N. Arumugham vs M.K. Ponnusamy

Thangamani, J.—The petitioner is the accused in S. T. C. No. 3139 of 1991, on the file of the learned Judicial Magistrate, Mettupalayam.

The respondent herein filed the complaint stating that on June 27, 1991, the petitioner gave a post-dated cheque bearing the date September 1,

1991, and when it was presented for collection on September 5, 1991, it was returned with an endorsement ""Effects not yet cleared, please

present again."" The respondent informed the petitioner about the return of the cheque. On the request of the petitioner, the respondent again

presented the cheque for collection on September 23, 1991. The same was returned on September 24, 1991, with an endorsement ""payment

stopped by the drawer"". Thereupon, the respondent sent a notice dated September 28, 1991, to the petitioner informing about the return of the

cheque. On receipt of the notice, the petitioner gave a reply on October 4, 1991. The petitioner has also not made any arrangement to pay the

money covered by the cheque. So, the respondent preferred the impugned complaint on November 20, 1991.

The petitioner now seeks to quash the complaint on the ground that no offence is made out against him u/s 138 of the Negotiable Instruments

Act (hereinafter referred to as ""the Act""). Learned counsel for the petitioner submits that to constitute an offence u/s 138 of the Act, the cheque

should have been returned by the bank unpaid either because the amount of money standing to the credit of that account is insufficient to honour

the cheque, or because it exceeds the amount arranged to be paid from that account by an agreement made with that bank. In the present case, the

cheque has not been returned for either of these two reasons. Instead, the cheque was not honoured for the reason that the drawer has stopped

payment. So no offence is made out. R. Jayalakshmi v. Rashida [1991] LW (Crl.) 602; [1992] 74 Comp Cas 841 was relied on by learned

counsel to fortify his contention. There it was argued before Pratap Singh J. that where the cheques were returned unpaid with the endorsements

refer to drawer"" and ""payment countermanded by the drawer"", the reason of referring to the drawer has been pinpointed in the endorsement itself,

viz., that payment was countermanded by the drawer and such a case would not come within the ambit and scope of section 138 of the Negotiable

Instruments Act. Upholding the contention that in that case the allegations made in the complaint itself do not make out the offence u/s 138 of the

Act, the petition to quash the proceeding was allowed. But, in the case on hand, it cannot be said that the complaint prima facie does not disclose

any offence. Here when the cheque was returned on the second occasion with the endorsement ""payment stopped by the drawer"", there is no

indication that the return was not due to insufficiency of funds or exceeding the amount arranged to be paid. It could be seen only during the course

of trial whether the cheque was returned unpaid due to insufficiency of funds as pleaded in the complaint, or otherwise. At this stage, the court will

not be justified in embarking upon an enquiry as to the genuineness or otherwise of the allegations made in the complaint.

In Binary Systems P. Ltd. v. Nobel Power Pvt. Ltd. [1992] L. W (Crl.) 307, the cheque was returned on the first occasion with an

endorsement ""exceeds arrangement"". The complainant informed the accused about the dishonour of the cheque. At the request of the accused, the

cheque was re-presented after ten days. Again, it was returned with endorsement ""stop payment"". The complainant sent a letter to the accused

informing of the return of the cheque and demanding payment. The accused had received that letter, but had not paid the money. It was contended

before Pratap Singh J. that the cheque was not returned due to insufficiency of funds or that it exceeded the amount arranged to be paid, and

hence the offence u/s 138 of the Act was not committed, the learned single judge took the view that there were positive allegations in the complaint

to the effect that only due to insufficiency of funds the cheque was returned but the accused had acted diabolically and the cheque was returned

with the endorsement ""stop payment"". So, it is to be seen only during the course of trial whether the cheque was returned unpaid due to

insufficiency of funds. And the complaint cannot be quashed at the threshold.

So, u/s 482 of the Criminal Procedure Code, this court cannot go into disputed questions of fact and those matters are to be proved at trial. As

pointed out in Janata Dal Vs. H.S. Chowdhary and Others, , the criminal courts are clothed with inherent power to make such orders as may be

necessary for the ends of justice. Such power, though unrestricted and undefined, should not be capriciously or arbitrarily exercised, but should be

exercised in appropriate cases, ex debito justitiae to do real and substantial justice for the administration of which alone the courts exist. The

powers possessed by the High Court u/s 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise.

Courts must be careful to see that their decisions in exercise of this power are based on sound principles. The inherent power conferred by section

482 should not be exercised to stifle a legitimate prosecution. The High Court being the highest court of a State should normally refrain from giving

a premature decision in a case wherein the entire facts are extremely incomplete and hazy.

With these observations, this petition is dismissed. The registry is directed to send back the records to the trial court expeditiously.