V.D. Vinodhan vs A.H. Krishnan

Pratap Singh, J.—The accused in C.C. No. 129 of 1990 on the file of the Judicial Magistrate No. VII, Coimbatore, has filed this petition u/s

482 of the Criminal Procedure Code, 1973, to call for the records and quash the same.

The short facts :

The respondent has filed a private complaint against the petitioner for an offence u/s 138 of the Negotiable Instruments Act, 1881 (hereinafter to

be referred to as ""the Act""). The allegations in the complaint are briefly as follows :

The complainant is a manager of the firm, Indian Commercial Syndicate. The accused had transactions with the complainant and had a balance of

Rs. 69,758 payable to the complainant during the transaction. On November 30, 1989, the accused issued two cheques in favour of the

complainant''s firm, each for Rs. 25,000. The complainant presented the said cheques for encashment on November 30, 1989. Both the cheques

were returned by the bank on December 19, 1989, with an endorsement ""payment stopped by the drawer"". The accused issued the above

cheques knowing fully well that sufficient amount was not lying in his account. With a view to escape from his liability, the accused informed his

bank to stop payment. Having issued the cheques, the accused had purposely allowed the same to be dishonoured. On December 19, 1989, the

complainant issued the statutory notice to the accused to make payment for the cheque amount within seven days from the date of that notice. The

accused received the notice on December 20, 1989. He has sent a reply containing false allegations. He has not settled the amount. Hence, the

complaint.

This petition is filed to quash the above complain.

Mr. B. Ramamoorthy, learned counsel appearing for the petitioner, would submit that no debt was due to the complainant by the accused and

only in cases where there is a legally enforceable liability or debt and towards the same, the cheque was issued, it can form the basis for an offence

u/s 138 of the Act and that is not the case here. Learned counsel would further submit that this is a case of stop payment and that only in a case

where the cheque was returned for the reason of insufficient funds or exceeds arrangement, the offence would be committed and not in a case like

this. Since, there was no representation on behalf of the respondent, I requested Mr. Raja, the learned Government advocate, to study the papers

and put forth his submissions and I have heard him.

I have carefully considered the submissions made by learned counsel. To consider the first submission that there was no legally enforceable debt

or liability in respect of which the cheque was issued, I have to refer to the relevant allegations made in paragraphs III and IV of the complaint. In

it, it is alleged that the accused had transactions with the complainant and that the accused had a balance of a sum of Rs. 69,758 payable to the

complainant during the transactions. It is further alleged that the accused on November 30, 1989, issued two cheques to the complainant firm for

Rs. 25,000 each. A joint reading of the allegations made in paragraphs III and IV of the complaint would show that the cheques were issued

towards the above dues. If, actually, there were no dues, that could be put forth only during the trial by producing evidence in that regard. That

stage would come, only at the time of the trial. At this stage, we are concerned only with the allegations made in the complaint. In the complaint,

there are allegations to the effect that the cheques were issued for the legally enforceable debt. So, the first submission fails.

I shall now pass on to the second submission that this is a case of stop payment by the drawer and hence the offence is not made out. To

consider this submission, the relevant portions in paragraph VI of the complaint needs reproduction and it reads as follows :

VI. To the complainant''s surprise both the cheques were returned by the said bank on December 19, 1989; with an endorsement ''payment

stopped by the drawer. The complainant submits that the accused issued the above cheques knowing fully well that sufficient amount was not lying

in his account. The accused, with a view to escape from his liability, informed his bank for stop payment .....

I shall refer to the ruling already rendered in this regard touching upon the said grounds, in Jayanthi v. Ramasamy [1994] MLJ (Cri.) 112. In that

case also, the cheque was returned on the ground ""payment stopped by the drawer"". In that case, the relevant allegations in the complaint are as

follows :

The complainant submits that he was put to shock on receipt : of the dishonour intimation through his banker, which was received by him on

December 1, 1992; since the accused cleverly sent intimation to her banker to stop payment of both the cheques, even though at the time of

sending such intimation, the accused has no funds to meet the amount of the cheques. Both the cheques were returned to the complainant, on the

ground that payment stopped by the drawer.

The question that fell for consideration was whether on the above allegations, the complaint could be quashed at the threshold. I have held that it

cannot be quashed and the said submission was not accepted and was rejected. The allegations made in this complaint are almost similar and so

that ruling is applicable to the facts of this case.

In Binary Systems P. Ltd. v. Noble Power P. Ltd. [1992] LW (Cri.) 307, a similar question came up for consideration. In that case, there were

positive allegations in the complaint to the effect that only due to insufficiency of funds, the cheque was returned but diabolically the accused had

acted and the cheque was returned with the endorsement ""stop payment"". On those allegations, it was held that it is to be seen only during the

course of the trial whether the cheque was returned unpaid due to the insufficiency of funds as alleged in paragraph IV of the complaint or

otherwise and when there are positive allegations to the effect in the complaint that the cheque was returned due to insufficient funds, those

allegations cannot be ignored and the complaint cannot be quashed at the threshold. In view of the above ruling, the submission made by Mr. B.

Ramamoorthy cannot be accepted.

Mr. B. Ramamoorthy would further submit that in this case, even before the presentation of the cheque, the advocate of the accused had sent a

notice on December 1, 1989, in which he has stated that the accused had instructed his bankers to stop payment of the above cheques, since there

was no amount due to him and in view of this fact, this case stands on a different footing. He would further submit that reference to this notice

dated December 1, 1989, has been made in the notice dated January 2, 1990, which was sent by the complainant to the accused. In that notice,

dated January 2, 1990, it is stated that the lawyer''s notice dated December 1, 1989, is intended for defrauding the complainant and that the same

was issued with an ulterior motive. In view of the positive allegations made in the complaint, extracted above, it is to be seen only during the course

of the trial whether the cheque was returned for the reason stated in the complaint ar for the reason that there were no sufficient funds in the

account of the drawer of the cheque. Hence, on this submission, the proceedings cannot be quashed at the threshold.

Since none of the submissions made by learned counsel for the petitioner, Mr. B. Ramamoorthy, finds acceptance with me, the petition fails

and shall stand dismissed.