The Single Bench of the Delhi High Court in the case of Manmohan Patnaik vs Cisco Systems Capital India Pvt. Ltd & Ors. consisting of Justice Anup Jairam Bhambhani expounds that merely being a signatory to a cheque does not, in and of itself, make a person guilty of the offence u/s 138 of the Negotiable Instruments Act.
Facts
By way of this petition u/s 482 of CrPC, the petitioner impugned the summoning order dated 19.09.2019 made by the learned Metropolitan Magistrate in C.C. No. 17370/2018 under section 138 of the Negotiable Instruments Act, 1881 (‘NI Act’).
Contentions Made
Petitioner: It was contended that though the petitioner was one of the signatories to the cheques that are the subject of the criminal complaint, they were post-dated for 30.07.2018 and 30.08.3018 and issued on behalf of M/s. Ortel Communication Ltd./respondent No. 2, where the petitioner was engaged as Chief Technology Officer. But, when the subject cheques were presented for encashment and returned for insufficient monies on 25.10.2018, the petitioner had retired more than 9 months earlier. Further, along with the criminal complaint, complainant/respondent No.1 filed the List of Signatories of respondent No.2 company, which did not include the petitioner's name.
Observations of the Court
The Bench noted that the genesis of an offence u/s 138 of the NI Act is the "return" of a cheque by a bank "unpaid," inter alia for insufficient money in the account on which the cheque is written. The provision also stipulated certain pre-conditions that must be met before the offence is considered to be committed, including the issuance of a written notice of demand for payment to the drawer of the cheque within 30 days of the cheque being returned unpaid by the bank; and giving the drawer at least 15 days from the date of receipt of notice to make such payment. It also noted that section 141 of the NI Act states if the person committing the offence under section 138 was a company, every person in charge of the company's activities at the time of the offence shall be punished accordingly:
“Clearly, therefore, on a prima facie view, merely being a signatory to a cheque does not, in and of itself, make a person guilty of the offence under section 138 of the NI Act. The offence is triggered at the stage when a cheque is returned unpaid by the bank inter-alia for insufficiency of funds. For guilt to be imputed to an officer of a company, at the very least, the officer should have been responsible for the business and affairs of the company and for honouring the cheque on the date that the cheque was returned unpaid.”
In this case, it opined, the deeming provision contained in section 141 NI Act would not apply to the petitioner, since he was no longer in charge of the affairs of the respondent company on the date that the offence defined in section 138 was committed.
Judgment
The Bench concluded that further proceedings insofar as they concerned the petitioner, were stayed, until further orders. This suit was to be re-notify on 29th March 2023.
Case: Manmohan Patnaik vs Cisco Systems Capital India Pvt. Ltd & Ors.
Citation: CRL.M.C. 6461/2022 & CRL. M.A. No.25177/2022
Bench: Justice Anup Jairam Bhambhani
Decided on: 2nd December 2022
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