Judgment:
V.R. Kingaonkar, J.
1. The group of above noted applications filed by original accused persons for quashing of criminal complaint case Under Section 482 of Criminal Procedure Code is being decided together in as much as identical questions of law and facts are involved therein:
2. The applicants are the proprietary business concern and proprietor, respectively who had certain transactions with the respondent No. 1 (Complainant). Devang Desai was husband of the applicant No. 2 and was duly authorized to issue cheques for and on behalf of the applicants. There is no dispute about the fact that he issued five cheques in question towards discharge of financial liability which the applicants were supposed to discharge. There is also no dispute about the fact that the said five cheques were dishonoured by the UCO Bank when they were presented for encashment. The UCO Bank returned the cheques to the respondent No. 1 (Complainant) with intimation that the cheques could not be honoured due to insufficiency of the funds in the account of the applicants. There is also no dispute about the fact that the cheques were issued on Bank account of the applicants.
3. The respondent No. 1 had issued demand notice in the context of the five criminal cases. That notice was replied by the applicants. The tenor of the reply was that the signatory of the cheques i.e. Devang Desai had died on 1st May 1996 before the presentation of the cheques in the Bank and as such, the cheques were no more valid instruments. It was also stated in the reply notice that the intimation was duly given to the Bank about the death of Devang Desai, yet the Bank had wrongly endorsed that the cheques could not be honoured due to insufficiency of the funds in the account.
4. The applicants seek quashing of the criminal complaint cases mainly on the ground that the cheques were no more valid one and, therefore, the dishonor of such cheques could not have incurred any criminal liability against them. They filed applications before the Metropolitan Magistrate, for discharge, which were rejected. The learned Metropolitan Magistrate held that the contention raised by the applicants could not be considered at the pre-emptory stage.
5. Heard the learned Counsel.
6. Mr. Prakash Naik, learned Counsel for the applicant submits that the respondent No. 1 was duly intimated about the death of Devang Desai, the authorized signatory of the cheques and therefore, the complaint cases should not have been initiated at all. He would submit that the intimation was given to the Bank but incorrect endorsement was made by the Bank and therefore mere dishonor of the cheques cannot be a ground to proceed with the criminal cases. He contended that the cheques became invalid in the eye of law before the date of the presentation thereof. He invited my attention to the explanation given below Section 138 of the Negotiable Instrument Act as well as 141 of the Negotiable Instrument Act. He seeks to rely on certain observations in : JT 2001 (10) SC 345 in Vinod Tanna and Anr. v. Zaheer Siddiqui and Ors. As against this, Mr. S.V. Marwadi, learned Counsel for respondent No. 1, submits that the complaint cases need not be quashed when the disputed question of facts are involved. He would point out that there is no record to indicate that the Bank was informed by the applicants about the death of said Devang Desai before presentation of the cheques in question. He contended that the cheques were issued by the authorized person for and on behalf of the applicants and therefore, the applicants are the drawers of the cheques. He seeks to rely on certain observations in 2000 ALL. MR. (Cri) 1476 in Car Mart Pvt. Ltd v. Apollow Finvest India Ltd. and Ors.
7. Clinching question is whether the cheques in question lost validity due to the death of the authorized signatory and therefore, the applicants, who are the drawers of the cheques in the eye of law, can prima facie escape the criminal liability.
8. Admittedly, the cheques were drawn on account of the applicants and there is no dispute about the fact that the applicants were liable to pay the amount shown under the cheques in question. The deceased (Devang Desai) was only authorized signatory of the cheques in question. The plain reading of Section 138 of the Negotiable Instrument Act would show that the criminal liability would arise when cheuqe is dishonoured though presented to the Bank within the period of six months from the date it was drawn or within the period of its validity, whatever is earlier. According to Mr. Naik, the expression 'Period of its validity' does imply that it was the period which could be upto the date of death of said Devang Desai. The cheques in question could not regarded as invalid instruments as on date of death of the signatory qua the payee bank unless the death was duly intimated to the bank. Take for example, that 'A' has issued a cheque and died period to presentation thereof in the Bank. No intimation about the death is given to the Bank and the amount is available in the account, the Bank is then legally bound to honour the cheuqe as and when it is presented. The cheque cannot be dishonoured unless it is communicated to the Bank that the signatory of the cheque was no more alive. Obviously, unless there is tangible evidence to infer that the Bank was duly intimated about death of said Devang Desai, prior to presentation of the cheques in question, it cannot be said that the instruments became invalid.
9. In Vinod Tanna and Anr. v. Zaheer Siddiqui and Ors in : JT 2001 (10) SC 345 (Supra), the Apex Court held that when the dishonor of the cheque was on the ground that the drawer's signature was incomplete, it would not give rise to the criminal liability Under Section 138 of the Negotiable Instrument Act. For, the dishonor of the cheque would fall outside the ambit of Section 138 of the Negotiable Instrument Act. In such a case, the cheque cannot be said to have been returned unpaid by the Bank because of insufficiency of the funds standing to the credit of the account holder or it exceeds the amount alleged to be paid. In the present case, the Bank refused to honour the cheques in question, because there was no appropriate amount at the credit of the applicants to satisfy the demanded amount shown under the cheques in question. Had the cheques been dishonoured on account of death of the authorized signatory, then probably the impact would have been something different.
10. Though the applicant No. 2 is not a signatory of the cheques in question, yet she and the applicant No. 2 are the account holders and the chqeus were issued on their accounts. In somewhat similar fact situation, this Court in Car Mart Pvt. Ltd v. Apollow Finvest India Ltd. and Ors. 2000 in ALL. MR. (Cri) 1476 held that the drawer of the cheque cannot escape the liability on the ground that the signatory of the cheque died prior to the date mentioned in the cheuqe. It is pertinent to note that herein the question whether the signatory of the cheques, died prior to the dates of the presentation of the cheques, is a disputed question of fact. The question whether the applicants gave due intimation about the death of the authorized signatory of the cheques to the Bank is also disputed question of fact. There is nothing on record to say that such prior intimation was given to the Bank soon after death of the said signatory of the cheques, namely, Devang Desai and request was made to treat the cheques in question as a invalid instruments. Considering these aspects of the matter, it is difficult to countenance the contentions raised by Mr. Naik. The applicants being drawers of the cheques in question, are prima facie liable to face the criminal prosecution. The applications are, therefore, without much merit.
11. In the result, the applications are dismissed.
12. The Trial Court shall expedite the trials of the criminal complaints.