Court rules that criminal liability under Section 138 of the Negotiable Instruments Act cannot be inherited by a legal representative or non-signatory.
In a landmark judgment, the Calcutta High Court has quashed criminal proceedings against Gautam Dey, who was compelled to stand trial for the alleged dishonour of a cheque issued by his deceased brother, Tapan Kumar Dey. The judgment, delivered by Justice Uday Kumar, clarifies that criminal liability under Section 138 of the Negotiable Instruments Act, 1881, is strictly personal to the drawer of the cheque and cannot be passed on to legal representatives or non-signatories.
The case originated from a business transaction between the complainant, Golam Saharia, and Tapan Kumar Dey, who had issued a cheque for Rs. 27,00,000 to settle a business liability. Following Tapan Kumar Dey's demise on February 3, 2022, the cheque was presented for payment, resulting in dishonour due to insufficient funds. Subsequently, Golam Saharia served a statutory demand notice on Gautam Dey, Tapan's brother, attempting to hold him liable as a legal representative and business associate.
Justice Kumar's judgment emphasized the non-heritable nature of criminal liability under Section 138, stating that the penal consequences are personal to the individual who signed the cheque and maintained the account. The judgment referenced Supreme Court precedents, including Alka Khandu Avhad v. Amar Shyamprasad Mishra, to reinforce the principle that criminal liability cannot be transferred to another person based on joint liability or family ties.
The court also addressed the procedural aspects, criticizing the refusal of the magistrate to discharge Gautam Dey from the proceedings. Justice Kumar noted that the magistrate's decision constituted a failure to prevent an abuse of process, as the case was legally incompetent from the outset due to the petitioner's non-signatory status and the deceased drawer's involvement.
The judgment further clarified that the statutory prerequisites for an offense under Section 138, such as the issuance of a demand notice and failure to pay, cannot be fulfilled when the drawer dies before the cheque's presentation. The notice served on Gautam Dey did not satisfy legal requirements, as it could not initiate a valid criminal prosecution.
The court concluded by annulling the proceedings against Gautam Dey, discharging him from all bonds, and advising the complainant to pursue civil remedies against the estate of the deceased if deemed appropriate.
This decision underscores the importance of adhering to statutory mandates in criminal prosecutions and serves as a caution against misusing legal processes for civil debt recovery.
Bottom line:-
Criminal liability under Section 138 of the Negotiable Instruments Act, 1881, is strictly personal to the drawer of the cheque and cannot be inherited by a legal representative or non-signatory upon the drawer's demise.
Statutory provision(s): Section 138 of the Negotiable Instruments Act, 1881, Section 251 of the Criminal Procedure Code, 1973, Section 482 of the Criminal Procedure Code, 1973, Article 21 of the Constitution of India.
Gautam Dey v. Golam Saharia, (Calcutta) : Law Finder Doc id # 2890189
