- Bookmark
- Share
- CaseIQ
Gita Berry Petitioner v. Genesis Educational Foundation
Factual and Procedural Background
This petition under Section 482 of the Code of Criminal Procedure, 1973, was filed seeking quashing of Complaint No. 431/1/06 titled ‘Genesis Educational Foundation v. Rajesh Berry & Anr’ under Section 138 of the Negotiable Instrument Act, 1881. The complaint arose from a dishonoured cheque dated 20th January 2006, drawn on a joint account held with United Western Bank Limited by Shri Rajesh Berry, husband of the petitioner, in favour of the complainant for Rs. 6,75,00,000/-. The petitioner contended that she was a joint account holder but had neither drawn nor issued the cheque, thus the complaint against her was not maintainable.
Legal Issues Presented
- Whether the offence under Section 138 of the Negotiable Instrument Act can be made out against a joint account holder who did not draw or issue the cheque in question.
- Whether mere status as a joint account holder imposes liability under Section 138 of the Act.
- Interpretation of the term "person" under Section 138 in the context of joint accounts and its applicability to individual co-holders.
Arguments of the Parties
Petitioner’s Arguments
- The offence under Section 138 cannot be said to be made out against the petitioner solely because she was a joint account holder.
- She neither drew nor issued the cheque in question.
- The wording of Section 138 requires that the cheque must be drawn by the accused person, which was not the case here.
- This is not a case involving a company where Section 141 of the Act would apply.
- The complaint lacks specific averments implicating the petitioner in the issuance of the cheque.
Complainant’s Arguments
- Section 11 of the Indian Penal Code supports the interpretation that "person" in Section 138 contemplates a plurality of persons, thus joint account holders can be held liable.
- The joint account was operated by both the petitioner and her husband, with the petitioner being the main account holder as per a bank certificate.
- Reliance on Madhya Pradesh High Court judgment in Ajit v. Smt. Kirti holding joint account holders equally liable under Section 138 even if they did not draw the cheque.
- The complaint refers generally to the accused and imputes knowledge of the transactions to both the petitioner and her husband.
- Cross-examination did not establish that the petitioner was not responsible for the cheque.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Ajit v. Smt. Kirti (2005) Banking Cases 315 | Joint account holders are equally liable under Section 138 of the Negotiable Instrument Act notwithstanding that such person did not draw the cheque. | The Court considered this precedent but distinguished it on facts, noting that the cheque in the present case did not bear the name of the petitioner or her husband, unlike the precedent where the cheque had printed names of both joint holders. |
Court's Reasoning and Analysis
The Court analyzed the statutory language of Section 138 of the Negotiable Instrument Act, emphasizing that the offence requires that the cheque must be drawn by the accused person. It was undisputed that the cheque was issued and signed solely by Mr. Rajesh Berry. The Court noted the absence of any seal, authorization, or indication that the cheque was issued on behalf of a group or registered body. Although the account was joint, there was no specific averment or material implicating the petitioner in the issuance of the cheque. The Court distinguished the cited precedent, Ajit v. Smt. Kirti, as in that case the cheque bore the names of both joint holders, which was not so here. The Court found that the complaint did not prima facie establish a case against the petitioner under Section 138. The Court also observed that the complaint was not under Section 420 IPC, thus the general nature of the transactions was less relevant. The Court limited its examination to the prima facie material and did not delve into the merits, leaving that to the trial court.
Holding and Implications
The petition is allowed and the complaint No. 431/1/06 under Section 138 of the Negotiable Instrument Act is quashed insofar as it relates to the petitioner.
This decision directly relieves the petitioner from the allegations under Section 138 based on the facts that she neither drew nor issued the cheque despite being a joint account holder. No broader precedent was established, and the decision is confined to the facts of this case. The complaint against the petitioner is dismissed, while the case against other accused may proceed.
Dr. S. Muralidhar, J. (Open Court):— This is a petition under Section 482 of the Code of Criminal Procedure, 1973 (‘Crl. PC’) filed by the petitioner seeking quashing of the Complaint No. 431/1/06 titled as ‘Genesis Educational Foundation v. Rajesh Berry & Anr.’ under Section 138 of the Negotiable Instrument Act, 1881 (‘Act’).
2. The complaint sterns from a dishonoured cheque dated 20th January, 2006 drawn on the United Western Bank Limited by Shri Rajesh Berry, husband of the petitioner in favour of the complainant Genesis Educational Foundation in the sum of Rs. 6,75,00,000/-. The case of the petitioner is that the offence under Section 138 of the Act cannot be said to have been made out against the petitioner only on the ground that she was a joint account holder along with her husband. She has admittedly neither drawn nor issued the cheque in question and therefore the complaint against her was not maintainable.
3. The petitioner further refers to the wording of Section 138 of the Act to contend that the drawing of the cheque by a person is an essential ingredient of the offence. He submits that this is not a case of an offence having been committed by a company to which Section 141 of the Act would apply.
