M/s Nalam Nageshwar and Co. vs Fungicides (India) Ltd.

Hon'ble Mr. Mohammad Yaqoob Mir, Judge

By medium of this petition quashment of the proceedings as well of the complaint is prayed for.

The respondent company has its registered office at 7/1 Sheikh Bagh Srinagar. The said company, among others, is stated to be dealing in

trading and manufacture of fungicides/pesticides. The company has its principle administrative office at H-88, Vidya Palace, South Extension, Part-

1, New Delhi-110049 and the company has its offices/representatives/ dealers at various places in India.

Petitioner (accused) is alleged to be liable to make payments to the respondent company so is stated to have issued cheque bearing No.647394

on 10.8.2001 for an amount of Rs.17,64,826/ drawn on Karnataka Bank Limited, Guntur - 522 003. Respondent company claim to have

presented the same before the UCO Bank, Budshah Chowk, Srinagar on 10.8.2001, same had been send for clearance to the drawee bank i.e.

Karnataka Bank Limited, Guntur which was returned along with a memo dated 04.09.2001 i.e. cheque has been dishonoured for the reasons

account closed"". On the same date cheque has been returned to the complainant.

The respondent company is stated to have issued demand notice for the payment and send to the petitioner (accused) under registered postal

cover on 13.9.2001. When payment was not made within the period specified, the respondent company filed complaint u/s 138 of Negotiable

Instruments Act before the Court of Judicial Magistrate 1st Class(Forest Magistrate), Srinagar on 11.10.2001. On the same date trial court has

taken cognizance and process has been issued.

Perusal of the trial court record would reveal that right from 11.10.2001 till date progress of the case is still at infancy stage as the petitioner

(accused) did not appear. Finally warrant has been issued for procuring the presence of petitioner(accused) on 30.03.2011. It is only thereafter

instant petition u/s 561-A Cr. P. C has been filed.

Learned counsel for the petitioner(accused) first contended that a blank cheque was issued in favour of the respondent (complainant) as a

security, same was not for payment, however, the respondent company has filled blanks of the cheque and has thereafter presented the same for

its payment

The plea as raised is a question of fact so can be gone into only during trial. Such ground is not available for exercise of power u/s 561-A Cr. P.

C.

Next learned counsel projected that the respondent company has committed a fraud because notice to the petitioner(accused) has been given in

the new name i.e.""Fill Industries Ltd"" when the complaint has been filed in the old name of the company i.e. Fungicides (India) Ltd.

This contention is of no substance because in the notice as has been issued, copy of which is available on the file, it is clearly indicated that the

notice has been issued for Fungicides (India) Ltd (now known as Fill Industries Ltd.). Apparently it has got no effect as no element of fraud at this

stage is discernible but still it shall be open for the petitioner (accused) to project before the trial court by way of defence.

Next it is contended that the petitioner(accused) had closed account in the Karnataka Bank Ltd. Guntur on 27.12.1999 and same was

conveyed to the respondent company.

Same again is a question to be gone into during trial because at this stage cheque as is available on the records is shown to have been issued on

10.8.2001. If the petitioner (accused) had closed the account, then cheque should not have been issued on 10.8.2001. In the context of first

objection as dealt with hereinabove, it again is a matter to be looked into during trial.

Next it is contended that the cheque was a security cheque, even otherwise it was drawn on Karnataka Bank Ltd. Guntur, so could be

presented to the same bank.

Next it is also contended that assuming that the cheque has been issued on 10.8.2001 at Hyderabad, how could it be presented on the same

date before the UCO Bank, Budshah Chowk, Srinagar.

From the perusal of the cheque, it is not clear that the same has been issued at Hyderabad. Again it is a question to be looked into during trial.

Next learned counsel relied on the judgment of the Hon'ble Apex Court rendered in Ishar Alloy Streels Ltd. V. Jayaswals Neco Ltd (2001(2)

Civil LJ 59 (SC). The said judgment is of no help to the petitioner because in the said judgment it has been held that the non presentation of the

cheque to the drawee bank within the period specified in the Section would absolve the person issuing the cheque of his criminal liability u/s 138 of

the Act, who otherwise may be liable to pay the cheque amount to the payee in a civil action initiated under the law. A combined reading of

Sections 2, 72 and 138 of the Act would leave no doubt in our mind that the law mandates the cheque to be presented at the bank on which the

cheque is drawn, whether presented personally or through another bank, namely, the collecting bank of the payee.

In the reported case, the cheque was not presented before the drawers bank within the statutory period of six months and it is in that fact

situation it has been held that the criminal court had no jurisdiction to issue the process.

In the case in hand the cheque is dated 10.8.2001, same as per complaint is shown to have been presented before the collecting bank of the

payee i.e. UCO Bank on the same date. Same has been presented through the collecting bank to the drawer bank i.e. Karnataka Bank Ltd.

Guntur and the said drawer has in the memo dated 27.8.2001 mentioned that the cheque is returned for the reason ""account closed"". The said

memo is stated to have reached to the collection bank of the payee on 4.9.2001 and complaint has been lodged on 11.10.2001 which would

mean that the cheque has been presented to the drawers bank within one month of the date of issue of the cheque, so the bar of statutory period of

six months does not operate. Therefore, contention raised by the learned counsel that the cheque was necessarily to be presented not through the

collecting bank but to the drawers bank directly, is not tenable. However, it is clear that the cheque must be presented to the drawers bank

through whatever mode but within six months from the date of issue of the cheque.

Lastly learned counsel contended that the Court at Srinagar has no jurisdiction to entertain the complaint. This submission is also to be rejected

in view of the judgment rendered by the Hon'ble Apex Court in the case K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, . Para 14 and

15 are quoted here-under:

The offence u/s 138 of the Act can be completed only with the con-catenation of a number of acts. Following are the acts which are

components of the said offence: (1) Drawing of the cheque, (2) Presentation of the cheque to the bank, (3) Returning the cheque unpaid by the

drawee bank, (4) Giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make

payment within 15 days of the receipt of the notice.

It is not necessary that all the above five acts should have been perpetrated at the same locality. It is possible that each of those five acts could

be done at 5 different localities. But concatenation of all the above five is a sine qua non for the completion of the offence u/s 138 of the Act.

In the instant case cheque has been presented by the payee in his collecting bank at Srinagar, notice of demand has also been issued from

Srinagar, so the concatenation which are not exhaustive for fixing the jurisdiction are satisfied, therefore, trial court has jurisdiction.

Enough is enough. The complaint is pending for last 11 years. Expeditious disposal of the same shall be in-keeping with the canons of justice.

Trial court shall proceed in the matter with convenient speed by scheduling the case in a manner so as to ensure disposal within the shortest

possible period.

The petitioner(accused) has to come from Andra Pradesh, it may not be convenient for him to appear before the trial court on each and every

date of hearing. The trial court shall consider their motion for dispensing with personal appearance subject to appearance through counsel or

authorized agent and subject to the condition that when the presence shall be indispensable, they shall remain present in the court.

While summing up what emerges is that the petition is found to be devoid of merit, as such, dismissed along with connected CMP.

Copy of the order along with trial court record be sent back forthwith where the learned counsel for the parties shall advise the parties to be

present on 21st of December, 2011.