SNS IN THE HIGH COURT OF JUDICATURE AT MUMBAI APPELLATE CRIMINAL JURISDICTION CRIMINAL APPLICATION NO.1294 OF 2010 Suresh T. Patilkhede & Ors. ...Applicants. v/s. The State & Anr. ...Respondents. Ms Sharmila Deshmukh ,adv. For the Applicants. Ms U.V.Kejriwal, APP For the Respondent No.1. Shri V.N.Tayade, adv. For the R.No.2. CORAM : J.H. BHATIA, J. DATED : MAY 5, 2011. P.C. 1 Rule. Rule made returnable forthwith. 2 Heard. The original accused persons in Criminal Case No. 6889/S/2009 pending before the J.M.F.C., Nashik for the offences punishable under Section 138 of the Negotiable Instruments Act have filed this application under Section 482 of the Cr.P.C. to quash the proceeding on the ground that no offence is made out against them. Respondent no.2, who is the original complainant has filed his affidavit- in-reply opposing the application. 3 According to the respondent no.2/Complainant, he was former president of Saksharta Prasarak Mandal, Shivaji Nagar, Baldhuni, Kalyan (E), which is registered as Co-operative Society. Applicant No.1 is present president, Applicant No.2 is Vice-President and Applicant No. - 2 - 3 is Secretary and the Applicant Nos.4 to 7 are the members of the said society. Because of the cordial relations, the complainant had advanced an amount of Rs.17.50 lac to them to run management of the society. Out of that an amount of Rs.2.50 lac was repaid in January, 2009. For repayment of Rs.7.50 lac, out of the balance amount, two cheques of Rs. 3,75,000/- each dated 3.3.2009 were issued in favour of the complainant. On first occasion when the cheques were presented for encashment, accused persons requested for some time, therefore, cheques were returned unpaid. Cheques were presented again on 5.8.2009 to the drawee bank but they were returned on the ground that the payment was stopped by the drawee. After that notice was served on each of the accused demanding payment of cheque amount but the payment was not made. In the complaint, it is contended that the accused nos.1,2 and 3 had signed cheques. However, according to the accused/applicants, cheques were not signed by the accused no.3. In the affidavit-in-reply filed on behalf of the respondent no.2, it is stated that the cheques were actually signed by the accused nos.1,2 and 6. The learned counsel for the respondent no.2/complainant also made a statement before this Court that in the complaint, mistake was committed and the complainant intends to make amendment in the complaint to the effect that cheques - 3 - were signed by the accused nos.1, 2 and 6 and not by the accused no.3. 4 The learned counsel for the complainant/respondent at the outset made a statement that she would not press this application as far as applicant nos.1, 2 and 6 are concerned because they appear to be signatories of the cheques but she insisted that the applicant nos.3,4,5 and 7 have not played any role nor they were signatories of the cheques nor the cheques were issued against the account of the society, therefore, they can not be held responsible under Section 138 of the Negotiable Instruments Act. As far as applicant no.3 is concerned, I am unable to accept her contention because he was secretary of the society. Loan was taken by the society. Even though the cheques were signed by the petitioner nos.1, 2 and 6, petitioner no.3, who was secretary and who is, as per the provisions of the Co-operative Societies Act and the Rules thereunder, expected to be responsible for the conduct of the business of the society can not escape from the liability. At this stage, it can not be accepted that the cheques were not drawn on the account of the society and that the cheques were drawn against the personal account of some members. That matter will have to be dealt with at the time of trial of the case. - 4 - 5 As far as applicant nos.4,5 and 7 are concerned, there is no allegation that they were responsible for the conduct of the business though they were members of the Managing Committee of the society. Merely because they were members of the Managing Committee, they can not be held personally responsible for the offences committed by the society unless some material is brought on record to show that they were personally responsible for conduct of the business of the society in view of the provisions of Section 141 of the Negotiable Instruments Act. Therefore, the proceedings under Section 138 of the Negotiable Instruments Act as against the accused nos.4,5 and 7 will have to be quashed. 