Case: N. Harihara Krishnan Vs. J. Thomas

2. M/s. Norton Granites & Spinners (P) Ltd. (hereafter NORTON) sold three parcels of land by three separate registered sale deeds dated 14.5.2007 to one M/s. Srivari Exports, a partnership firm (hereafter FIRM). The appellant herein is the managing partner of the FIRM and the respondent, it appears, is the power of attorney holder for the managing director of NORTON. It appears from the record that the appellant is also a director of a company known as M/s. Dakshin Granites Pvt. Ltd. (hereafter DAKSHIN).3. The respondent herein filed a complaint on 08.10.2012 bearing CC No. 2925 of 2012 on the file of the VII Metropolitan Magistrate, George Town at Chennai against the appellant herein invoking Sections 138 and 142 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "THE ACT"). The substance of the complaint is that the appellant herein drew a cheque bearing No. 064159 dated 10.8.2012 for a sum of Rs. 39 lakhson the Syndicate Bank, Armenian Street, Chennai in favour of the respondent. According to the complaint, the said amount of Rs. 39 lakhs is the amount due from the appellant towards the balance of the sale consideration in connection with the sale transactions referred to above.4. The said cheque was presented for collection by the respondent through his bank (Indian Bank, High Court Branch, Chennai) on 28.8.2012 which was dishonoured on the ground that the account on which the cheque was drawn had been closed.5. On 10.9.2012, the respondent issued a notice contemplated under clause (b) of the proviso to Section 138 of THE ACT. By the said notice, the appellant was informed that the cheque had been dishonored and further the appellant was called upon to pay the sum of Rs. 39 lakhs within 15 days from the date of the receipt of the notice. According to the complaint, the notice was served on the petitioner on 14.9.2012 but the petitioner neither responded to the notice nor made the payment. Hence the complaint.6. On 19.8.2015, Crl.M.P. No. 6771 of 2015 came to be filed in theCC No. 2925 of 2012 by the respondent herein purporting to be an application under Section 319 of the Code of Criminal Procedure, 1973 (for short "CrPC") with prayer asIn the above circumstances, it is therefore prayed that this Honble Court may be pleased to implead M/s DAKSHIN GRANITES PVT. LTD., NO. 3B, EEBROS Centre, 40, Montieth Road, Chennai600 008 as accused A1, in C.C. No. 2925 of 2012 pending on the file of this Honble Court and thus render justice.According to the said application, it came to the notice of the respondent during the course ofof the appellant herein at the trial of the CC No.2925 of 2012 that the cheque in question was drawn on the account of DAKSHIN and the appellant is only a signatory on behalf of the DAKSHIN in his capacity as a Director of DAKSHIN. The respondent had initially failed to lodge the complaint against DAKSHIN by inadvertence and hence the application.8. The application was contested by the appellant. The learned Metropolitan Magistrate by his Order dated 21.4.2016 allowed the said application. The petitioner carried the matter in Criminal R.C. No. 774 of 2016 to the Madras High Court unsuccessfully. Hence the instant SLP.

Court's reasoning:
Nonetheless, the respondent filed the complaint stating that the cheque in question for Rs. 39 lakhs was drawn towards the balance of the sale consideration of the transactions covered by thethree sale deeds. Prima facie, it is very doubtful whether the cheque was drawn for any amount which is legally due to the respondent from the appellant.10. A xerox copy of the cheque is placed before us. The number of the account on which the cheque was drawn is not very clear from the said copy. But from the content of the application from out of which the instant appeal arises and from the xerox copy of the cheque it appears that it was drawn on the account of DAKSHIN by somebody who claims to be a Director of DAKSHIN. It is a case of the respondent that the cheque was signed by the appellant. There appears to be some dispute regarding the identity of the person who signed the cheque. It can be seen from para 2 of the complaint, the said cheque was handed over to the respondent through "an unknown person at Chennai High Court premises".11. Assuming for the sake of argument that an amount of Rs. 39 lakhs was due towards the balance of the sale consideration of thethree sales from the FIRM of which the appellant is said to be the Managing Partner. The cheque in question was drawn by a private company (DAKSHIN) (a third party to the sale transactions and such a payment is permissible under the Indian Contract Act) and allegedly signed by the appellant in his capacity as the Director of DAKSHIN.We are of the opinion that it is difficult to understand the conclusions recorded by both the courts below. They are wholly illogical, to use a very mild expression.The question whether the respondent had sufficient cause for not filing the complaint against DAKSHIN within the period prescribed under THE ACT is not examined by either of the courts below. As rightly pointed out, the application, which is the subject matter of the instant appeal purportedly filed invoking Section 319 CrPC, is only a device by which the respondent seeks to initiate prosecution against DAKSHIN beyond the period of limitation stipulated under the Act.26. No doubt Section 142 authorises the Court to condone the delay in appropriate cases. We find no reason to condone the delay. The justification advanced by the respondent that it is during the course of the trial, the respondent realized that the cheque in question was drawn on the account of DAKSHIN is a manifestly false statement. On the face of the cheque, it is clear that it was drawn on account of DAKSHIN. Admittedly the respondent issued a notice contemplated under clause (b) of the proviso to Section 138 to DAKSHIN. The fact is recorded by the High Court. The relevant portion is already extracted in para 16.