Allowed

Smt Asha P Shetty v. Smt K Rupa

Karnataka HC1 Jul 2021WP/25890/2018

Case brief

AI extract

What is this about?

The High Court allowed four writ petitions by a petitioner challenging proceedings for prosecution under Section 138 of the Negotiable Instruments Act. The petitioner was arrayed as an accused but was neither the drawer of the cheques nor the signatory. The court held that since she lacks privity to the cheques, the proceedings were unsustainable.

What did the court decide?

The writ petitions were allowed and the Criminal Court proceedings against the petitioner were quashed.

Smt Asha P Shetty Vs Smt K Rupa — Cheque Dishonour | Karnataka HC (2021)

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W.P.No.25892/2018 c/w W.P.Nos.25890/2018, 1 25891/2018, 27417/2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 1^ST DAY OF JULY 2021

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BEFORE

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THE HON’BLE MRS. JUSTICE K.S.MUDAGAL

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WRIT PETITION NO. 25892/2018 (GM RES) C/W WRIT PETITION Nos.25890/2018, 25891/2018, 27417/2018 (GM RES)

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BETWEEN :

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SMT ASHA P. SHETTY W/O PRAKASH SHETTY AGED ABOUT 50 YEARS R/AT NO.9, “ASHA” ALI ASKAR CROSS ROAD OFF CUNNINGHAM ROAD BENGALURU – 560 052

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… PETITIONER (COMMON)

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(BY SMT. LATHA S. SHETTY, ADV.)

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AND :

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SMT K. RUPA W/O GURU PRASAD AGED ABOUT 43 YEARS NO.1586, 2^ND STAGE, 6^TH MAIN E-BLOCK, RAJAJINAGAR BENGALURU-560 010

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M/S MAGNUM PROPERTY DEVELOPERS AND HOME FINANCE GROUP NO.198/6, F5, BSR ARCADE, 1^ST FLOOR GANDHI BAZAR MAIN ROAD ABOVE COFFEE DAY BASAVANAGUDI BENGALURU-560 004 REP. BY ITS MANAGING DIRECTOR

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W.P.No.25892/2018 c/w W.P.Nos.25890/2018, 2 25891/2018, 27417/2018

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SRI ROSHAN B. SHETTY MAJOR MANAGING DIRECTOR OF MAGNUM PROPERTY DEVELOPERS AND HOME FINANCE GROUP NO.198/6, F5, BSR ARCADE, 1^ST FLOOR GANDHI BAZAR MAIN ROAD ABOVE COFFEE DAY BASAVANAGUDI, BENGALURU-560 004

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SMT DAYA ROSHAN B. SHETTY MAJOR MANAGING PARTNER OF MAGNUM PROPERTY DEVELOPERS AND HOME FINANCE GROUP NO.198/6, F5, BSR ARCADE, 1^ST FLOOR GANDHI BAZAR MAIN ROAD ABOVE COFFEE DAY BASAVANAGUDI, BENGALURU-560 004 …RESPONDENTS

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(COMMON)

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(BY SRI. K.GURUDHATTA, ADV. FOR R1; R2, R3 AND R4 ARE SERVED)

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WRIT PETITION NO.25892/2018 IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF CR.P.C. PRAYING TO QUASH THE COMPLAINT IN C.C.NO.1516/2018 IN P.C.R.NO.13432/2016 DATED 09.12.2016 FILED BY THE 1^ST RESPONDENT HEREIN, BEFORE THE HON’BLE XIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU (ANNEXURE-A) AND QUASH THE ORDER DATED 22.03.2018 PASSED BY THE HON’BLE IV ADDITIONAL AND XXX CHIEF METROPOLITAN MAGISTRATE, BENGALURU IN C.C.NO.1516/2018 IN P.C.R.NO.13432/2016 WHEREBY TAKING COGNIZANCE OF THE COMPLAINT FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT (ANNEXURE-B) ETC.

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WRIT PETITION NO.25890/2018 IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF CR.P.C. PRAYING TO QUASH THE COMPLAINT IN C.C.NO.1519/2018 IN P.C.R.NO.9683/2016

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W.P.No.25892/2018 c/w W.P.Nos.25890/2018, 25891/2018, 27417/2018

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DATED 07.09.2016 FILED BY THE 1ST RESPONDENT HEREIN, BEFORE THE HON’BLE XIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU (ANNEXURE-A) AND QUASH THE ORDER DATED 22.03.2018 PASSED BY THE HON’BLE IV ADDITIONAL AND XXX CHIEF METROPOLITAN MAGISTRATE, BENGALURU IN C.C.NO.1519/2018 IN P.C.R.NO.9683/2016 WHEREBY TAKING COGNIZANCE OF THE COMPLAINT FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT (ANNEXURE-B) ETC.

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WRIT PETITION NO.25891/2018 IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF CR.P.C. PRAYING TO QUASH THE COMPLAINT IN C.C.NO.2001/2018 IN P.C.R.NO.10867/2016 DATED 28.09.2016 FILED BY THE 1^ST RESPONDENT HEREIN, BEFORE THE HON’BLE XIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU (ANNEXURE-A) AND QUASH THE ORDER DATED 19.04.2018 PASSED BY THE HON’BLE IV ADDITIONAL AND XXX CHIEF METROPOLITAN MAGISTRATE, BENGALURU IN C.C.NO.2001/2018 IN P.C.R.NO.10867/2016 WHEREBY TAKING COGNIZANCE OF THE COMPLAINT FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT (ANNEXURE-B) ETC.

