisfied, and therefore, the High Court should have quashed the criminal complaint against the appellant.
3. The counsel for the appellant further submitted before the court that in the facts and circumstances of the case, even Section 141 of the Negotiable Instruments Act shall not be applicable as the cheque was issued by a private individual.
4. The counsel for the complainant rejected the contention made by the appellant on the grounds that the liability to pay the debt towards the professional bill was the joint liability of both the accused as the complainant represented both the accused and, therefore, as rightly observed and held by the High Court, Section 141 of the Act shall be applicable.
5. The counsel for the complainant further submitted that when the Trial Court issued the summons against the appellant for the offence punishable under Section 138 r/w Section 141 of the Negotiable Instruments Act after having come to the conclusion that a prima facie case has been made out, the High Court has rightly refused to quash the criminal complaint and quashed the petition of the appellant in the High Court.
6. It is further submitted by the counsel for the complainant that as the cheque was issued towards discharge of legal liability of both the accused and thereafter when her husband issued the cheque, the High Court has rightly refused to quash the complaint.
7. The court, on hearing both contentions, ruled in favor of the appellants. The court rejected the contention of the complainant that the complaint against the appellant is maintainable as the cheque was issued towards discharge of legal liability of both the accused.
8. With regards to the applicability of Sec. 141 of the act, the court held that there was no question of invoking Section 141 of the Act against the appellant, as the liability is the individual liability, but cannot be said to be the offence committed by a company or by a corporate or firm or other associations of individuals. The appellant, as per the observation of the court, is neither a Director nor a partner in any firm who has issued the cheque.

CONCLUSION

The main issue that this case deals with is whether or not a person can be convicted under the provisions of Sec. 138 of the Negotiable Instruments Act when he owes payment to another jointly with someone else. The court ruled in the negative in the present case.

Section 138 of the 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 account maintained by him cannot be prosecuted for the offence under Section 138 of the Act. A person might have been jointly liable to pay the debt, but if such a person who might have been liable to pay the debt jointly, cannot be prosecuted unless the bank account is jointly maintained and that he was a signatory to the cheque.

With regards to the applicability of Sec. 141 of the Act, which talks about offences committed by companies under Sec. 138, the court held that there was no question of invoking Section 141 of the Act against the appellant, as the liability is the individual liability, but cannot be said to be the offence committed by a company or by a corporate or firm or other associations of individuals. The appellant, as per the observation of the court, is neither a Director nor a partner in any firm who has issued the cheque.

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