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Aparna A.Shah v/s Sheth Developers Pvt. Ltd (2013) 8 SCC71

  • The respondent in this case, M/s Sheth Developers Pvt. Ltd., is a firm that was established in accordance with the requirements of the Companies Act, 1956. The appellant for this case, Aparna A. Shah, and her husband, Ashish Shah, are land developers and aggregators in the respective industry for the past 15 years and are the owners of several acres of land in Maharashtra.
  • The appellant claims that in 2008, in the month of January, the appellant and her husband were introduced to the company by a person named Virender, who was a dealer in the company thriving a Township formation & Special Economic Zone "SEZ" forming in Maharashtra.
  • Mrs. Aparna A. Shah claimed that the land in dispute was perfect in establishment for the formation of the Township. Additionally, it was said that they were seeking for a suitable individual who was enthusiastic about jointly developing the area with them.
  • M/s Sheth Developers, assented for the advancement of the expressed land to be development together with the appealing party for this situation and her significant other in the wake of trusting the previously mentioned explanations. The litigant and her significant other assented to allow the respondent-Company to see the title papers relating to the expected land with respect to the commission of a sum of twenty-five crores (Indian Rupees) with the comprehension that the said aggregate would be repaid on the off chance that the venture did not appear.
  • M/S Sheth Developers Pvt. Ltd. gave a check amounting to twenty-five crores (Indian rupees) for the litigant for this and her significant other after the two players consented to the terms. The expected joint endeavor, nonetheless, did not go through for various reasons, and the litigant for this situation asserts that everything of Rs. 25 crores were spent to satisfy the main joint endeavor's requirements in the way determined by the respondent-Company.1
  • The respondent company once more reportedly showed interest in beginning a new project and in obtaining financing from their bank to record a delicate for the acquisition of factory property, as per the appellant. The respondent-Company addressed the appellant herein and her husband regarding the matter and advised them that they lacked adequate security to allow the bank to approve the facility and that the bank must demonstrate receivables in writing.2 Therefore, in accordance with an agreement between the M/S Sheth Developers Pvt. Ltd. & Mrs. Aparna A. Shah, the appellant's spouse issued a check for Rs. 25 crores from their joint account.

Legal Issue
The main point of contention in the Court was:
  1. Weather the Court should take into consideration the Criminal liability for a Cheque dishonor, if it's a corporation, even when it falls principally on the drawer?

Arguments And Analysis
By pointing out our Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the "NI Act") and different choices of this Court connected with the translation of the expression "cabinet," Mr. K.V. Vishwanathan, Senior Advocate. for the Mrs. Aparna A. Shah, contended that the giving of cycle by scholarly Magistrate can't be kept up with.

The complainant's respondent, Mr. Mukul Rohtagi, in any case, contended that the learned Magistrate was completely legitimate in giving cycle on the grounds that the denounced Mr. and Mrs. Shah, are a relationship of people as characterized under Section 141 and the current case is straightforwardly covered by that segment of the N.I. Act. Furthermore, he guaranteed that both the denounced and respondent Number 1 for this situation arranged the arrangement. Since the litigant moved toward the High Court and this Court by stifling every one of the materials, her case should be dismissed based on hiding/smothering material realities.

The check that had been given by respondent Number 1 had been saved in the shared service kept by both blamed. The really look at bears the name and stamp of both denounced. The litigant would get an opportunity to put forth her perspective at the preliminary, subsequently the High Court was right to dismiss her request under S.482 of CrPC, 1973 (Code of Criminal Procedure, 1973) he stated.

The Court accepts that just the "payee" of the check might be considered responsible for the reformatory activity under the details of the N.I. Act, considering the wording utilized in Section 138 and the supporting understanding that empowers more than one individual to give a check. It is laid out regulation that criminal regulation should be deciphered stringently.

In the case of Jugesh Sehgal 3(supra), this Court reached the resolution that there is no reason to seek after under Section 138 of the Act in the wake of taking note of the components for conjuring Section 138 working on its conditions. There was little debate that the check that was the focal point of the objection under Section 138 of the Negotiable Instruments Act had not been drawn by the litigant on a record that he kept up with in Indian Bank, Sonepat Branch when the complainant documented a FIR against all the charged all things considered on January 20, 2001.4

The Court established that there is little uncertainty that the absolute first necessity of Section 138 of the Negotiable Instruments Act recorded prior isn't fulfilled and arrived at the resolution that the argument against the litigant for having committed an offense under Section 138 can't be demonstrated considering the fixings expected to be satisfied to draw in the arrangements of Section 138.

By pointing out the meaning of "individual" in Section 3(42) of the General Clauses Act, 1897, Mr. M. Rohtagi, (Senior Advocate) for M/S Sheth Developers Pvt. Ltd., contended that the appealing party for this situation, being the spouse, is dependent upon criminal arraignment considering the different conditions referenced. He further contended that the litigant spouse is being attempted as a relationship of people considering the clarification of the Negotiable Instruments Act. (S.141(2)).

The court noted that, it trusts that all of the previously mentioned claims are false in light of the fact that respondent No. 1 never guaranteed that the litigant spouse was being indicted collectively of people in the grumbling she documented before the learned Magistrate. Consequently alone, the previously mentioned accommodation is probably going to be dismissed. Since this expression is unclear, it should be understood ejusdem generis considering the objectives of the vicarious obligation idea remembered for Section 141. This Court gave definitions to the words "grievance," "people," "relationship of people," "business," and "chiefs" in "Raghu Lakshminarayanan v. Fine Tubes 5, (2007) 5 SCC 103".

Gita Berry, advocate, documented a request under S.482 of the Code to have the grievance recorded under Negotiable Instruments Act (S.138). Act suppressed.

The Court of law, while deciding upon the case used the tool of "literal interpretation" and took the judgement in hand considering all the facts and considering the judgments in previous cases and going with the direction initially given by the Courts.

"Gita Berry versus Educational Foundation 6, 151 (2008) DLT 155", the solicitor contended that the offense under Section 138 of the Act couldn't be considered to have been demonstrated against her since she and her significant other shared a record. It was clarified that she had not drafted nor given the contested check, and accordingly, she demanded that the charge against her was unwarranted. Learned High Court of Delhi single judge, quashed the proceedings.

The Court held that only the cheque's drawer may be charged under Section 138 of the Act which was the given section in all the initial cases. Hon'ble Apex Court laid out,- previously mentioned lawful guideline in the choice referred to above, and this Court accepts that it is straightforwardly appropriate to current realities of the ongoing case.

Indeed, even for this situation, as has previously been referenced, the principal blamed is truly the just proprietrix for the organization, "Kamakshi Enterprises," and accordingly, it isn't the slightest bit applicable to consider whether the subsequent charged ought to be expected vicariously to take responsibility for the offense that the primary denounced is affirmed to have committed under Section 138 of the Negotiable Instruments Act.

Accordingly, I believe that it has been correctly argued that only a drawer of the cheque shall be charged under Section 138 of the said Act, the learned Judge annulled respected actions taken against the petitioner in that case & gave the Judicial Magistrate permission for moving on with & accelerate the said case in regard to further cases.

  • Assembly of India, C. (2020). The Constitution of India: Bare Act. (n.p.): Independently Published.
  • Singh, P. (2020). Critical Analysis of the Liability of Drawer and Drawee of Cheque with Respect to the Negotiable Instruments Act, 1881. Issue 2 Int'l JL Mgmt. & Human., 3, 428.
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