Karnataka High Court
Snow White Hi-Tech Launderette vs Smt. Shamantha R. Hariharan on 4 October, 2002
Equivalent citations: ILR2006KAR3105, AIR 2007 (NOC) 939 (KAR.) = 2007 (2) AIR KAR R 132, 2007 (3) ABR (NOC) 507 (KAR.) = 2007 (2) AIR KAR R 132 2007 (2) AIR KAR R 132, 2007 (2) AIR KAR R 132, 2007 (2) AIR KAR R 132 2007 (3) ABR (NOC) 507 (KAR.) = 2007 (2) AIR KAR R 132, 2007 (3) ABR (NOC) 507 (KAR.) = 2007 (2) AIR KAR R 132
Author: S.R. Bannurmath
Bench: S.R. Bannurmath
JUDGMENT S.R. Bannurmath, J.
1. Heard the learned Counsel for the appellant.
2. These appeals are filed against the judgment of acquittal dated 24.8.2002 passed by the learned Additional C.M.M. Bangalore acquitting the respondent-accused for the offence punishable Under Section 138 of the Negotiable Instruments Act.
3. As per the complainant, in respect of the amount due in a sum of Rs. 92,695/-, the respondent had issued 3 cheques drawn on the State Bank of Mysore towards discharge of the legal liability and thereafter, when the cheques were presented, the same were returned for the reason "payment stopped". Thereafter, legal notice was issued to the accused and as no amount was paid, the present complaint came to be filed.
4. The Complainant has examined himself as P. W. 1 and produced 13 documents. The respondent examined herself as D. W. 1 and got produced Ex. Dl, the Statement of Accounts. The main defence was that, though cheques were issued by her, as the goods supplied were of not proper standard as required and asked for, immediately after issuance of the cheques on receipt of goods, respondent has sent Fax message Ext. P 8 dated 20.8.1999 to the Complainant, as well as intimated the Bank to stop payment. As such, it was contended that there was no penal liability arising. Appreciating the evidence of both sides and the contentions, the learned trial Judge acquitted the respondent. Hence, the present appeal.
5. The law regarding dishonour of cheques and stop payment is well settled. The Hon'ble Supreme Court in the case of Electronics Trade & Technology Development Corporation Ltd., Secunderabad v. Indian Technologists & Engineers (electronics) (p) Ltd. reported in K.K. Sidharathan v. T.P. Praveena Chandran it has been held that if after the cheque is issued to the payee or to the holder in due course and before it is presented for encashment notice is issued to him not to present the same for encashment and yet the payee or holder in due course presents the cheque to the Bank for payment and when it is returned on instructions, Section 138 does not get attracted. However, the learned Counsel for the petitioner relied upon the later pronouncement of the Apex Court in the case of Modi Cements Ltd. v. Kuchil Kumar Nandi 1998 Crl. L.J. 1397 to contend that once the cheque is issued by the drawer, a presumption Under Section 139 of the Negotiable Instruments Act in favour of holder must follow and merely because the drawer issues a notice to the drawee or to the Bank for stoppage of the payment, it will not preclude an action Under Section 138 by the drawee or the holder of a cheque in due course.
6. I have perused all the pronouncements. The view taken by the Apex Court in the earlier pronouncements in Electronics Trade & Technology Development Corporation Ltd., Secunderabad v. Indian Technologists & Engineers (Electronics) (P) Ltd., (Supra) and K.K. Sidharathan v. T.P. Praveenachandran (Supra) have been no doubt reconsidered by the Hon'ble Supreme Court in Modi Cements Ltd. v. Kuchil Kumar Nandi (Supra) and in fact. The same has been reiterated and explained further by the Apex Court in the later decision as follows: Section 138 of the Act is a penal provision wherein if a person draws a cheque on an account maintained by him with the Banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part of any debt or other liability, is returned by the Bank unpaid, on the ground either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence. The distinction between the deeming provision and the presumption is well discernible. To illustrate, if a person, draws a cheque with no sufficient funds available to his credit on the date of issue, but makes the arrangements or deposits the amount thereafter before the cheque is put in the bank by the drawee, and the cheque is honoured, in such a situation, drawing of presumption of dishonesty on the part of the drawer Under Section 138 would not be justified. Section 138 of the Act gets attracted only when the cheque is dishonoured.
Thus the distinction regarding stop payment and liability is the dishonest intention on the part of the drawer. If the cheque is drawn and given to a payee without there being sufficient fund and immediately after issuance of cheque, stop payment is requested to the Bank, the probable inference is the dishonest intention of the drawer because without having sufficient funds, he has issued the cheque and thereafter see to it, that the cheque is not honoured by the Bank by requesting stop payment whereas, if there is any material to show that there was sufficient fund in the account of the drawer and for some reason, after issuance of cheque, he has instructed the Bank to stop payment that too after notice to the payee, it will not attract the penal provision Under Section 138 of the Negotiable Instruments Act. In the present case, the accused has shown that on the date of stop payment, she had sufficient funds and in this regard, she had produced her Bank Account Ex. D1. This is not much controverted except the oral denial by the Complainant. It is also admitted by the Complainant that even before the presentation of the cheque itself, he had received the Fax message Ext. P8 from the respondent and in spite of said notice of stop payment, he has proceeded to present the cheque to the Bank. In the light of the law laid down by the Apex Court in the aforesaid judgment, in my view, the trial Court was justified in not drawing the presumption Under Section 138 of the Negotiable Instruments Act against the respondent and further justified in dismissing the Complaint. I see no merit in these appeals.
7. The appeals are accordingly rejected.