Bhagat Ram vs State of Punjab and Another

V.S. Aggarwal, J.—Bhagat Ram, the petitioner, had filed a complaint that the respondent, Subhash, had sold poplar trees for Rs. 1,37,880 out of which Rs. 30,500 were paid. For the balance amount, two cheques of Rs. 25,000 were given in favour of the petitioner. One cheque was encashed, while the other cheque dated August 4, 1989 was dishonoured on August 21, 1989. No complaint was filed in that regard. The respondent is alleged to have approached the petitioner and demanded some time to deposit the amount in the bank so that the cheque would be encashed. After waiting for some time, the petitioner presented the cheque for encashment but it was dishonoured on January 15, 1990. After serving the notice on January 30, 1990, the criminal complaint was filed.

The learned Chief Judicial Magistrate, Ropar, summoned the respondent with respect to the offence punishable u/s 138 of the Negotiable Instruments Act, 1881. The respondent, Bhagat Ram, filed a revision petition. The learned Additional Sessions Judge, Ropar, on September 28, 1992, accepted the revision petition and set aside the order passed by the learned Chief Judicial Magistrate holding that the complaint was not competent.

Aggrieved by the said judgment of the Additional Sessions Judge, Ropar, the present revision petition has been filed.

The whole controversy revolved with respect to section 138 of the Negotiable Instruments Act. The same is being reproduced below for the sake of facility ;

"138. Dishonour of cheque 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 provision 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 un-less-

(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."

On the strength of the said provisions, learned counsel for the respondents urged that once the cheque had been dishonoured and the petitioner had chosen to present the same again, in that event the provisions of section 138 of the Negotiable Instruments Act will not be attracted. In support of his argument, he relied upon the decision of this court in Gulshan Rai Vs. Darshan Lal, . In paragraph 4, it was concluded as under :

"Counsel for the petitioner in support of her arguments has relied upon the judgments in K.P.V. Textiles and Another Vs. Malook Chand Naresh Chand, and N. C. Kumaresan v. Ameerappa [1991] 3 RCR 172 : [1992] 74 Comp Cas 848 (Ker). In these judgments, it has been held by the court that no prosecution can be lodged against the accused on the basis of a cheque again presented, but not honoured as the complainant could not have a second cause of action on the same cheque. No judgment to the contrary has been cited by counsel for the respondent. In view of the aforesaid judgment, this petition deserves to be accepted."

However, the facts of the present case cannot be lost sight of. As at present, it has been asserted and also so stated in the preliminary evidence that the respondents had approached the petitioner and demanded some time for deposit of the amount so that the cheque may be encashed. If that is so, then it was an assurance to the petitioner to again present the same after some time. That being the position, the decision in the case of Gulshan Rai Vs. Darshan Lal, will not come to the rescue of the respondents. In fact, in the case of K.P.V. Textiles and Another Vs. Malook Chand Naresh Chand, it has been concluded that at no stage before the complaint, the accused had in writing requested the complainant to re-present the cheque or given an assurance that in case any such cheque was presented, the same could be encashed. The observation made clearly supports the finding arrived at above, that if the respondent had told the petitioner to the effect that he will deposit the amount after few days, this in fact was an assurance that the cheque may be presented after some time. This argument, for purposes of the present order on the basis of the evidence presented on the record, must fail.

This is not the end of the matter. Confronted with that position, my attention was being drawn to the fact that, in any case, the cheque had been dishonoured because 1he respondent had stopped payment and, therefore, the rigours of section 138 of the Negotiable Instruments Act would not be attracted. The ingredients of section 138 of the Negotiable Instruments Act had been explained in the case of Abdul Samad v. Satya Narayan Mahawar [1990] 17 CLT 180 : [1993] 76 Comp Cas 241 and paragraph 5 reads to the following effect :

"It will be seen the above section has the following main ingredients :

(i) The cheque is drawn on a bank for the discharge of any legally enforceable debt or other liability.

(ii) The cheque is returned by the bank unpaid.

(iii) The cheque is returned unpaid because the amount available in that account is insufficient for making the payment on the cheque.

(iv) The payee gives a notice to the drawer claiming the amount within 15 days of the receipt of the information by the bank.

(v) The drawer fails to make payment within 15 days of the receipt of notice."

The petitioner must bring his case within the four corners of the said ingredients. The said decision of the Single Bench of this court was relied on subsequently, in the case of Swaminathan v. State of Haryana [1994] 1 P LR 389 : [1996] 85 Comp Cas 5, 8. The conclusion, recorded in paragraph 6, is important and is being reproduced below for the sake of facility :

"Parliament in its wisdom has confined the offence referred to u/s 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 for other grounds, the same has not been brought within the mischief of an offence under the said section. The fact as to whether there were not sufficient funds in the account on the date of issuance of the cheque or on the date the cheque was presented becomes insignificant in a case where the drawer of the cheque issues instructions to his bank to stop the payment."

In the present case on hand, exhibit P-13 is the document produced by the petitioner himself which clearly indicates that the cheque when presented was returned with the endorsement "payment stopped by the drawer". In other words, the cheque was returned and not encashed not because of insufficient funds in the account of the respondent, but because the payment had been stopped. Two pronouncements of this court, therefore, come into play and I find no reason to take a different view.

Consequently, for the reasons recorded, the revision petition without merit must fail and is hereby dismissed.