Punjab-Haryana High Court
Rama Gupta And Ors. vs Bakeman'S Home Products Ltd. on 31 January, 1992
Equivalent citations: [1994]79COMPCAS473(P&H), 1993CRILJ744
JUDGMENT S.S. Grewal, J.
1. This petition under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "the Code"), relates to quashment of the impugned complaint, annexure P-2, filed by the complainant-respondent against the present petitioners under Section 138 of the Negotiable Instruments Act, 1881 (as amended up to date), read with Section 420 of the Indian Penal Code, 1860, and consequent proceedings including the summoning order, annexure P-1.
2. In brief, facts relevant for the disposal of this petition as emerging from the complaint, annexure P-2, are that the complainant, a limited company, is engaged in the manufacture of biscuits and confectionery and selling the same in different parts of the country through its distributors and dealers. The accused are its authorised distributors and dealers ; that, as per orders received from the accused from time to time, the complainant had been supplying goods to the accused ; that, on August 26, 1989, the accused agreed to clear the outstanding amount due to the complainant against the goods received by the accused through cheques of Rs. 10,000 every month. Accordingly, cheque No. 097680, dated June 30, 1990, for Rs. 10,000 was issued by the accused in favour of the complainant as part payment against the outstanding amount due from the accused. The said cheque drawn on the Benares State Bank Ltd., Mathura (U.P.), was presented by the complainant to its bankers, the State Bank of Patiala at Patiala. The latter sent it for encashment to the Benares State Bank Ltd., Mathura, where the accused are maintaining their account. The said cheque, however, was returned by the Benaras Bank with the remarks "stop payment". The cheque was subsequently returned by the State Bank of Patiala to the complainant on July 20, 1990. The complainant served upon the accused a notice dated July 23, 1990, sending them intimation that the cheque had been dishonoured and that they should make the payment to the complainant but, even after receipt of the notice, the accused, instead of making any payment, were making one excuse or the other, to avoid payment.
3. The petitioners, in their petition, have specifically pleaded that there was no paucity of funds available for encashment of the cheque issued as per the certificate of the bank. It was further emphasised that a settlement was arrived at under which thirteen post-dated cheques were issued to the complainant. Six out of them were encashed. In the meantime, the complainant not only established direct contacts with some concerns but also withheld, most unexpectedly, payments of amounts due to the petitioners in the ordinary course of business which were without any dispute. A detailed letter dated March 3, 1990, copy whereof is annexure P-3, was sent to the complainant and the information that the payment in respect of the cheque in question has been stopped by the drawer (the accused) was sent to the complainant about three months prior to June 30, 1990, when the payment of the said cheque became due.
4. In spite of the fact that several opportunities were granted to the complainant, no return or affidavit has been filed on behalf of the complainant to rebut the allegations made in the petition.
5. Learned counsel for the parties was heard.
6. Learned counsel for the petitioners contended that the cheque in question was not returned by the bank unpaid either because the amount of money standing to the credit was insufficient to honour the cheque or because it exceeded the amount arranged to be paid with that bank. It was further submitted that as per the certificate of the manager of the Benares State Bank Ltd. at Mathura, annexure P-8, the cheque in question was only returned to the drawee because the payment had been stopped by the drawer under instructions of the account holder, Adarsh Agencies, Mathura. It is specifically mentioned in the aforesaid bank certificate that the cheque was returned on July 10, 1990. The balance was sufficient on that date and the cheque in question would have been encashed by us (by the bankers) had there not been instructions from the drawer to stop payment.
7. Reliance in this respect has rightly been placed by counsel for the petitioners on the single Bench authority of this court in Abdul Samad v. Satya Narayan Mahawar [1990] 2 RCR 335 ; [1993] 76 Comp Cas 241, 243, wherein it was observed that "Parliament in its wisdom has confined the offence referred to in Section 138 only to bouncing of a cheque on the ground of inadequate balance in the account concerned. Where the cheque is returned unpaid on other grounds, the same has not been made an offence."
8. Faced with this situation, learned counsel for the respondent contended that he may be given an opportunity to rebut the certificate of the bank, annexure P-8, in order to prove that there was not sufficient balance in the bank account of the accused firm and that the cheque was dishonoured because of insufficiency of amount in the account of the accused firm. Reliance in this respect was placed on the single Bench authority of this court in Nirmal Singh v. Jyoti Sarup [1991] 2 RCR 535; [1993] 77 Comp Cas 399, 401, wherein it was observed that "The complainant is entitled to prove the various ingredients of the offence and the certificate of the bank as to the reason why payment of the cheque was not being made is evidently not conclusive. It is open to the complainant to show that the cheque was returned by the bank unpaid because the amount of money standing to the credit of that account was insufficient to honour the cheque. In other words, prima facie it cannot be said that an essential ingredient of the offence being absent, there is no justification for the proceedings to go on according to law".