4. Learned counsel for the complainant has been heard at great length. He refers to Section 11 of the Indian Penal Code (‘IPC’) to contend that a word “person” in Section 138 of the Act contemplates ‘a plurality of persons.’ In this case since the account is a joint account and contemplates the accused both the petitioner as well as her husband operating it. He refers to a certificate dated 28th August, 2006 issued by the United Western Bank Limited to indicate that the account initially was in the name of the petitioner here and subsequently the name of her husband was added. On the strength of this document, it is submitted on behalf of the complainant that in fact it is the petitioner here who is the main account holder. Reliance is also placed upon a judgment of the Madhya Pradesh High Court in Ajit v. Smt. Kirti 1 (2005) Banking Cases 315 in which it has been held that a joint account holder will be equally liable for an offence under Section 138 of the Act notwithstanding that such person did not draw the cheque in question which was dishonoured.
5. Both the learned counsel for the parties have referred extensively to several paragraphs of the complaint in support of their respective stands. According to the petitioner, the entire thrust of the complaint is only with regard to Mr. Rajesh Berry, husband of the petitioner and not the petitioner here. Reference is, in particular, made to paragraphs 6 and 12 to contend that there is no specific averment vis-a-vis the petitioner here. On the other hand learned counsel for the complainant read the complaint which refers to the accused generally and imputes to them knowledge of the transactions in question to both of them.
6. In the first place there are certain facts which are not disputed. The cheque in question which stood dishonoured, was issued under the signature of Mr. Rajesh Berry. There is no seal of any group or association of persons or any registered body on behalf of whom Mr. Rajesh Berry was authorized to sign the said cheque. It is not dispute that the account was a joint account with the United Western Bank Limited. The relevant paragraph of the complaint pertaining to the issuance of cheque in question reads as under:
“12. The accused pursuant to receiving the above said notice, approached the complainant society on or around 18th January, 2006 to settle the matter by offering Rs. 6,75,00,000/- as full and final settlement towards the above said land. Although the value of the land was much higher than what was offered by the accused, however, as the accused assured the complainant society that the said amount of Rs. 6,75,00,000/- would be paid at once, therefore, the complainant society accepted the said offer. The accused accordingly issued a Cheque No. 357431 dated 20.01.2006 drawn on United Western Bank Limited, Alied Bhavan, 9, L.S.C Madangir, New Delhi-110062 for the total amount of Rs. 6,75,00,000/-. The above said cheque was handed over to the Secretary of the complainant society by the accused on 19th January, 2006 itself with full assurance that the said cheque would be duly honoured on presentation. Copy of the said cheque is annexed hereto and marked as Annexure P-8.”
7. A reading of the above paragraph to show that reference is really made to Rajesh Berry who alone has admittedly issued the cheque in question. Although there are paragraphs an ulterior to these paragraphs in the complaint to indicate that both the accused were possibly involved in the negotiations that took place earlier to the issuance of the cheque, there is no specific averment whether the petitioner here, i.e, Smt. Gita Berry herself was involved in the issuance of cheque in question which got dishonoured.
8. It requires to be recalled that the complaint is only under Section 138 of the Act and not under Section 420 IPC. In the latter, it may be relevant to examine the general nature of the transactions. However, when it comes to the offence under Section 138 of the Act the wording of the statute does not admit of any lose interpretation to accommodate the situation such as the present one. The wording is to the following effect “where any cheque drawn by a person on an account with a banker for payment of any amount of money . . ” Then “such person” shall be deemed to have committed the offence.
9. The Madhya Pradesh High Court had in Ajit v. Smt. Kirti dealt with the case where a cheque issued by the husband and in the printed cheque the name of his wife was also printed as both were having a joint account. The mere factor in determining whether the intention was that the joint account is operated by a person that one takes the liability of the other when such cheque is issued by anyone. Admittedly in the instant case the cheque in question does not have even bear the name of either of the accused and that definitely will not name the present petitioner.
10. A reference was made by learned counsel for the complainant to the cross-examination of the complainant in the trial court and it was contended that nothing was elicited from the complainant to the effect that the petitioner was nowhere responsible for the cheque in question. This Court finds that the stand taken by the accused in the learned trial court was that the accused No. 1 issued a blank cheque and misused by the complainant. Without entering into the merits of the controversy, since that will ultimately be decided by the learned trial court, this fact is being noticed to the limited extent of examining the stand of the petitioner that she was nowhere involved in the issuance of the cheque in question.
11. On a perusal of the records and the complaint in particular, this Court finds that the complaint filed by the complainant does not prima facie make out a case against the petitioner here under Section 138 of the Act. No material has been brought out to substantiate the case under Section 138 of the Act against the petitioner.
12. For the above reasons, the petition is allowed and the complaint No. 431/1/06 under Section 138 of the Act in so far as the petitioner is concerned is hereby quashed.
13. The petition stands disposed of.
14. A copy of order be given dasti to learned counsel for the parties.
Alert