Ashok Ghulati vs Raghuvir Khajuria

The petitioner is seeking to invoke the inherent powers of this court under sec. 561A Cr.P.C. to quash the complaint filed under section 138 of

the Negotiable Instruments Act, 1988 read with section 420 R.P.C., by the respondentcomplainant for prosecution of the petitioner before the

court of learned Chief Judicial Magistrate, Jammu.

The respondent has filed the complaint alleging therein that during the course of business transaction, petitioneraccused issued two cheques viz.

No. 1427666 dated 28.08.1995 for an amount of rupees one lac only and No. 1437667 dated 04.09.1995 for an amount of rupees one lac and

fifty thousand only, in favour of the respondent in discharge of his liability arisen during business transaction. On presentation of the cheques to the

J&K Bank Ltd. Branch Shalimar Road, Jammu through Punjab National Bank, Jammu, both the cheques were dishonoured by the bank vide

memo dt. 09.09.1985 because of insufficiency of funds in the account of the petitioner. Despite service of notice in writing as contemplated under

clause (c) of Sec. 138 of the Negotiable Instruments Act (hereinafter called ""The Act'), the petitioner has not made the payment.

I have heard the learned counsel and perused the record.

One of the grounds for quashing the complaint is that the complaint does not disclose that the cheques have been issued ""for the discharge, in

whole or part, of any debt or other liability."" The complainant respondent has stated in para (2) of the complaint that ""the cheques were issued by

the petitioneraccused in favour of the respondent in discharge of the liability arising out during business transaction."" His another argument is that it

is incumbent and a legal requirement which the complainant must satisfy and primafacie establish, before the petitioner is asked to stand trial, that,

the debt or other liability is legally enforceable"". In support of his contention he has relied upon the explanation attached with section 138 of the

Negotiable Instruments Act, 1988. His contention is that since the complaint does not disclose in any manner that the consideration of the cheques

was in discharge of the liability enforceable in law, the trial of the petitioner before the Magistrate is an abuse of process of law and the complaint is

required to be quashed.

Countering the contention of the learned counsel for the petitioner, the learned counsel for the respondent has submitted that section 139 of the

Act places a statutory presumption that the holder of the cheques receives the cheques against discharge in whole of in part of any debt or other

liability, unless the contrary is proved, primafacie, and the complaint cannot be quashed. The scheme of the Act is that on account of the dishonor

of the cheque, when presented to the Bank, the holder of the cheque is under legal obligation under clause (c) of Section 138 of the Act to issue a

notice in writing to the drawer of he cheque inviting his attention that the cheque has been dishonored and is liable for penal consequences under

section 138 read with sec. 142 of the Act.

The contention of the learned counsel is that the cheques were not issued for discharge of any liability and have been issued under particular

circumstances and also that it has bearing with an agreement to that effect between the parties. Such counter allegations are not on record before

the trial court. If it is so, even then it is a matter to be inquired into by the competent court. Such bald counter allegations cannot be accepted ex

facie as grounds for quashing the proceedings. The documents annexed with the petition are not before the Trial Magistrate. It is settled

proposition of law that no new material can be introduced by either party in support of their contentions before the High Court. If such documents

are considered without giving an opportunity to the trial court, it would be highly improper and impermissible to base the decision upon such

documents, which would not be before the trial court.

The law requires that before filling complaint under section 138 of the Negotiable Instruments Act, 1881, statutory procedure prescribed as

contained in proviso to sec. 138 and sec. 142 of the Act is required to be complied with.

Proviso to section 138 reads, ""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 an 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.

Section 142 stipulates that no court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing,

made by the payee or, as the case may he, the holder in due course of the cheque and such complaint is made within one month of the date on

which the cause of action arises under clause (c) of the proviso to Sec. 138. While, reading clauses (a) to (c) of proviso to Sec. 138, it is manifest

that the cheques can be presented to the bank within the period of its validity and if the cheque is dishonoured and 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, in that eventuality the holder of the cheque can make a demand for payment of said amount of money by

giving notice in writing to the drawer of the cheque within fifteen days of the receipt of information by him from the bank. After the notice is served

upon the drawer of the cheque and in case draw fails to make the payment to the holder of the cheque within a period of fifteen days from the date

of receipt of notice, the holder of the cheque can file a complaint and in such circumstances the court can take cognizance of such offence

punishable under Sec. 138 of the Act.

Applying the test of law and the procedure prescribed under Sec. 138 and 142, it transpires from the record that after the cheques were

returned by the bank as unpaid, a notice was served upon the drawer of the cheques the petitioner herein, to make the payment within fifteen days.

There is nothing on the record to show as to why the petitioner opted not to reply the notice. Had the petitioner replied notice stating the

circumstances that the cheques were not issued for the discharge of any debt or liability or other attending circumstances how and in what

circumstances the cheques came to be in possession of the respondent, the argument of the learned counsel for the petitioner in such circumstances

would have been attractive and appealing for placing reliance upon the Explanation attached to Section 138 of the Act as to whether the debt or

other liability is legally enforceable or not. The mandate of section 139 of the Act raises statutory presumption in favor of the holder of the cheque

that the cheque of the nature referred to under sec. 138 of the Act is received by the holder for the discharge in whole or part of any debt or other

liability. It is well settled principle that in cases filed under Section 142 of the Act, the court has to entertain the complaint filed by the complaint, if

the allegation show that the proviso of section 138 and 142 of the Act have been complied with and the court is entitled to take cognizance of the

commission of the offence.

The Legislature has provided an opportunity to the drawer for making payment of the amount within fifteen days of the receipt of the said

notice under Section 138(c) of the Act and if he fails to meet the demand as per the notice within the statutory period of fifteen days of the receipt

of the said notice, a cause of action has accrued to the holder of the cheque to file a complaint under sub section (b) of Section 142 of the Act for

prosecution of the drawer of the cheque. The notice is a condition precedent for giving rise to cause of action. The complainant has issued the

notice to the petitioner and informed him in advance by means of the notice for filing complaint and prosecution. Despite the service of the notice,

when the payment has not been made by the petitioner the statutory presumption created by the legislature is that the cheque has been issued

against discharge of an enforceable liability.

It is a case where the complaint is to be investigated by the competent Magistrate and taking of the cognizance by the Magistrate and

continuation of the proceedings is no abuse of the process of law as the requirements of Section 138 read with Sec. 142 of the Act have been

complied with by the holder of the Cheque for prosecution of the drawer of the cheque. It is not for this court to go into the rival factual

contentions. It is neither desirable nor permissible under such circumstances to invoke the jurisdiction of the court under section 561A Cr.P.C., as

the proceedings initiated on a complaint require enquiry and trial. The petition of the petitioner is accordingly dismissed. File of the trial court be

returned forthwith for trial in the case under law.