Anand Loganathan vs Dharambir Nanda

Pratap Singh, J.—The accused in C.C. Nos. 302, 303, and 314 of 1992, on the file of the judicial Magistrate No. 1, Coimbatore, has filed

this petition u/s 482 of the Criminal Procedure Code, 1973, praying to call for the records in the above cases and quash the same.

The short facts are : The allegations in the complaint in C.C. No. 302 of 1992, are briefly as follows :

The complainant and the accused were partners. The complainant was forced to retire from the firm. A deed of dissolution was executed on

January 10, 1992. The total amount due to the complainant was Rs. 1,44,000. The accused agreed to give the same and issued cheques dated

January 10, 1992, January 31, 1992, February 15, 1992, March 1, 1992, and March 31, 1992, for various amounts. The complainant presented

the cheque dated January 10, 1992. It was dishonoured for want of funds. The accused instructed the complainant to re-present the same. The

complainant presented the same on a later date and it was dishonoured. The cheques dated January 31, 1992, February 15, 1992, and March 1,

1992, were presented to the banker. On March 26, 1992, they were returned stating ""payment is stopped"". The accused knew that the cheques

will not be honoured by the banker as he did not have sufficient funds in his account. So he gave a stop payment order to the bank. The complaint

preferred separate complaints in respect of the same.

The complainant presented the cheque dated March 31, 1992. It was dishonoured for want of sufficient funds. The complainant sent the

statutory notice. The accused received it on April 7, 1992. He failed to make the payment within 15 days. Hence, the complaint.

In the complaint in C.C. No. 303 of 1992, the allegations are similar to the allegations made in C.C. No. 302 of 1992. That complaint relates to

the cheques dated February 15, 1992, and March 1, 1992, and both of them when presented for collection on March 26, 1992, were returned

stating that payment was stopped. The accused knew that the cheque will be dishonoured by the banker as he did not have sufficient funds. So he

gave the stop payment order to the bank. After the statutory notice, the complaint was laid.

In C.C. No. 314 of 1992, the allegations are similar to the allegations made in C.C. No. 302 of 1992. This complaint relates to the cheque

dated January 31, 1992. When presented, it was dishonoured by the banker stating that payment was stopped by the drawer. The accused did

not have sufficient funds in his bank. Having smelt the complainant will present the second cheque issued by him for collection, the accused

stealthily informed the banker to stop the payment. His act is without any valid reason. His entire conduct of giving such notice shows that the did

not have sufficient funds to honour this cheque. After issuance of the statutory notice, since the amount was not paid, this complaint was laid.

Mr. V. Raghavachari, learned counsel appearing for the petitioner, would submit that these cheques were issued only as a security and not for

discharge of any legal liability in which case alone the offence u/s 138 of the Negotiable instruments Act is attracted. He would further submit that

when the cheques were returned for the reason that payment was stopped, it will not come within the purview of section 138 of the Negotiable

Instruments Act. I have heard Mr. A. Raghunathan on the above aspects and I have carefully considered the rival submissions.

To consider the first submission, the relevant allegations in the complaint need be stated. In the complaint, it is stated that the complainant and

the accused were carrying on partnership business that the complainant was forced to retire from the firm that deed of dissolution was executed on

January 10, 1992, that the total amount due to the complainant was Rs. 1,44,000 and that the accused agreed to give the same and issued the

cheque concerned in these three cases. Thus, the allegations would make it abundantly clear that they were issued for amounts payable to the

complainant. On those allegations, this submission will have to fail. Whether the above allegations are true or whether they were executed by way

of security, as now claimed, can be considered only by letting in evidence which would come only at the stage of trial. Hence, on this ground, this

complaint cannot be quashed at the threshold.

Regarding the second ground, the allegations in the complaint are not only that the payment was stopped by the accused but also further

averments were made in the complaint. In C.C. No. 314 of 1992, it is alleged that the accused did not have sufficient funds in his bank and having

smelt that the complainant will present the second cheque for collection, the accused stealthily informed the banker to stop payment and so it is

deemed to have been dishonoured for want of funds. In C.C. No. 303 of 1992, in the complaint, it is alleged that the accused knew that the

cheques will be dishonoured by the banker as he did not have sufficient funds and so he gave a stop payment order to the bank. While the

allegations are as above, neither this submission made by Mr. V. Raghavachari can be accepted. In Manohar v. S. Mahalingam [1992] LW (Crl.)

367 and in Binary Systems Pvt. Ltd. v. Nobel Power Pvt. Ltd. [1992] LW (Crl.) 307, Justice Padmini Jesudurai in the former case and myself in

the latter case had occasion to consider the very same question where similar allegations were made in cases where cheques were returned on the

ground of stop payment and we have held that on that ground the complaint cannot be quashed at the threshold. Those rulings squarely apply to

the facts of these cases. In Jayalakshmi (R.) v. Rashida [1991] LW (Crl.) 603; [1992] 74 Comp Cas 841 I had to consider a question where

payment was countermanded by drawer. In that case also, the accused did not have funds in the bank. But the sufficiency of those allegations was

not considered in that ruling.

Since none of the submissions made by Mr. V. Raghavachari finds acceptance with me, these petitions fail and shall stand dismissed.