Telangana High Court
Elendula Ramesh vs State Of Telengana on 27 December, 2024
THE HON'BLE SRI JUSTICE E.V.VENUGOPAL
CRIMINAL PETITION No.2507 OF 2020
ORDER:
1 This criminal petition, under Section 482 Cr.P.C, is filed seeking to quash the proceedings against the petitioner herein in C.C.No.10 of 2020 on the file of the Court of the VII Special Magistrate, L.B.Nagar, Ranga Reddy District at Hastinapur, registered for the offence punishable under Section 138 of Negotiable Instruments Act, 1881.
2 Heard Sri Ravichandran, learned counsel for the petitioner and Sri Katika Ravinder Reddy, learned counsel for the second respondent and the learned Assistant Public Prosecutor appearing for the first respondent - State.
3 The factual matrix that led to the filing of the present criminal petition is that the petitioner is known to the second respondent / complainant through common friends. The petitioner is doing real estate business. The petitioner was in need of money and approached the second respondent for hand loan of Rs.4.00 crores. The second respondent advanced the same to the petitioner on 12.6.2019. In discharge of the said 2 debt, the petitioner issued cheque bearing No.025585 dated 14.6.2019 for Rs.4.00 drawn on ING Vysya Bank Limited, Little flower Degree College Branch, Trimulgherry Cross roads, Secunderabad besides executing a promissory note on 12.6.2019 and mortgaging properties belonging to him. The second respondent presented the said cheque in Indian Bank, Uppal branch, but the same was not received by the bankers as NON- CTS cheque and no endorsement was given. Pursuant thereto, the second respondent got issued a legal notice to the petitioner for which the petitioner had given a reply. Thereafter, the second respondent, after following the due process of law, filed the complaint on the file of learned Additional Metropolitan Magistrate, L.B.Nagar and later on being made over to the Court of the learned VII Special Magistrate, L.B.Nagar, Ranga Reddy District at Hastinapur the said complaint was numbered as C.C.No.10 of 2020 for the offence punishable under Section 138 of N.I.Act. As stated supra, seeking to quash the said proceedings, the petitioner filed the present criminal petition.
34 The learned counsel for the petitioner submitted that even as per the pleadings made in the complaint, the subject cheque was not at all presented into the Bank for encashment and as such the question of dishonour of cheque does not arise at all and even according to the second respondent the subject cheque was not accepted by the Indian Bank as per the guidelines issued by Reserve Bank of India and the same was returned without any endorsement. Therefore, the first condition stipulated in Section 138 (a) of the N.I. Act of presenting the cheque for encashment to the banker within the stipulated period has not been complied with by the second respondent. Hence there is no cause of action for the second respondent to initiate the impugned proceedings; and taking cognizance of the case under Section 138 of NI Act by the trial Court, without considering the fact that the said cheque was not presented for collection and dishonoured, itself is bad in law. He, therefore, submitted that continuation of proceedings against the petitioner is unwarranted and prayed to quash the said proceedings.
45 Per contra, the learned counsel for the second respondent submitted that as per Section 139 of N.I Act, it shall be presumed, unless the contrary is proved, the holder of a cheque received the cheque of the nature referred to in Section 138 of the Act for discharge, in whole or in part, of any debt or other liability. Therefore, once the initial burden is discharged by the complainant that the cheque was issued by the accused and the signature and the issuance of the cheque is not disputed by the accused, in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for any debt or other liability. The presumption under Section 139 of the N.I. Act is a statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant / holder of the cheque, in that case, it is for the accused to prove the contrary. In support his contentions, the learned counsel for the second respondent relied on the judgment of the Hon'ble Supreme Court dated 12.8.2022 passed in SLP (Crl.) Nos.7430 to 7432/2022.
56 As seen from the record, the complaint was filed for the offence punishable under Section 138 of N.I. Act only. The contention of the petitioner was that even as per the pleadings of the second respondent the cheque was not presented into the bank and that it was not dishonoured for any of the reasons enumerated in Section 139 of N.I.Act. Therefore, the petitioner is not liable for any punishment under Section 139 of the Act since none of the ingredients were established by the second respondent.
7 The full form of CTS is Cheque Truncation System. It is a way to transfer money electronically. NON-CTS cheques do not contain any watermark, IFSC code or branch name. These cheques also do not have magnetic ink. Any cheque books which do not contain a CTS-2010 cheque leafs, are known as non-CTS cheque books. As per the guidelines of RBI, a person with a NON-CTS cheque will not be able to transfer money since there is a higher risk of forgery. Most banks stopped clearing Non-CTs cheques from January 1, 2019. The Cheque Truncation System (CTS), which is now active at the major clearing houses of the country, was made operational throughout India by 6 September 2020, according to the Reserve Bank of India. Cheques won't be cleared by the banks after that if any person is still using a chequebook that isn't CTS. In the case on hand, the petitioner issued cheque bearing No.025585 dated 14.6.2019 by which date clearing of NON-CTS cheques was stopped by most of the banks.
8 So far as the present case is concerned, it is admitted fact that the cheque in question was NON-CTS cheque. But if in the present case, the said procedure is not followed by the drawee or collecting bank, then certainly the petitioner could not be penalised for the same. His bank account was not even processed by the bank official and therefore it could not be said that the cheques were returned unpaid due to 'insufficient funds' or 'exceeds arrangement' or 'signatures differ' and hence, no liability can be imputed on the petitioner for said return of cheques. It is settled law that for filing a complaint under Section 138 of N.I Act, the cheque must have been returned unpaid due to the reasons mentioned in the said provision viz., 'insufficient funds' or 'exceeds arrangement' or 'signatures differ', etc. Thus, an action lies under the said 7 provision if the cheque is got dishonoured due to the fault of the accused. But if the cheque gets dishonoured due to some technical banking reasons wholly unconnected with the accused, then he is not responsible for the same and no case under Section 138 of N.I Act can be filed against him for the said dishonour of cheque. The reason for return of cheque in the present case i.e. NON-CTS cheque is not what is envisaged in Section 138 of N.I. Act and hence, the complaint under Section 138 of N.I. Act is not maintainable and is required to be quashed. Taking cognizance of the offence under Section 138 of N.I Act by the trial Court is wholly misconceived because the concept of the court below that it has to be seen during trial that whether there were sufficient funds in the account of the petitioner or not could be held only if the complaint is legally maintainable before the Court. Once the complaint itself is not legally maintainable no question of holding trial would arise. 9 For all the above reasons, this Court is of the opinion that the petitioner deserves the relief. Accordingly, this criminal petition is allowed quashing the proceedings against the petitioner herein in C.C.No.10 of 2020 on the file of the Court of 8 the VII Special Magistrate, L.B.Nagar, Ranga Reddy District at Hastinapur.
10 Miscellaneous petitions if any pending in this criminal petition shall stand closed.
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E.V.VENUGOPAL, J.
Date:27.12.2024 Kvsn