Dismissed

Bhavesh S/O Kishorilal Dawada v. Ashoklal Madhavdas Verhani and Anr.

Bombay HC2 Apr 2013APL/7/2013

Case brief

AI extract

What is this about?

The High Court dismissed criminal applications seeking to quash process issued under Section 138 NI Act. The court held that lack of privity of contract is not a valid ground for quashing and must be raised during trial, as Section 139 creates a presumption of guilt if the cheque was for debt discharge. The complaint sufficiently established the offence.

What did the court decide?

The criminal applications for quashing the process were dismissed. All contentions regarding defence were kept open for trial.

Bhavesh S/O Kishorilal Dawada Vs Ashoklal Madhavdas Verhani… — Cheque Dishonour | Bombay HC (2013)

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APL-6-7-13.doc

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Dixit

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION

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CRIMINAL APPLICATION NO.6 OF 2013 ALONG WITH CRIMINAL APPLICATION NO.7 OF 2013

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Bhavesh Kishorilal Dawada … Applicant V/s. Ashoklal Madhavdas Verhani & Anr. … Respondents

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Mrs. D.M. Chandan for the Applicant. Mr. Vikram Chavan for Respondent No.1.

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Mr. S.S. Pednekar, A.P.P., for Respondent No.2-State.

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CORAM : S.C. DHARMADHIKARI, J. DATE : 2 ND APRIL, 2013.

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P.C. :

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These Criminal Applications have been filed under Section 482 of the Code of Criminal Procedure, 1973 to quash issuance of process on a complaint instituted by the Respondent No.1/Original Complainant alleging offences punishable under Section 138 of the Negotiable Instruments Act, 1881.

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The Respondent No.1/Original Complainant has filed a complaint against one Bhavesh Kishorbhai Dawda. It is stated that the Accused Bhavesh Kishorbhai Dawda carries on business in the name and style of Isha Teak Wood & Plywood. That the Applicant/Accused was the regular customer of the Respondent No.1/Original Complainant and used to purchase the cutting Teak Wood from the Respondent No.1/Original Complainant. In due discharge of that liability, he paid an amount by cheques and which cheques on presentation were dishonoured. The allegations in the complaint read as under:-

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APL-6-7-13.doc

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“2. The complainant submits that accused is running/conducting his business under the name and style of ISHA TEAK WOOD & PLYWOOD at the above address.

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The complainant submits that since last about one year, the accused was the regular customer of complainant and accused used to purchase the cutting Teak Wood from complainant from time to time on credit basis and accused used to pay the amount as on account and now the accused is in arrears of Rs.4,12,764/-. That accused used to place the order for supply of the goods to complainant at the above address at Ulhasnagar and further the accused used to make the payment of the goods by depositing the amount in the account of complainant which is being maintained by the complainant with Canara Bank, Ulhasnagar-4.

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The complainant submits that in the month of October, 2010, the accused came to complainant at Ulhasnagar and in order to discharge his part legitimate liability incurred curing the business transaction as referred hereinabove and in order to make part payment, have handed over two cheques bearing Nos.(1) 086035 dt. 04.10.2010 for Rs.1,00,000/- and (2) 086036 dt. 04.10.2010 for Rs.1,00,000/- drawn on AXIS Bank Ltd., HADAPSAR, PUNE – 411028 BRANCH.

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The complainant submits that at the time of handing over the above said cheques, the accused put the amount on the said cheques and signed the said cheques in presence of complainant to put the firm of complainant and date on the said cheques as 04.10.2010.”

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After the cheques were dishonoured, the Respondent No.1/Original Complainant issued the requisite Demand Notice and upon the same being not complied with, he filed the subject complaint.

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The argument of Mrs. Chandan, learned Counsel appearing for the Applicant/Accused, is that there is a public document, namely, a Certificate issued under the Bombay Shops and Establishment Act, 1948 in a requisite form stating that the business of Isha Ply Teak Wood & Plywood is conducted and carried on by Smt. Narmadaben Kishorbhai Dawda, who is the mother of the Applicant/Accused. The Applicant has nothing to do with the said business

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APL-6-7-13.doc

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and had no dealings with the Respondent No.1/Original Complainant. Reliance is also placed on Exhibit-B to this Criminal Application which states that the cheques were lost and if anybody presents them for payment, the payment should not be made. This is a Stop Payment Advise issued by the present Applicant/Accused.

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The submission is that if the drawer has issued the cheque and if it is the drawer from whom the payment is demanded, then, the mandatory prerequisite is that even the dealings with regard to the cheques ought to be with the drawer and not with any third party. The Applicant/Accused is a third party and has no business connections and is not a sole proprietor as well. For all these reasons, the order issuing process should be quashed and set aside.

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It is not possible to accept any of these contentions. No legal precedents or rulings need to be referred to. The ingredients of Section 138 of the Negotiable Instruments Act, 1881 are clear. If the cheque is stated to have been issued in terms of what is stipulated by Section 138 of Negotiable Instruments Act, 1881 and if that is returned by the Bank as unpaid, then, the law does not require, at this stage, for the person to plead any privity of contract or business dealings or how the liability or debt has arisen or has to be discharged. All that is required is for the Court to be satisfied on reading of the complaint that a cheque has been drawn by the person on an account maintained by him with a Banker for payment of any amount of money to another person from out of that account for the discharge in whole of any debt or other liability and if it is returned unpaid by the Bank either because of the reasons set out in Section 138 of the Negotiable Instruments Act, 1881, then, such person shall be deemed to have committed an offence and shall be liable to be proceeded against and shall be liable for punishment with imprisonment.

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The presumption is in Section 139. Section 140 debars a defence. In these circumstances, whether there is any privity of contract or lack of it or

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APL-6-7-13.doc

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whether the cheques which have been issued by the Applicant were not issued by him but blank cheques of his signatures were obtained by some illegal means and those were presented for payment, are all matters which can be raised during the course of the trial. This is not a case where the Court was not satisfied that the offence has been committed prima facie on a reading of the complaint. Rather on a reading of the complaint and the paragraphs reproduced above, the Court was satisfied that not once but twice the cheques were not honoured but returned unpaid.

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In these circumstances, to my mind, the learned Magistrate did not commit any error or illegality in issuing process. The Applicant possibly has approached this Court to delay the matter and raising issues which are in the nature of his defence. All such defences, as are available and other than specified in Section 140 of the Negotiable Instruments Act, 1881, can be raised during the course of trial. Keeping open all contentions in that regard of both sides, these Criminal Applications are dismissed.

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(S.C. Dharmadhikari, J.)

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Bhavesh S/O Kishorilal Dawada v. Ashoklal Madhavdas Verhani and Anr.

Case brief

What is this about?

What did the court decide?

Bhavesh S/O Kishorilal Dawada v. Ashoklal Madhavdas Verhani and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

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