LAWS(KAR)-2002-1-39

DEVEERAMMA Vs. SHIVALINGAPPA

Decided On January 11, 2002
DEVEERAMMA Appellant
V/S
SHIVA LINGAPPA Respondents

JUDGEMENT

(1.) THE petitioners have sought for quashing of the proceedings in C. C. No. 424 of 2001 (P. C. R. No. 66 of 2000), "pending on the file of the judicial Magistrate First Class, Davanagere, taking cognizance for the offence under Section 138 of the Negotiable Instruments Act, 1881 (in short "the Act" ).

(2.) THE main contention of the petitioners is that they are only the directors of M/s. Vinuta Homeopatic Medical Educational Association. Davanagere, and in no way concerned with the issue of the cheque and that the custodians are only accused 1 and 2, therefore, they cannot be made liable. Accordingly, they pray to quash the proceedings. On the other hand, the learned Counsel for the respondent submits that whether the petitioners, in the capacity as Directors or not, are not liable to pay the loan amount is purely a matter of evidence and, therefore, the proceedings cannot be quashed at the initial stage. In support of his contention, he also relied on the decision in Maruti Udyog Limited v Narender and Others, wherein it is clearly held that "the proceedings cannot be quashed at the initial stage". Therefore, he prayed to dismiss the petition.

(3.) FROM the pleadings and also from the contention of the learned counsel for the petitioners, it clearly goes to show that the complainant advanced a loan amount of Us. 12,00,000/- for which a cheque was issued by accused 1 and 2. It is no doubt true that the present petitioners are only the Directors of M/s. Vinuta Homeopatic Medical Educational Association, Davanagere. But, the question that has to be examined whether the Directors are also liable to pay the said loan amount or not is purely a matter of evidence. That apart, whether the petitioners have consented for taking up the loan amount has also to be examined and in case if the Magistrate were to find that the liability is joint and several, the petitioners have to be held liable. Therefore, at the initial stage, the proceedings cannot be quashed. However, the liberty is granted to the petitioners to take all such legal contentions before the Trial Court.