WP2241-09.sxw jpc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION WRIT PETITION NO. 2241 OF 2009 1. Jaswanti Jagdish Karia B-204, Aum Darshan Apartment Shankar Lane, Kandivali(W) Mumbai 400 067 2. Piyush Jagdish Karia B-903, Nova Apartment, Telli Galli, Andheri (E), Mumbai 3. Pramod M. Karia, A-12-3, Surya Apartment, Bhulabhai Desai Road, Opp. Brach Candi Hospital, Mumbai 400 026 .. Petitioners Versus 1. Ravindra M. Karia (HUF) Bharti Niketan Building, Ground Floor, Katula Nehru Cross Road No.2 Kandivali9West), Mumbai 400 067 2. The Stae of Maharashtra .. Respondents Mr. M. G. Shukla i/by M/s Shruti Desai and Co. for the petitioners Ms. Shweta Bhangale a/w Mr. Ravindra Karia i/by Mulla & Mulla & CBC for Respondent No.1 Mr. V. B. Konde Deshmukh APP for Respondent No.2 CORAM : J.H. BHATIA, J. DATE : 26th April, 2011. P.C.: 1. Rule. Rule made returnable forthwith. 2. Heard learned counsel for the parties. 3. Respondent no.1 is complainant and the petitioners are 1 WP2241-09.sxw accused Nos. 1 to 3 respectively in Criminal Case No. 2301788/SS/2009 under section 138 of the Negotiable Instruments Act. 4. The accused persons have challenged issuance of process against them. The complaint reveals that as a family settlement, certain share certificates were handed over to Escrow Agent- Arvind Sonde. He released those share certificates worth Rs.1.36 crore in favour of Vijay P. Karia, who is son of petitioner No.3. This release was not as per the family arrangement and settlement. When the complainant went to collect the amount of Rs.1.36 crores, he came to know that Vijay Karia had handed over two post dated cheques to Arvind Sonde. Those two cheques were handed over to the complainant. Both the cheques were against the joint account of accused nos. 1 and 2 and were signed by both of them. They issued the cheques on behalf of a Hindu Undivided Family, of which accused No. 3 is the head. Both the cheques, on presentation to the drawee bank for encashment, were returned unpaid with the remarks "stopped payment". In spite of service of statutory notice, the accused persons failed to make payment. It resulted into filing of complaint under section 138 of the Negotiable Instruments Act. 5. Learned counsel for the petitioners contended that the complainant had also to fulfill certain obligations under the 2 WP2241-09.sxw settlement and as he had failed to fulfill those obligations, the cheque were not honoured. However, this is the defence of the accused which can be looked into at the time of trial and not in this petition. 6. Admittedly, the cheques were signed only by accused nos. 1 and 2 and not by accused no.3 - Pramod M. Karya. Accused Nos. 1 and 2 are wife and son of Jagdish Karya who is brother of accused no.3. Though they all are the members of a joint family, still the cheques were drawn by the accused no.1 and 2 only. Under section 138, either the individual who has drawn the cheque will be responsible, if the cheque is dishonoured and if he fails to make the payment after service of statutory notice, or in case, the offence is committed by the company, the company itself as well as every person, who, at the time of the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, shall be deemed to be guilty of the offence. 'Company' is defined in the explanation (a) to section 141 of the N.I. Act and it means any body corporate and includes a firm or other association of individuals. 7. Admittedly the accused nos. 1 to 3 do not form a body corporate registered under the Companies Act or a Firm, registered under the Partnership Act or an Association of 3 WP2241-09.sxw Individuals, registered under the Societies Act, the Public Trusts Act or any other such laws. Therefore, they do not come within the meaning of the company and in view of this, accused no. 3, who was not the signatory of the cheque and who had not drawn the cheque, cannot be prima facie held guilty for the offence under section 138 of the N.I. Act. Therefore, to that extent, the issuance of process cannot be supported. However, prima facie, I find nothing wrong with issuance of process against accused Nos. 1 and 2. 8. For the aforesaid reason, the petition is partly allowed. The impugned order issuing process against accused nos. 3 stand quashed and set aside. However, the case shall proceed against accused Nos. 1 and 2. 9. Rule made absolute accordingly. ( J.H. BHATIA, J. ) 4