Hardeo Prasad Sinha vs State Of Jharkhand And Ors

Heard Mr. Sumit Gadodia, counsel appearing on behalf of the petitioner.

This criminal miscellaneous petition has been filed for quashing of entire criminal proceeding pertaining to Complaint Case No.820 of 2012 including the order taking cognizance dated 29.1.2014 for alleged offence under Section 138 of Negotiable Instrument Act, 1881 so far as it relates to the petitioner, now pending in the court of learned Chief Judicial Magistrate, Bokaro.

Counsel for the petitioner submits that the cognizance in this case has been taken only under Section 138 of the Negotiable Instrument Act, 1881 against two accused persons including the petitioner. He submits that from the perusal of the complaint petition, it is the specific case of the complainant that the cheque was issued by the co-accused and not by the petitioner and as per the allegation, cheque was issued at the instance of the petitioner by the co-accused in presence of the complainant. Accordingly, he submits that no case under Section 138 of the Negotiable Instrument Act, 1881 is made out against the petitioner for which cognizance has been taken by the learned court below.

Counsel appearing on behalf of the opposite party no.2, does not dispute the legal position that a case under Section 138 of Negotiable Instrument Act, 1881 can be instituted only when the payee or the holder in due course of the cheque makes demand from the drawer of the cheque. However, he could not dispute the fact that as per the allegation made in the complaint petition itself, the cheque was not issued by the present petitioner and it is not the case of the complainant that the complainant was a holder in due course in relation to the cheque.

After hearing the counsel for the parties and after considering the materials on record, this Court finds that the learned court below while taking cognizance has clearly found a prima - facie case only under Section 138 of the Negotiable Instrument Act, 1881 against the named accused persons in the complaint petition, although, the petitioner had neither issued the cheque nor cheque was handed over by the petitioner to the complainant. It was the specific case of the complainant that the cheque was directly issued by the co-accused to the complainant at the instance of the accused and in presence of all the three persons and other witnesses i.e., complainant and both the accused. It is also not the case of the complainant that the cheque signed by the co-accused was ever handed over by the present petitioner to the complainant. The learned court below had also found that regarding other Section no corroborative and substantive evidence was found.

Section 138 of the Negotiable Instrument Act, 1881 reads as follows:

"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 be extended to two years], 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 thirty 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."

That holder in due course has been defined as follows:

"Holder in due course". - "Holder in due course" means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer,

Or the payee or indorsee thereof, if [payable to order,] before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title."

Considering the materials on record and the facts and circumstances of this case, as the cheque was alleged to be directly handed over by the co-accused to the complainant, though at the instance of the petitioner, the complainant was at best the payee of the cheque directly from the drawer of the cheque and thus no case under Section 138 of Negotiable Instrument Act, 1881 is made out against the petitioner as admittedly the petitioner is not the drawee of the cheque.

In the above facts and circumstances of this case, the entire criminal proceedings, as against the petitioner, pertaining to Complaint Case No.820 of 2012 including the order taking cognizance dated 29.1.2014 for the alleged offence under Section 138 of Negotiable Instrument Act, 1981 so far as it relates to the petitioner, pending in the court of learned Chief Judicial Magistrate, Bokaro, is hereby set-aside.