The High Court at Calcutta has ruled that criminal liability under Section 138 of the Negotiable Instruments Act, 1881, is strictly personal (intuitu personae) and cannot be shifted to or inherited by a legal representative or heir upon the drawer’s demise. Justice Uday Kumar, while quashing a criminal proceeding against a non-signatory brother of a deceased drawer, observed that while civil debt may follow the assets of an estate, a “crime” is not a legacy that can be bequeathed.
Background of the Case
The matter arose from a business transaction between the Opposite Party (Complainant), Golam Saharia, and one Tapan Kumar Dey (since deceased). It was alleged that Tapan, a Ration Dealer, secured a loan of ₹27,00,000/- and issued an account payee cheque dated February 1, 2022, to discharge the liability. However, Tapan expired on February 3, 2022.
Despite the drawer’s death, the Complainant presented the cheque on April 6, 2022, which was dishonoured with the endorsement “Funds Insufficient.” The Complainant subsequently served a statutory demand notice upon the petitioner, Gautam Dey (the deceased’s brother), as a “Legal Representative” and “Business Associate.” When the petitioner refused to pay, a complaint under Section 138 of the NI Act was instituted. The petitioner’s plea for discharge was rejected by the Learned Judicial Magistrate, Berhampore, on August 4, 2023, leading to this revisional application.
Arguments of the Parties
For the Petitioner: Mr. Somnath Adhikary, representing Gautam Dey, contended that the proceeding was coram non judice. He argued that the petitioner was neither the “drawer” nor the “maintainer” of the account. He emphasized that criminal liability is strictly personal and the “concatenation of acts” required for the offense—specifically a valid notice to the drawer—could not be fulfilled as the drawer died before the cheque was presented. He relied on the Supreme Court rulings in Alka Khandu Avhad VS. Amar Shyamprasad Mishra (2021) and Ganga Prasad Ratnakar vs. Fanindra Kumar Chandra (2023).
For the Opposite Party: Mr. Pratip Kumar Chatterjee, Learned Senior Advocate, argued that the petitioner was an active “Business Associate” and “Co-borrower” based on an “Angikar Patra.” He contended that under Section 29 of the NI Act, a legal representative is liable for the obligations of the deceased. He further argued that the procedural law for summons-triable cases does not provide for a “discharge” stage once process is issued.
Court’s Analysis and Observations
The Court formulated and addressed four key questions regarding the nature of liability under the NI Act.
On Personal Liability: Justice Uday Kumar observed that Section 138 is a “statutory offense” created by legal fiction, where penal consequences are tethered to the individual who signs the instrument and maintains the account.
“In the realm of criminal jurisprudence… criminal liability is governed by the principle of intuitu personae; it is personal to the offender and dies with the offender.”
The Court clarified that the principle of action personalis moritur cum persona (a personal action dies with the person) operates with full force. While Section 29 of the NI Act allows recovery of debt from an estate in civil law, it cannot be transposed into criminal proceedings.
On the Status of Non-Signatories: Referencing Alka Khandu Avhad, the Court held that even in cases of joint liability, a person who has not drawn the cheque cannot be prosecuted. The Court noted:
“In transactions involving individuals, the ‘signatory rule’ is absolute… The petitioner’s status as a ‘business associate’ does not grant him the legal capacity to authorize payment from his brother’s account.”
On the Concatenation of Acts: The Court found that the statutory requirements were broken upon the drawer’s death. Since the drawer died before presentation, the bank’s mandate was revoked. Furthermore, the law does not recognize “substituted service” of a criminal demand notice on an heir. A deceased person cannot commit the “default” of non-payment within 15 days of notice.
On Procedural Grounds: The Court critiqued the Magistrate’s refusal to entertain a plea for discharge on technical grounds. It held that while a Magistrate cannot “recall” process, continuing a trial that is “legally incompetent from its inception” constitutes an abuse of the process of law.
Decision
The High Court allowed the revisional application and quashed the proceedings against Gautam Dey.
- The Court held that criminal liability under Section 138 cannot be inherited by a legal representative.
- The order dated August 4, 2023, rejecting the discharge prayer was set aside.
- The petitioner was discharged from his bail bonds.
- The Trial Court was directed to record the abatement of proceedings against the deceased Tapan Kumar Dey.
The Court expressly clarified that the Complainant remains free to pursue a Civil Suit for Recovery against the estate of the deceased in accordance with the Law of Succession.
Case Details:
- Case Title: Gautam Dey vs. Golam Saharia
- Case No.: CRR 3672 OF 2023 (with CRAN 2 OF 2024)
- Bench: Justice Uday Kumar
- Date: April 28, 2026
