R. Jayalakshmi vs Rashida

Pratap Singh, J.—The accused in C.C. No. 1481 of 1991 to C.C. No. 1484 of 1991 on the file of the Judicial Magistrate No. II,

Poonamallee, has filed these petitions u/s 482, Criminal Procedure Code, praying for calling for the records in the aforesaid cases and to quash the

same.

The respondent in Criminal Original Petition No. 2778 of 1991 had filed the private complain in C.C. No. 1481 of 1991 against the petitioner,

arraying her as the accused for offences u/s 138, Negotiable Instruments Act. The allegations in it are briefly as follows :

The accused had dealings with the complainant. She had issued a cheque dated August 20, 1990, for Rs. 60,550.18 for the goods purchased by

her on July 5, 1990, from the complainant. The complainant presented the cheque on September 15, 1990, for encashment. She was informed by

a communication dated September 18, 1990, by her bank that the cheque was returned unpaid with an endorsement ""refer to drawer"" and

payment countermanded by the drawer"". The accused did not have funds in the bank. On account of the same, the cheque was returned. The

accused had intentionally issued the cheque to defraud the complainant without having sufficient funds. She sent a notice dated September 20,

1990, to the accused giving notice of dishonour and demanding payment. The accused has not chosen to comply with the demand of the

complainant. The allegations in the reply sent by the accused that the goods were defective is false. The accused had not paid the amount within the

period of 15 days. Hence the complaint.

In Criminal Original Petition No. 2779 of 1991, the respondent has filed a private complaint against the petitioner for an offence u/s 138 of the

Negotiable Instruments Act, in C.C. No. 1482 of 1991 on similar allegations with regard to the cheque dated September 20, 1990, for Rs.

48,833.75 which when presented for encashment was returned with an endorsement ""refer to drawer"" and ""payment countermanded by the

drawer"". After giving the statutory notice and on non-payment of the amount, that complaint has been laid. In Criminal Original Petition No. 2780

of 1991, the respondent has filed a private complaint against the petitioner in C.C. No. 1483 of 1991 for an offence u/s 138 of the Negotiable

Instruments Act on similar allegations. In respect of the cheque dated August 25, 1990, for Rs. 27,763.10, in Criminal Original Petition No. 2781

of 1991, the respondent has filed a private complaint in C.C. No. 1484 of 1991 against the petitioner for an offence u/s 138 of the Negotiable

Instruments Act on similar allegations, in respect of the cheque dated September 15, 1990, for Rs. 44,488.72.

Mr. V. K. Sridharan, learned counsel appearing for the petitioner, would contend that, as per section 138 of the Negotiable Instruments Act,

only in a case where the cheque was returned unpaid on the ground of insufficient funds or it exceeds the amount arranged to be paid, is an offence

u/s 138, Negotiable Instruments Act, made out and the cases on hand are not like that and hence an offence u/s 138, Negotiable Instruments Act

is not made out, and on that ground, the complaints are liable to be quashed.

Per contra, Mr. Ashok Menon, learned counsel appearing for the respondent, would contend that the allegations made in the complaint are

sufficient to make out an offence u/s 138, Negotiable Instruments Act.

For appreciating the rival contentions of both learned counsel, the material portion of section 138 of the Negotiable Instruments Act needs

extraction. It reads as follows :

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.

A plain reading of section 138 of the Act would clearly indicate that only in those two contingencies, viz., when the cheque was returned unpaid

because of insufficiency of funds and/or it exceeds the amount arranged to be paid is an offence committed. In cases where the cheque is returned

unpaid with the endorsement ""refer to drawer"", it has been held by this court that the endorsement ""refer to drawer"" is an euphemistic way of

informing the payee that the drawer of the cheque has got no amount to his credit to honour the cheque. Such is not the case here. In all the

complaints, the cheques were returned unpaid with the endorsements ""refer to drawer"" and ""payment countermanded by the drawer"". So, the

reason for ""referring to the drawer"" has been pinpointed in the endorsement itself, viz., that payment was countermanded by the drawer. Such a

case would not come within the ambit and scope of section 138, Negotiable Instruments Act.

Learned counsel for the respondent would rely upon the ruling in State of Bihar Vs. Murad Ali Khan and Others, , wherein the apex Court has

held that, in proceedings u/s 482, Criminal Procedure Code, the High Court has only to see whether a complaint prima facie disclosed the alleged

offence and that it cannot go into the question whether the offence could be established by evidence or not. In the instant case, the allegations made

in the complaint itself do not make out the offence u/s 138, Negotiable Instruments Act, as long as the cheque was not returned for the reasons

mentioned in section 138 of the Act which I have reproduced above.

In view of the above, all the petitions are allowed and proceedings in C.C. No. 1481 of 1991 to C.C. No. 1484 of 1991 on the file of the

Judicial Magistrate No. II, Poonamallee, which are now pending before the IX Metropolitan Magistrate, Saidapet, Madras, are hereby quashed.