Allowed

Miss. Karishma P Shah v. M/S. Bindu Ventures

Karnataka HC10 Apr 2023CRL.P/5142/2018

Case brief

AI extract

What is this about?

Petitioner challenged a criminal case under Section 138 of the Negotiable Instruments Act instituted against her for a cheque drawn by her father. The High Court held that only the drawer of the cheque can be punished under Section 138, set aside proceedings against the petitioner, and allowed prosecution to continue against the father.

What did the court decide?

Impugned prosecution against the petitioner set aside; proceedings against other accused No.2 to continue.

Miss. Karishma P Shah Vs M/S. Bindu Ventures — Cheque Dishonour | Karnataka HC (2023)

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CRL.P No. 5142 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 10^TH DAY OF APRIL, 2023

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BEFORE

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THE HON'BLE MR JUSTICE R. NATARAJ

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CRIMINAL PETITION NO. 5142 OF 2018

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BETWEEN:

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MISS. KARISHMA P SHAH, D/O MR. PARESH S SHAH, CHARTERED ACCOUNTANT BY PROFESSION, RESIDING AT NO.29, SHARDA COLONY, 7^TH B MAIN, 3^RD STAGE, 4^TH BLOCK, BASAWESHWARANAGAR, BANGALORE-560079.

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…PETITIONER (BY SRI. AJAY KADKOL T, ADVOCATE AND SRI DILRAJ ROHIT SEQUIRA, ADVOCATE)

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AND:

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Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA

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M/S. BINDU VENTURES, A PARTNERSHIP FIRM, HAVING ITS OFFICE AT 4^TH FLOOR, BINDU GALAXY, NO.2, 1^ST MAIN, INDUSTRIAL TOWN, RAJAJINAGAR, WOC ROAD, BANGALORE-560010, REPRESENTED BY ITS MANAGING PARTNER, MR JAYESH Z SHAH, AGED ABOUT 46 YEARS.

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…RESPONDENT

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THIS CRL.P IS FILED U/S. 482 PRAYING TO QUASH THE ENTIRE CASE IN CONNECTION WITH C.C.NO.11251/2018 FOR THE OFFENCE P/U/S 138 OF N.I. ACT PENDING ON THE FILE OF XLII ADDL. C.M.M., BENGALURU.

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THIS PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:

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CRL.P No. 5142 of 2018

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ORDER

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The petitioner has challenged the order dated 21.04.2018 passed by the XLII ACMM, Bangalore in C.C.No.11251/2018, taking cognizance of the offences punishable under Section 138 of Negotiable Instrument Act, 1881 (for short hereinafter referred to as 'NI Act') and issuing process to her.

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The respondent herein initiated prosecution of the petitioner and two others for an offence punishable under Section 138 of NI Act. It was contended in the private complaint that the petitioner is the daughter of accused No.2 and both of them were practicing as Chartered Accountants at Paresh S Shah & Company. All the accused approached the respondent for purchase of an office premises at No.303, III floor of Bindu Galaxy Commercial complex, Rajajinagar, Bengaluru - 560 010. After negotiation, the sale price was fixed at Rs.86,25,000/-. The petitioner and her father requested the respondent to execute a sale deed for Rs.41,00,000/- and accordingly a sale deed was prepared for the said amount so as to save the stamp duty. The petitioner and her father had agreed to pay the full price of Rs.86,25,000/-, though what was

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CRL.P No. 5142 of 2018

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shown in the sale deed was Rs.41,00,000/-. In order to gain confidence, he alleged that a sum of Rs.16,25,000/- was paid through cheques between 08.09.2017 till 11.12.2017 and thereafter, a sale deed was executed by receiving the balance amount of Rs.39,00,000/-. As on the date of the execution of sale i.e., on 20.12.2017 the respondent claimed that the accused were in arrears of Rs.31,00,000/- which had to be paid to complete the transaction.

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The respondent alleged that towards the said balance, the petitioner and her father sent Rs.6,00,000/through RTGS from the account of Smt.Virali K. Shah and towards payment of balance amount of Rs.25,00,000/-, the father of the petitioner representing Paresh S Shah & Company issued a cheque for Rs.25,00,000/- dated 01.03.2018 drawn on Bank of India, Bangalore branch which was dishonoured as the cheque "exceeded arrangements". Therefore, the respondent claimed that both the accused including the petitioner were guilty for the offence punishable under Section 138 of NI Act and consequently issued a notice of demand to both the accused. Since the accused failed to repay the amount the proceedings under Section 138 of NI Act was filed.

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CRL.P No. 5142 of 2018

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The sworn statement of the respondent was recorded where he stated that the sale deed was executed in favour of the petitioner and the cheque in question was drawn by the accused No.2 and the said cheque was drawn from the firm namely Paresh S. Shah & Company. The petitioner therefore challenged the proceedings initiated against her on the ground that she was not the drawer of the cheque and it was her father/accused No.2 who had drawn the cheque and therefore, the proceeding initiated under Section 138 of NI Act is not maintainable against her.

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The respondent is absent, though he was served with the notice of this petition.

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I have considered the submissions made by the

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learned counsel appearing for the petitioner.

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Section 138 of Negotiable Instruments Act reads as

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follows:

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" 138 Dishonour of cheque for insufficiency, etc., of funds in the account. —Where any cheque drawn by a 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

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CRL.P No. 5142 of 2018

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discharge, in whole or in part, of any debt or other liability, 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 by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless—

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(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

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(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

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CRL.P No. 5142 of 2018

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(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

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A perusal of the above, discloses that an offence

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can only be made against the drawer of the cheque and none else. If the accused No.2 had taken the responsibility of discharging the liability of the petitioner then it is he alone who can be proceeded against and not the petitioner. The trial Court without looking into the aforesaid, has blindly taken cognizance of the matter against the petitioner.

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In that view of the matter, the petition is allowed .

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The impugned prosecution against the petitioner is set aside.

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However, the proceedings against other accused No.2 shall continue. Since the complaint is filed in the year 2018, the trial Court is directed to expedite the proceedings, at any rate within a period of one year from the date of receipt of certified copy of this order.

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Sd/JUDGE

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GVP

Miss. Karishma P Shah v. M/S. Bindu Ventures

Case brief

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Miss. Karishma P Shah v. M/S. Bindu Ventures

Case brief

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