Allowed

Mr Srinidhi Chinnam v. K B Yarriswamy

Karnataka HC4 Sept 2024CRL.P/937/2023

Case brief

AI extract

What is this about?

A criminal petition filed under Section 482 Cr.P.C. to quash proceedings for cheque dishonour and cheating was allowed. The court quashed the case against the petitioner, holding that he was not a signatory to the cheques and there was no privity of contract, making continuation an abuse of the process of law.

What did the court decide?

Criminal Petition allowed; proceedings in C.C. No. 2957 of 2022 quashed qua the petitioner.

Mr Srinidhi Chinnam Vs K B Yarriswamy — Cheque Dishonour | Karnataka HC (2024)

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NC: 2024:KHC:36220 CRL.P No. 937 of 2023

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4^TH DAY OF SEPTEMBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE M.NAGAPRASANNA

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CRIMINAL PETITION NO. 937 OF 2023

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BETWEEN:

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MR. SRINIDHI CHINNAM S/O MR.SRINIVAS CHINNAM AGED ABOUT 22 YEARS R/O NO.24, NEAR MAHAVEER VIDYA MANDIR, BEML NAGARA, SRIRAMPURA MYSURU – 570 023.

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AMENDMENT CARRIED OUT AS PER ORDER DATED 15.02.2023

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…PETITIONER

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(BY SMT.LENITA MATHIAS, ADVOCATE)

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Digitally signed by KAVYA G Location: High Court of Karnataka

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AND:

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K.B.YARRISWAMY S/O K.T.BHARATHESH AGRICULTURIST AND BUSINESS AGED ABOUT 35 YEARS R/O CHIKKAGONDANAHALLI VILLAGE CHITRADURGA (TQ) AND (DI).

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…RESPONDENT

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C.,(528 OF BNSS) PRAYING TO QUASHING THE PROCEEDINGS IN C.C.NO.2957/2022 ON THE FILE OF THE III ADDL. CIVIL JUDGE AND JMFC COURT, CHITRADURGA VIDE ANNEXURE-G.

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NC: 2024:KHC:36220 CRL.P No. 937 of 2023

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA

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ORAL ORDER

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The petitioner is before this Court calling in question the proceedings in C.C.No.2957 of 2022 registered for offences punishable under Section 138 of the Negotiable Instruments Act and Section 420 of the IPC.

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The respondent though served on 10-04-2023, had remained unrepresented even today. Therefore, learned counsel Smt Lenita Mathias appearing for petitioner is heard.

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The petitioner is the accused and respondent, the complainant. An alleged transaction is projected by the complainant contending that the petitioner had availed of certain financial assistance at Rs.2 lakhs and had issued 2 cheques in favour of the respondent-complainant. The cheques having been dishonoured has led the complainant to the Court of the learned Magistrate invoking Section 200 of the Cr.P.C.

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3 - NC: 2024:KHC:36220 CRL.P No. 937 of 2023

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for offence punishable under Section 138 of the N.I. Act and 420 of the IPC. The concerned Court takes cognizance, registers criminal case for offence punishable under Section 138 of the N.I. Act and Section 420 of the IPC. The registration of the crime and issuance of summons to the petitioner has driven the petitioner to this Court in the subject petition.

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Learned counsel appearing for the petitioner would vehemently contend that the petitioner was a student at the relevant point in time pursuing his MBBS at Subbaiah Institute of Medical Sciences, Shimoga. Learned counsel would further submit that he has only one bank account at the Karnataka Bank, who also have issued an endorsement that there is no cheque issued by the petitioner, that could be withdrawn at Karnataka Bank. She would further contend that there is no privity of contract between the petitioner or the respondent, as

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the petitioner is not even aware of what business the respondent would run, for him to enter into a transaction or seek financial assistance from his hands.

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4 - NC: 2024:KHC:36220 CRL.P No. 937 of 2023

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As observed hereinabove, the complainant remains unrepresented. The afore-narrated facts are not in dispute. What is projected is an alleged transaction. The transaction is, receipt of an amount of Rs.2 lakhs by the petitioner and the petitioner issuing 2 cheques. The petitioner who is said to be pursuing medicine at Subbaiah Institute of Medical Sciences is aged 22 years. There are no dots in the complaint that can connect the complainant to the petitioner. There being no ingredients, permitting further proceedings to continue against the petitioner would become an abuse of the process of the law.

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As contended by the learned counsel for petitioner, the petitioner is said to have been caught in the cross fire between the cheques being issued by someone else, as admittedly, the petitioner is not the signatory to the cheques so issued. The petitioner appears to have been drawn into the web of proceedings under the N.I. Act without any rhyme or reason. It becomes apposite to refer to the judgment of the Apex Court in the case of ALKA KHANDU AVHAD V. AMAR SYAMPRASAD

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NC: 2024:KHC:36220 CRL.P No. 937 of 2023

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MISHRA¹ , wherein the Apex Court at paragraphs 9 and 10 holds as follows:

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“9. On a fair reading of Section 138 of the NI Act, before a person can be prosecuted, the following conditions are required to be satisfied:

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9.1. That the cheque is drawn by a person and on an account maintained by him with a banker.

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9.2. 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.

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9.3. 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.

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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.”

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1 (2021)4 SCC 675

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NC: 2024:KHC:36220 CRL.P No. 937 of 2023

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In the light of the fact that the petitioner not being a signatory

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to the cheques, the offences so alleged either under Section 138 of the N.I. Act or under Section 420 of the IPC would not arise. The issue stands answered by the Apex Court in the aforesaid judgment of ALKA KHANDU AVHAD .

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For the aforesaid reasons, the following:

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ORDER

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(i) Criminal Petition is allowed.

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(ii) Impugned proceedings in C.C.No.2957 of 2022 pending on the file of III Additional Civil Judge and JMFC, Chitradurga stands quashed qua the petitioner.

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Sd/-

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(M.NAGAPRASANNA) JUDGE

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bkp List No.: 1 Sl No.: 86

Mr Srinidhi Chinnam v. K B Yarriswamy

Case brief

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Mr Srinidhi Chinnam v. K B Yarriswamy

Case brief

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