P.J. AGRO TECH LIMITED & ORS. versus WATER BASE LIMITED

P.J. AGRO TECH LIMITED & ORS. versus WATER BASE LIMITED

A complaint under s.138 of the Negotiable Instruments Act, 1881, is not maintainable against persons who are not the drawer of the cheque, nor was the cheque drawn from their account; only the drawer is liable under s.138 for dishonour.

Parties
Appellant: P.J. Agro Tech Limited; Appellant: Managing Director of P.J. Agro Tech Limited; Appellant: Chairperson of P.J. Agro Tech Limited; Respondent: Water Base Limited; Proforma Respondent: K. Balashankar Reddy
Jurisdiction
India
Judgment Date
28 July 2010
Procedural Posture
Criminal Appeal / Appeal From High Court Order Dismissing Petition to Quash Complaint Under S.138, After Summons Issued by Magistrate
Outcome
Appeal allowed. Order of High Court set aside. Complaint qua appellants and proforma respondents quashed.
Legal Topics
Negotiable Instruments, Dishonour of Cheque, Liability of Drawer, Strict Construction of Penal Statutes
Criminal Law Commercial Law Negotiable Instruments Dishonour of Cheque Liability of Drawer Strict Construction of Penal Statutes

Case Brief

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Parties

P.J. Agro Tech Limited

Appellant

Managing Director of P.J. Agro Tech Limited

Appellant

Chairperson of P.J. Agro Tech Limited

Appellant

Water Base Limited

Respondent

K. Balashankar Reddy

Proforma Respondent

Procedural Posture

Criminal Appeal / Appeal From High Court Order Dismissing Petition to Quash Complaint Under S.138, After Summons Issued by Magistrate

Legal Issues

  1. 1 Whether a complaint under s.138 of the Negotiable Instruments Act is maintainable against persons who are not the drawer of the dishonoured cheque from their bank account

Ratio Decidendi

A complaint under s.138 of the Negotiable Instruments Act, 1881, is not maintainable against persons who are not the drawer of the cheque, nor was the cheque drawn from their account; only the drawer is liable under s.138 for dishonour.

Court Disposition

Appeal allowed. Order of High Court set aside. Complaint qua appellants and proforma respondents quashed.

Orders

  • Any of the appellants/proforma respondents released on bail shall stand discharged from their bail bonds forthwith.