6 For the aforesaid reasons, application is partly allowed. The proceedings in Criminal Case No. 6889/S/2009 as against the accused nos.4, 5 and 7 are hereby quashed. The trial Court shall proceed against the remaining accused persons. Rule made absolute accordingly. (J.H. BHATIA,J.) SNS IN THE HIGH COURT OF JUDICATURE AT MUMBAI APPELLATE CRIMINAL JURISDICTION CRIMINAL APPLICATION NO.1832 OF 2010 Suresh T. Patilkhede & Ors. ...Applicants. v/s. The State & Anr. ...Respondents. Ms Sharmila Deshmukh ,adv. For the Applicants. Ms U.V.Kejriwal, APP For the Respondent No.1. Shri V.N.Tayade, adv. For the R.No.2. CORAM : J.H. BHATIA, J. DATED : MAY 5, 2011. P.C. 1 Rule. Rule made returnable forthwith. 2 Heard. The original accused persons in Criminal Case No. 6889/S/2009 pending before the J.M.F.C., Nashik for the offences punishable under Section 138 of the Negotiable Instruments Act have filed this application under Section 482 of the Cr.P.C. to quash the proceeding on the ground that no offence is made out against them. Respondent no.2, who is the original complainant has filed his affidavit- in-reply opposing the application. 3 According to the respondent no.2/Complainant, he was former president of Saksharta Prasarak Mandal, Shivaji Nagar, Baldhuni, - 2 - Kalyan (E), which is registered as Co-operative Society. Applicant No.1 is present president, Applicant No.2 is Vice-President and Applicant No. 3 is Secretary and the Applicant Nos.4 to 7 are the members of the said society. Because of the cordial relations, the complainant had advanced an amount of Rs.17.50 lac to them to run management of the society. Out of that an amount of Rs.2.50 lac was repaid in January, 2009. For repayment of Rs.7.50 lac, out of the balance amount, two cheques of Rs. 3,75,000/- each dated 3.3.2009 were issued in favour of the complainant. On first occasion when the cheques were presented for encashment, accused persons requested for some time, therefore, cheques were returned unpaid. Cheques were presented again on 5.8.2009 to the drawee bank but they were returned on the ground that the payment was stopped by the drawee. After that notice was served on each of the accused demanding payment of cheque amount but the payment was not made. In the complaint, it is contended that the accused nos.1,2 and 3 had signed cheques. However, according to the accused/applicants, cheques were not signed by the accused no.3. In the affidavit-in-reply filed on behalf of the respondent no.2, it is stated that the cheques were actually signed by the accused nos.1,2 and 6. The learned counsel for the respondent no.2/complainant also made a statement before this Court - 3 - that in the complaint, mistake was committed and the complainant intends to make amendment in the complaint to the effect that cheques were signed by the accused nos.1, 2 and 6 and not by the accused no.3. 4 The learned counsel for the complainant/respondent at the outset made a statement that she would not press this application as far as applicant nos.1, 2 and 6 are concerned because they appear to be signatories of the cheques but she insisted that the applicant nos.3,4,5 and 7 have not played any role nor they were signatories of the cheques nor the cheques were issued against the account of the society, therefore, they can not be held responsible under Section 138 of the Negotiable Instruments Act. As far as applicant no.3 is concerned, I am unable to accept her contention because he was secretary of the society. Loan was taken by the society. Even though the cheques were signed by the petitioner nos.1, 2 and 6, petitioner no.3, who was secretary and who is, as per the provisions of the Co-operative Societies Act and the Rules thereunder is accepted to be responsible for the conduct of the business of the society can not escape from the liability. At this stage, it can not be expected that the cheques were not drawn on the account of the society and that the cheques were drawn against the personal account of some members. That matter will have to be dealt - 4 - with at the time of trial of the case. 5 As far as applicant nos.4,5 and 7 are concerned, there is no allegation that they were responsible for the conduct of the business though they were members of the Managing Committee of the society. Merely because they were members of the Managing Committee, they can not be held personally responsible for the offences committed by the society unless some material is brought on record to show that they were personally responsible for conduct of the business of the society in view of the provisions of Section 141 of the Negotiable Instruments Act. Therefore, the proceedings under Section 138 of the Negotiable Instruments Act as against the accused nos.4,5 and 7 will have to be quashed. 6 For the aforesaid reasons, application is partly allowed. The proceedings in Criminal Case No. 6889/S/2009 as against the accused nos.4, 5 and 7 are hereby quashed. The trial Court shall proceed against the remaining accused persons. Rule made absolute accordingly. (J.H. BHATIA,J.)