Abraham Memorial Education Trust v. C. Suresh Babu
(2012) 5 CTC 203 : (2012) 175 Comp Cas 361 : (2012) 2 LW (Cri) 196
In the High Court of Madras
Crl.O.P. 12630, 12661/2012
Before Justice S. Nagamuthu
Decided on August 07, 2012

Relevancy of the Case: Interpretation of Section 85 of the Information Technology Act, 2000

Statutes and Provisions Involved

• The Information Technology Act, 2000 (Section 85)
• The Constitution of India (Article 300A)
• The Negotiable Instruments Act, 1881 (Section 7, 26, 138, 141)
• The General Clauses Act, 1897 (Section 3(42))
• The Indian Trusts Act, 1882 (Section 3)
• The Indian Penal Code, 1860 (Section 11)

Relevant Facts of the Case

• Abraham Memorial Educational Trust runs Ebenezer International School.
• The managing director of the trust borrowed Rs. 7 crores from the respondent for developing the school.
• The trust issued twenty post-dated cheques. The cheques got dishonoured due to insufficient funds in the account.
• After serving the legal notice, the respondent filed a complaint against the trust and its trustees under Section 138 of the Negotiable Instruments Act, 1881.
• The present petition seeks to quash the complaint.

Opinion of the Bench

• A trust with one or more trustees is a “company” under Section 138 and 141 of the Negotiable Instruments Act, 1881.
• The same interpretation applies to Section 85 of the Information Technology Act, 2000.
• Trustees were in charge of the day-to-day affairs of the trust. They had assured the payment to the respondent. Therefore, it is not reasonable to quash the complaint.

Final Decision

• The court dismissed the petition and closed miscellaneous petitions.