Punjab-Haryana High Court
Raj Kumar Gupta vs Manmohan Singh on 14 September, 1992
Equivalent citations: [1994]79COMPCAS335(P&H)
JUDGMENT G.S. Chahal, J.
1. Raj Kumar Gupta, the petitioner, in this petition under Section 482 of the Code of Criminal Procedure, 1973, seeks quashing of the complaint, annexure P-1, filed against him by the respondent for the offence under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881, as amended by Act No. 66 of 1988, as also the order, annexure P-3, passed by the Judicial Magistrate, Chandigarh, summoning the petitioner to stand trial for the said offences.
2. The facts as gathered from the complaint, annexure P-1, may be briefly stated :
The complainant, Manmohan Singh, is running the business of marketing of TV sets Nikitasha and Choice and the petitioner had been making purchases from him on credit basis and making payments from time to time. Four cheques as detailed in para No. 2 of the complaint, annexure P-l, for Rs. 22,000 were issued and these cheques were drawn on the Bank of India, Sector 32, Chandigarh. The complainant presented the said cheques to the banker but the same were returned by the bankers with the remarks "Payment stopped by the drawer". The complainant then approached the petitioner for cash payment but his request was not acceded to. Registered A.D. notice was then issued to the petitioner and the reply was received which was, however, incorrect. It is only an excuse made by the accused to save his skin from the criminal case under the Negotiable Instruments Act. The petitioner had thus played a fraud on the complainant by stopping payment of the cheque issued by him in his favour.
3. Section 138 of the Act provides as follows :
"138. Dishonour of cheques for insufficiency, etc., of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a 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, 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 and shall without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque or with both :
Provided that nothing contained in this Section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier ;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid ; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.--For the purposes of this section, 'debt or other liability' means a legally enforceable debt or other liability."
4. It will be seen that to make out an offence under this Section one of the main ingredients is that the cheque is returned unpaid because the amount available in that account is insufficient for making the payment of the cheque. It is well known that the cheque may be returned by the bank unpaid for various reasons. One of the reasons can be that there are no funds in the account on which the cheque is drawn to enable the bank to make the payment. Parliament in its wisdom has confined the offence referred to in Section 138 of the Act only to bouncing of a cheque on the ground of inadequate balance in the account concerned. However, if the cheque is returned unpaid on other grounds, the same has not been made an offence against the person drawing the cheque. For this view, I am also supported by the observations of A. P. Chowdhary J. in Abdul Samad v. Satya Narayan Mahawar [1990] 2 CLR 338 ; [1993] 76 Comp Cas 241 (P & H) and S. S. Grewal J. in Rama Gupta v. Bakesman's Home Products Ltd. [1992] ISJ (Banking) 269.
5. Faced with this situation, learned counsel for the complainant-respondent urged that the matter be left to the Magistrate for reconsidering if on the facts stated in the complaint some offence is made out. I feel no justification in passing the said order. Since the reading of the complaint itself makes out no offence under Section 138 of the Act, continuation of the proceedings will amount to abuse of the process of the court and powers under Section 482 of the Code of Criminal Procedure must be invoked to terminate the proceedings.
6. I hereby accept the petition and quash the complaint, annexure P-1, as well as all the consequent proceedings.