IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR WEDNESDAY, THE 3RD MARCH 2010 / 12TH PHALGUNA 1931 Crl.MC.No. 2889 of 2008() ------------------------------------- ST.974/2007 of JUDL. MAGISTRATE OF FIRST CLASS COURT, ADIMALI .................... PETITIONER/ACCUSED NO.2 ------------------------------------------ JAYA THOMAS, DIRECTOR, KAIZEN HOSPITALITY PVT.LTD., SHAN APARTMENTS, PANAMPILLY NAGAR, KOCHI. BY ADV. MR.S.RAJEEV RESPONDENTS/COMPLAINANT & STATE ------------------------------------------------------------ 1. RAJU BHASKARAN, AGED 40 YEARS, S/O.BHASKARAN, BEEPATTU VEEDU, PINDIMANA KARA, PINDIMANA, KOTHAMANGALAM. 2. STATE OF KERALA, REP. BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. R1 BY ADV. MR.P.T.JOSE. R2 BY PUBLIC PROSECUTOR MR.K.S. SIVAKUMAR. THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 03/03/2010,THE COURT ON THE SAME DAY PASSED THE FOLLOWING: rs. M.SASIDHARAN NAMBIAR,J. ------------------------------------------ CRL.M.C.NO.2889 OF 2008 ------------------------------------------ Dated 3rd March 2010 O R D E R Petitioner is the second accused in S.T.974/2007 on the file of Judicial First Class Magistrate, Adimaly taken cognizance for the offence under Section 138 of Negotiable Instruments Act on Annexure-I complaint filed by first respondent. Petition is filed under Section 482 of Code of Criminal Procedure to quash the cognizance taken against the petitioner contending that she was implicated in the complaint only on the allegation that she is the Director of first accused company Kaizen Hospitality Pvt.Ltd. She is not a signatory to the cheque and there is no allegation as provided under Section 141 Crmc 2889/08 2 of Negotiable Instruments Act that petitioner was in charge or responsible to the company for the conduct of the business of the company and therefore, continuation of the proceedings as against the petitioner is an abuse of process of the court. 2. Learned counsel appearing for the petitioner and first respondent were heard. 3. Learned counsel appearing for the second respondent argued that as is clear from Annexure-1 complaint it was the petitioner along with first accused who called the petitioner at Adimaly and issued the dishonoured cheque for Rs.75,000/- as if, it is being paid towards discharge of the liability and complaint also shows that petitioner had the intention to cheat and it is with that intention the amount was received and the Crmc 2889/08 3 cheque was also issued and later stop payment memo was issued and in such circumstances, cognizance taken cannot be quashed and in any event, it is a matter for evidence and is not to be quashed at this initial stage. 4. Annexure-1 complaint shows that it is the case of the first respondent that he was doing furniture business and first accused company had entered into an agreement with the manager of Sree Valsam Hotel, Pandalam for interior design and while the said agreement was in existence under the pretext that Rs.3,00,000/- is to be paid to first respondent, they obtained Rs.3,00,000/- and when first respondent came to know about it on several occasions they paid a total of Rs.1,90,000/- and when the balance was not paid, a complaint was filed before the police Crmc 2889/08 4 and crime No.246/2007 of South Thevara Police Station was registered under Section 420 of Indian Penal Code against petitioner and first accused. It is alleged that while the said case was under investigation, to escape from the case, first respondent was requested to settle the dispute for Rs.75,000/- and petitioner along with first accused called first respondent to Adimaly and from there cheque dated 18/7/2007 drawn in Federal bank Ltd, Willington Island Branch for Rs.75,000/- was issued to first respondent. When it was presented for encashment, it was dishonoured and notice was sent to both the petitioner and first accused and first accused sent a reply and petitioner did not sent a reply. Allegation in paragraph 5 is that first accused is the Managing Director of the company and he is Crmc 2889/08 5 responsible for the control and affairs of the company. It is further alleged that petitioner had an intention to cheat first respondent and it is with that intention the amount was borrowed and cheque was issued and stop payment memo was issued and therefore, both accused are liable for punishment for the offence under Section 138 of Negotiable Instruments Act and Section 420 of Indian Penal Code. 5. There is no case for the second respondent that petitioner is the drawer of the cheque. It is the case that first accused is the drawer of the cheque. Cheque was issued from the account of the company and it was issued by its Managing Director. Complaint only discloses that petitioner is the Director of the company. So long as petitioner is the Crmc 2889/08 6 drawer of the cheque, she can be prosecuted under Section 138 of Negotiable Instruments Act only if Section 141 of Negotiable Instruments Act is attracted. Under Section 141 to proceed against the petitioner in her capacity as Director, there should be a specific allegation that she was either in charge or was responsible for the conduct or business of the company. Such a case is conspicuously absent in Annexure-1 complaint. On the other hand, there is a specific admission in the complaint that it is the Managing Director, who is responsible for the conduct or the business of the company. In such circumstances, based on Section 141 of Negotiable Instruments Act, petitioner cannot be prosecuted for an offence under Section 138 of Negotiable Instruments Act. Evidently, complaint was filed Crmc 2889/08 7 to take cognizance for the offences not only under Section 138 of Negotiable Instruments Act but also under Section 420 of Indian Penal Code. Allegation raised in the complaint that petitioner received the amount and she had an intention to cheat first respondent and she issued stop memo are raised in support of the allegation that she committed an offence under Section 420 of Indian Penal Code and not to attract an offence under Section 138 of Negotiable Instruments Act. As there is no case that petitioner is the drawer of the cheque or that she was responsible to the business of the company, at the time when the offence was committed, continuation of the proceedings as against the petitioner is only an abuse of process of the court. Though learned counsel appearing for the first respondent submitted Crmc 2889/08 8 that petitioner had earlier filed a petition for transfer of the case from Adimaly to Ernakulam which was dismissed by this court and it is admitted that cheque was issued by the petitioner,the order of this court does not show that there was any admission that cheque was issued by the petitioner. In such circumstances, case as against petitioner can only be quashed. Petition is allowed. S.T.974/2007 on the file of Judicial First Class Magistrate, Adimaly as against second accused is quashed. M.SASIDHARAN NAMBIAR, JUDGE. uj.