*THE HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU + CRIMINAL PETITION No.5740 of 2006 % 30.10.2009 # Ande Murali. ….petitioner Vs. $ The State of A.P., and another. …. Respondents !Counsel for the Petitioner: Sri M.A. Bari Counsel for Respondent No.1: Public Prosecutor Counsel for Respondent No.2: Sri Ravi Kiran Rao <Gist : >Head Note: ? Cases referred: 1. 2001 Cri.L.J. 4311 THE HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.5740 of 2006 ORDER: This Criminal Petition is filed under Section 482 of Cr.P.C. by the accused for quashing the proceedings in C.C.No.254 of 2004 on the file of the Judicial Magistrate of the First Class, Metpally, relating to the offence under Section 138 of the Negotiable Instruments Act, 1881 (in short, the Act). The complainant/second respondent filed private complaint before the Magistrate alleging that one Ande Srinivas, who is brother of the accused, borrowed Rs.1,00,000/- from him under a promissory note on 06.11.2002 and that the said Ande Srinivas failed to repay the debt in spite of demands and that therefore when Ande Srinivas was not allowed to go anywhere without making repayment of the debt, on 12.03.2004 the accused being the joint owner of the properties along with Ande Srinivas issued cheque for Rs.1,00,000/- in discharge of the promissory note debt and that the said cheque was dishonoured. It is contended by the petitioner’s counsel that since the cheque was obtained by the complainant by coercion by keeping Ande Srinivas in illegal restraint, the cheque is vitiated and is unenforceable. It is nobody’s case that there is no antecedent debt for value of the cheque issued by the accused. It is not as if the complainant has exercised coercion against the accused in order to obtain the cheque from him. The alleged coercion was against brother of the accused by name Ande Srinivas, who borrowed Rs.1,00,000/- from the complainant. In the circumstances, the accused gave the cheque in question voluntarily. Secondly it is contended by the petitioner’s counsel that in order to constitute an offence under Section 138 of the Act, the cheque should have been issued in discharge of a pre-existing debt and that there was no pre-existing debt owed by the accused to the complainant and that the alleged debt due to the complainant was owed by Ande Srinivas and that therefore dishonour of such cheque by the banker for want of sufficient funds does not attract penal liability under Section 138 of the Act. He placed reliance on decision of the Bombay High Court in Hiten Sagar vs. IMC Ltd.[1] in support of his contention. It was observed in that decision as under: “It is well settled principle of criminal law that a penal provision of a statute has to be strictly construed and if in a wider connotation it will amount to disadvantage to the accused, such a wider connotation cannot be accepted. On a reading of Section 138 of N.I. Act it is clearly spelt out that a cheque must be drawn for discharge of the liability of the drawer of the cheque. In other words if he has drawn a cheque for the discharge of the liability of another person without creating any document, it will not and it would not come under Section 138 of the N.I. Act.” I am in full agreement with the above reasoning and conclusion of the Bombay High Court. Unless the pre-existing liability was on drawer of the cheque, penal liability under Section 138 of the Act will not be attracted as against such drawer of cheque. It is contended by the second respondent’s counsel that the debt was borrowed by Ande Srinivas for the purpose of his family expenses and that the accused is one of the members of family and that therefore there is liability for the accused to repay the debt. At the same time, the accused is not eo-nomiee party to the loan document. The loan document was signed by Ande Srinivas only in his individual capacity. He did not sign on the loan document representing his family much less on behalf of any joint family consisting of himself and his brothers as manager. In those circumstances, even though it was mentioned in the loan document that the amount of Rs.1,00,000/- towards family necessities, it will not bind any other member of his family except Ande Srinivas in his individual capacity. In case the second respondent/complainant filed civil suit for recovery of money on the basis of this loan document, I am afraid that the complainant may not get a decree as against the accused because there is no privity of contract between the complainant and the accused. The complainant can maintain a civil suit only as against Ande Srinivas with whom there is privity of contract. It is not the complainant’s case that the accused stood as surety or guarantor to his brother Ande Srinivas for discharging the loan amount of Rs.1,00,000/-. Except the cheque in question, there is absolutely no other document executed by the accused in favour of the complainant binding himself to repay the debt borrowed by his brother Ande Srinivas. In those circumstances, I have absolutely no hesitation to conclude that even if the cheque issued by the accused in favour of the complainant is true, the accused will not be liable penally for the offence under Section 138 of the Act in spite of the cheque issued by the accused was dishonoured by his banker for want of sufficient funds. In that view of the matter, the complainant could not make out the offence under Section 138 of the Act as against the petitioner/accused for dishonour of cheque issued by him. In the result, this Criminal Petition is allowed quashing the proceedings in C.C.No.254 of 2004 on the file of the Judicial Magistrate of the First Class, Metpally. _______________________________ SAMUDRALA GOVINDA RAJULU, J 30th October, 2009 Note: LR copy to be marked. (B/o) GHN [1] 2001 Cri.L.J. 4311