KRISHNA BHOOPAL Vs. SANAM JHANSI DEVI

JUDGEMENT

(1.) This petition is filed to quash the complaint in CC No.494 of 1999 on the file of the Court of the III Additional Judicial First Class Magistrate, Rajahmandry, registered on a private complaint filed under Section 138 of the Negotiable Instruments Act (for short 'the Act') by the 1st respondent in connection with dishonour of a cheque for Rs.1,00,000/-.

(2.) The contention of the learned Counsel for the petitioner is that since the petitioner resigned as the Director of the Leafin Indian Limited, (the Company) on whose behalf the cheque in question was issued, and since the Certificate issued by the Registrar of Companies shows that he ceased to be the Director of the Company from 6-3-1999, and since the offence of dishonour of cheque was not completed by 6-3-1999 the proceedings against him are liable to be quashed, more so because the company is not made an accused to the proceedings. It is his contention that as per Section 141 of the Act, the Directors of a Company cannot be made liable for an offence under Section 138 of the Act in respect of the cheques issued for and on behalf of the company, unless the company also is shown as an accused. It is his contention that since the cheque that was dishonoured was issued as security, but not in discharge of a legally enforceable debt on liability, no offence under Section 138 of the Act is not made out.

(3.) The averments in the complaint disclose that petitioner and another are the whole time Directors and authorised signatories of the Company which was receiving deposits from public, and that on 18-7-1998 the 1st respondent (complainant) made a deposit of Rs.1,00,000/- for six months on 18-7-1998, for which a postdated cheque dated 17-1-1999 drawn by the petitioner and another was issued to her, as security for the due payment of the amount deposited by her on the maturity date, and that after the due date, she presented the said cheque for payment on 9-2-1999 for collection and that the bank, after having received Rs.243/- as collection charges from her, informed her that the said cheque was dishonoured, and so she sent a statutory notice on 22-2-1999 to the petitioner and the other accused demanding payment of the amount covered by the cheque, bringing to their notice about the dishonour of the cheque, and that the petitioner and another and after having received the notice on 24-2-1999, they did not either send a reply or pay the amount due and hence have committed an offence under Section 138 of the Act.