K. Manikyam vs Smt. P. Parvathi and Another

V.V.S. Rao, J.—The petitioner is accused in C. C. No. 431 of 2002 on the file of the court of the VI Metropolitan Magistrate, Hyderabad. The learned magistrate took cognizance of the case u/s 138 of the Negotiable Instruments Act, 1881, (for short, "the Act") as amended by the Banks, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988. In this petition, the petitioner seeks quashing of the said calendar case on the ground that no offence u/s 138 of the Act is disclosed in the complaint filed by the first respondent on the file of the court of the VI Metropolitan Magistrate where C. C. No. 431 of 2002 is pending adjudication.

The fact of the matter is this. The husband of the first respondent and the accused are friends. The accused requested the husband of the first respondent by name Janardhana Rao to join as a member of chit in M/s. Vishishta Finance and Chit Fund Co. Ltd., Warangal. Janardhana Rao joined in Chit No. VFCIP-IA/31 in October 1994 of the value of Rs. 2,00,000 (Rupees two lakhs only) for a period of fifty months on monthly subscription of Rs. 4,000 per month. He paid monthly subscription without committing any default and never bid in the auction in the prize chit. After completion of the chit period, Manikyam issued a cheque on behalf of his wife and sons bearing No. 554230 dated April 4, 2002, towards part payment amount of Rs. 1,00,000. The cheque was drawn on State Bank of India, Hanamkonda Branch. The complainant presented the cheque to the bankers but the same was returned on April 9, 2002, for want of funds. Subsequently, on a request made by the accused, the cheque was presented again on April 30, 2002, to Bank of Baroda, Tilaknagar, Hyderabad. On May 6, 2002, the cheque was again returned with an endorsement "insufficient funds". The same was received by the complainant on May 10, 2002. In spite of issue of notice u/s 138 of the Act, the accused did not deposit the funds, but issued a reply dated May 24, 2002, denying the liability. Hence, the criminal case was filed. Learned VI Metropolitan Magistrate, Hyderabad, took cognizance of the case and issued summons to the petitioner/accused, aggrieved by which the present petition u/s 482 of the Code of Criminal Procedure, 1973, is filed.

Learned counsel for the petitioner, Sri Vinod Kumar Deshpande, contends that the cheque in realisation of which offence is said to have been alleged is time-barred cheque and therefore Section 138 of the Act is not attracted. Secondly, he would urge that the cheque in question was allegedly on behalf of one Vijaya Balarama Raju who promised to deposit the amount of Rs. 1,00,000 and therefore the liability cannot be fastened on the petitioner. Lastly he would urge that there was no legally enforceable debt in discharge of which the cheque was given and therefore the criminal case filed against the petitioner is gross abuse of process of court.

Opposing the application learned counsel for the first respondent/complainant Mr. T. Venkat Reddy submits that the chit business was run by the sons and wife of the petitioner in association with other partners, that the petitioner gave an understanding to pay the chit amount and gave a cheque on behalf of his wife and sons who are directors of the above chit fund company for Rs. 1,00,000 and when the petitioner has issued cheque to discharge debt, offence u/s 138 of the Act is attracted. He would further urge that whether the petitioner does not owe any liability or obligation to discharge the debt and whether Vijaya Balarama Raju promised to deposit the amount and failed to do so as a result of which the cheque was dishonoured are all matters which are questions of facts to be decided by the criminal court. According to learned counsel, these matters cannot be decided in a petition u/s 482 of the Criminal Procedure Code for quashing.

It is axiomatic that inherent powers of the High Court saved by Section 482 of the Criminal Procedure Code are unbounded and limitless. It is intended to prevent abuse of process of the court by those who invoke jurisdiction of the criminal courts. It is also intended to secure ends of justice. If an order of quashing by the High Court fails to achieve these twin purposes, the jurisdiction cannot be exercised to quash a criminal case which prima facie disclosed the commission of offence. All other submissions by the accused by way of defence or by way of impeaching evidence produced by the complainant cannot be put in issue in a petition u/s 482 of the Criminal Procedure Code. It is now also well-settled that mere allegation of malice on the part of the complainant or informant is no ground to quash the FIR/criminal case.

In so far as the offence u/s 138 of the Act is concerned, the moment a person issues cheque in discharge of a debt or other liability to another person and in the event of such cheque being dishonoured for want of sufficient funds or the cheque exceeds the amount arranged to be paid, offence u/s 138 of the Act is attracted. The phrase "... for payment of any amount of money for another person. . . for the discharge, in whole or in part, of any debt or other liability. . . "must be given broad meaning. It not only speaks of "debt", but also "other liability". In this case, admittedly, the petitioner gave a cheque on behalf of his wife and sons, who are directors of the chit fund company and therefore it has to be said that the cheque was issued to discharge "other liability". Non-deposit of funds by Vijaya Balarama Raju and the said non-deposit being the reason for dishonour of the cheque is matter of agreement or understanding between drawer of the cheque and payee of the cheque which is matter of evidence, and cannot be subject matter of a petition u/s 482 of the Criminal Procedure Code. As held by the Supreme Court in S.A. Nanjundeswara Vs. M.S. Varlak Agrotech Pvt. Ltd., when the criminal complaint makes out an offence u/s 138 of the Act, it would not be proper for the High Court to quash criminal case u/s 138 of the Act. This court also observes that in the facts and circumstances of this case whether the cheque was time-barred and whether the criminal case u/s 138 is maintainable in relation to a cheque which is time-barred are all matters which the accused has to raise before the criminal court.

In M.M.T.C. Ltd. and Another Vs. Medchl Chemicals and Pharma (P) Ltd. and Another, , it was held that even where the complaint u/s 138 of the Act is presented to a criminal court any defects therein can be rectified at a subsequent stage and only on that ground the case cannot be quashed. The Supreme Court also reiterated that inherent powers do not confer arbitrary jurisdiction on the court to embark upon enquiry as to the reliability or genuineness or otherwise of the allegations made in the criminal complaint. It was also laid down that the power of quashing criminal proceedings should be exercised very sparingly and with circumspection.

In the result, for the above reasons, the criminal petition is devoid of merit and is accordingly dismissed.