9. The facts of the aforesaid authority in Nirmal Singh's case [1993] 77 Comp Cas 399 Were entirely different. In that particular case, the cheque in question was issued on 16th of March, 1990, for Rs. 1,16,643. It was presented to the bank several times. Ultimately, it was returned on 21st of May, 1990, with the remarks that the payment thereof had been stopped by the drawer. On 19th of March, 1990, the account of the petitioner showed balance of Rs. 37,091.33 which was evidently insufficient to make payment of the cheque of Rs. 1,16,643. On April 17, 1990, the petitioner closed the account and there was no question of payment of cheque from the account of the petitioner. The aforesaid observations made by the single Bench were made in view of the facts and circumstances of the case referred to above. The facts of the case in hand are entirely different. In the present case, the cheque is comparatively for a smaller amount. The fact remains that according to the positive assertions in the petition which have not been rebutted by the complainant, there was sufficient amount in the account of the accused firm in the State Bank of Benares at Mathura as is prima facie made out from the banker's certificate, copy whereof is annexure P-8. Thus, no offence under Section 138 of the Negotiable Instruments Act, 1881, as amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988, has been made out against the accused.
10. The second contention made on behalf of the accused-petitioners is that the cheque in question was issued on behalf of the accused firm to discharge its pre-existing liability and was certainly not issued against delivery of goods by the complainant and as such no offence of cheating under Section 420 of the Indian Penal Code has been made out, and, at best the dishonour of the cheque amounts to breach of promise which is a civil liability. From a careful perusal of the complaint, it is apparent that there is no allegation or assertion that the cheque in question was given on behalf of the accused firm to the complainant against the delivery of the goods. Rather it is specifically pleaded in para No. 4 of the complaint that the cheque in question was issued by the accused in favour of the complainant as part payment against the outstanding amount due from the accused. It is thus quite evident that there are no specific allegations in the impugned complaint that the accused-petitioners had fraudulently or dishonestly induced the complainant to deliver any property against the cheque issued by them which was subsequently dishonoured. I find support for my view from the single Bench authority of this court in Chhote Lal Aggarwal v. State of Punjab [1987) 2 RCR 263, wherein it was held that the cheques were not issued against the delivery of goods but were drawn in order to discharge a pre-existing liability. The dishonouring of the cheques, therefore, amounted only to breach of promise which is a civil liability and not a criminal offence under Section 420, Indian Penal Code.
11. Learned counsel for the respondent relied upon the single Bench authority of this court in Tilak Raj Bakshi v. Prem Chand [1984] 2 CLR 496, wherein the bank account was closed on May 25, 1979, i.e., 3 1/2 months earlier to the issuance of the cheque. It was a current account and when the debit balance had been struck, the account was closed. In these circumstances, when no money was kept by the accused-respondent with the bank, it is idle to contend that he expected that the cheque issued by him would not be dishonoured. In these circumstances, the statutory illustration (d) to Section 415, Indian Penal Code, visualizes that this is intentional deception whereby there is dishonest inducement to the other to deliver the article with the intention that its price would not be paid. That act accordingly amounts to cheating.
12. The facts of Tilak Raj Aggarwal's case [1984] 2 CLR 496 are entirely different from the facts of the case in hand. As already discussed earlier, there was sufficient amount in -the account of the accused-firm for honouring the cheque issued in favour of the complainant. The said postdated cheque could not be encashed merely because its payment was stopped by the drawer, intimation in respect whereof had already been sent to the complainant about three months prior to the date when the payment of the cheque became due. The authority in Tilak Raj Aggarwal's case [1984] 2 CLR 496 is not applicable to the facts and circumstances of the present case and is clearly distinguishable.
13. For the foregoing reasons, I am of the considered view that there are no allegations in the complaint which could make out a prima facie case either under Section 138 of the Negotiable Instruments Act or under Section 420 of the Indian Penal Code against the petitioners. Thus, continuation of proceedings against the petitioners in the trial court would amount to abuse of the process of the court. The impugned complaint, ' annexure P-2, and consequent proceedings taken against the petitioners including the summoning order, annexure P-1, are thus ordered to be quashed. This petition is allowed accordingly.