Petitioner sought to quash summons under Section 482 Cr.P.C. challenging prosecution under Section 138 NI Act. Court held petitioner could not be proceeded against as she was not a signatory on cheques and no statutory notice was issued to her, per Alka Khandu Avhad. Petition allowed.
Petition allowed; summoning order dated 02.12.2019 set aside.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 16.01.2024
+ CRL.M.C. 169/2023 and CRL.M.A. 682/2023 (stay)
SMT MAYA TYAGI ..... Petitioner Through: Mr. Manoj Kumar Tyagi, Mr.Sandeep Tyagi and Mr. Shekhar Tyagi, Advocates (M:9811108413). Versus MR. SIMMER SAHNI ..... Respondent Through: Mr. Rajan Sabharwal, Mr. Shashwat Pratyush, Advocates.
CORAM: HON'BLE MR. JUSTICE MANOJ KUMAR OHRI
JUDGMENT (ORAL)
CRL.M.C. 169/2023 Page 1 of 5 Digitally Signed By:MANOJ
Signature Not Verified
Digitally Signed By:MANOJ KUMAR OHRI Signing Date:01.02.2024 12:53:03
Memorandum of Understanding ( ‘MoU’ ) dated 23.07.2019 was executed between the parties for cancellation of the Agreement to Sell. In pursuance of the same, two cheques bearing No.119788 and 119789 each for a sum of Rs.27,50,000/- (thereby totalling Rs.55,00,000/-) dated 01.08.2019 drawn on Canara Bank, Shahpur Nij Morta, Ghaziabad Branch were issued in favour of the respondent. The said cheques, when presented for encashment, were dishonoured with the remarks ‘payment stopped by drawer’ vide return memo dated 26.09.2019.
Signature Not Verified
CRL.M.C. 169/2023 Page 2 of 5 Digitally Signed By:MANOJ
Digitally Signed By:MANOJ KUMAR OHRI Signing Date:01.02.2024 12:53:03
“i) that the cheque is drawn by a person and on an account maintained by him with a banker;
ii) for the payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability; and
iii) the said cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account.”
CRL.M.C. 169/2023 Page 3 of 5 Digitally Signed By:MANOJ
Signature Not Verified
Digitally Signed By:MANOJ KUMAR OHRI Signing Date:01.02.2024 12:53:03
been issued any statutory notice and not called upon to make good the payment covered under the cheque, cannot be proceeded against in the criminal complaint.1 The learned MM erred in satisfying himself with this basic prerequisite before issuing summons. The proceedings are also liable to be quashed on the ground that the impugned cheques, copy of which have been placed on record, were signed only by Mr. Gagandeep Tyagi, and as such, the petitioner is not the signatory of the subject cheques. Even the account from which the cheques were issued was also not a joint account.
“xxx
10. Therefore, a person who is the signatory to the cheque and the cheque is drawn by that person on an account maintained by him and the cheque has been issued for the discharge, in whole or in part, of any debt or other liability and the said cheque has been returned by the bank unpaid, such person can be said to have committed an offence. Section 138 of the NI 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 NI 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.
xxx”
1 M/s Laxmi Dyechem v. State of Gujarat & Ors., (2012) 13 SCC 375
Signature Not Verified
CRL.M.C. 169/2023 Page 4 of 5 Digitally Signed By:MANOJ
Digitally Signed By:MANOJ KUMAR OHRI Signing Date:01.02.2024 12:53:03
petitioner is clearly an abuse of process of law and the same is liable to be quashed and set aside. Consequently, the present petition is allowed and the summoning order is set aside.
MANOJ KUMAR OHRI (JUDGE)
JANUARY 16, 2024/ na
2 (2021) 4 SCC 675
Signature Not Verified
CRL.M.C. 169/2023 Page 5 of 5 Digitally Signed By:MANOJ
Digitally Signed By:MANOJ KUMAR OHRI Signing Date:01.02.2024 12:53:03
3 issues framed by the court
Whether the High Court can quash a summons order under Section 482 Cr.P.C. read with Article 226/227 when a cheque was not endorsed by the petitioner and no demand notice was issued to her.
Whether a person who is not a signatory to the cheque and did not receive a statutory demand notice can be prosecuted under Section 138 of the Negotiable Instruments Act.
Whether the criminal proceedings against the petitioner were liable to be quashed as an abuse of process of law due to lack of jurisdiction over the accused.
Colour shows how this judgement treated each authority
Laxmi Dyechem v. State of GujaratReferred¶35
1 M/s Laxmi Dyechem v. State of Gujarat & Ors., (2012) 13 SCC 375 · Who else cites this
Alka Khandu Avhad v. Amar Syamprasad Mishra & Anr.Applied¶30
(2021) 4 SCC 675 · Who else cites this
6 provisions across 4 enactments
Smt Maya Tyagi
Mr. Simmer Sahni
Manoj Kumar Ohri
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