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WRIT PETITION NO.27417/2018 IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF CR.P.C. PRAYING TO QUASH THE COMPLAINT IN C.C.NO.1174/2018 IN P.C.R.NO.12125/2016 DATED 03.11.2016 FILED BY THE 1^ST RESPONDENT HEREIN, BEFORE THE HON’BLE XIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU (ANNEXURE-A) AND QUASH THE ORDER DATED 27.02.2018 PASSED BY THE HON’BLE IV ADDITIONAL AND XXX CHIEF METROPOLITAN MAGISTRATE, BENGALURU IN C.C.NO.1174/2018 IN P.C.R.NO.12125/2016 WHEREBY TAKING COGNIZANCE OF THE COMPLAINT FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT (ANNEXURE-B) ETC.

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THESE WRIT PETITIONS COMING ON FOR PRELIMINARY HEARING ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:

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W.P.No.25892/2018 c/w W.P.Nos.25890/2018, 4 25891/2018, 27417/2018

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COMMON ORDER

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Since the parties to these cases are common and common questions of law and facts are involved, they are taken up together for disposal by common order.

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These petitions arise out of in the below mentioned proceedings in which respondent No.2 sought to prosecute the petitioner along with respondent Nos.2 to 4 for the offence punishable under Section 138 of the Negotiable Instruments Act.

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Sl. No.	W.P.No.	C.C.No.	P.C.R. No.	Date of order
1	25892/2018	1516/2018	13432/2016	22.03.2018
2	25890/2018	1519/2018	9683/2016	22.03.2018
3	25891/2018	2001/2018	10867/2016	19.04.2018
4	27417/2018	1174/2018	12125/2016	27.02.2018

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The petitioner was arrayed in the above said cases as accused No.4. Respondent Nos.2 to 4 were accused Nos.1 to 3 in the said cases. For the purpose of convenience, the parties will be referred to henceforth with their ranks before the Trial Court.

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W.P.No.25892/2018 c/w W.P.Nos.25890/2018, 5 25891/2018, 27417/2018

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In those complaints, the complainant’s case was as follows:

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That on the prompting of the accused, she entered into an agreement of sale with them in respect of site No.121 carved out of Survey No.99 for a consideration of Rs.20,60,000/-. Agreement of sale was executed on 30.06.2011. As part of sale consideration, she paid in all Rs.15,50,000/-, but the accused failed to execute the sale deed as agreed by them. Ultimately, she came to know that the accused have sold the property to third parties. When she insisted for the amount paid towards sale consideration, the accused issued the following cheques.

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Sl. No.	W.P.No.	Cheque No.	Sum	Drawer
1	25892/2018	000151	Rs.5,00,000/-
2	25890/2018	000156	Rs.2,00,000/-	Roshan Shetty (A2)
3	25891/2018	000157	Rs.2,00,000/-
4	27417/2018	000158	Rs.2,00,000/-

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When these cheques were presented, they were returned with an endorsement “funds insufficient”. The

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W.P.No.25892/2018 c/w W.P.Nos.25890/2018, 6 25891/2018, 27417/2018

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complainant got issued statutory notices calling upon the accused to pay the cheque amount which they failed to do. Therefore, she seeks their prosecution for the offence punishable under Section 138 of the Negotiable Instruments Act.

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The petitioner/accused No.4 seeks quashing of the aforesaid proceedings on the ground that she is neither the drawer of the cheque nor signatory to the cheque, therefore, the Trial Court was not justified in taking cognizance of the offence against her.

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The language of Section 138 of the Negotiable Instruments Act itself makes it clear that a person who draws the cheque is liable for prosecution for the offence under the said Section. Admittedly, in these cases accused No.4 was neither the drawer of the Cheque nor the cheques pertain to her account. she is only the owner of the site intended to be purchased by the complainant and signatory to the agreement of sale. Therefore, apparently she is not liable for the

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W.P.No.25892/2018 c/w W.P.Nos.25890/2018, 7 25891/2018, 27417/2018

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prosecution for the offence under Section 138 of the Negotiable Instruments Act.

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Regarding the same transaction in all eight cheques were issued. Regarding the other cheques, C.C.Nos.14361/2016 and 14363/2016 were initiated against the petitioner. She filed Crl.P.Nos.7249/2016 c/w 7250/2016 seeking quashing of those proceedings.

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This Court vide order Annexure-C dated 26.07.2017 quashed the said proceedings on the ground that she is not the drawer of the cheques. These matters are covered by the said judgments. Therefore, the petitions are allowed. The proceedings in C.C.Nos.14361/2016 and 14363/2016 against the petitioners are hereby quashed.

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At this stage, learned counsel for respondent No.1 seeks liberty to cite the petitioner as the witness in the impugned proceedings. Liberty is reserved to the complainant to do so.

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Sd/JUDGE

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KG

Smt Asha P Shetty v. Smt K Rupa

Case brief

What is this about?

What did the court decide?

Smt Asha P Shetty v. Smt K Rupa

Case brief

What is this about?

What did the court decide?

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