Full Judgment Text
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PETITIONER:
K.K. SIDHARTHAN
Vs.
RESPONDENT:
T.P. PRAVEENA CHANDRAN AND ANOTHER
DATE OF JUDGMENT: 08/10/1996
BENCH:
G.N. RAY, B.L. HANSARIA
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
HANSARIA.J.
Respondent No.1, hereinafter referred to as the
respondent, filed a complaint against the appellant under
section 138 read with 149 of the Negotiable Instruments Act,
1881 (for short the ‘Act’) and section 420 of the IPC read
with sections 190 and 200 of the Code of Criminal Procedure.
The gravamen of the allegation is that the petitioner had
issued two post-dated cheques dated 10.10.1994 and
31.12.1994, each for a sum of Rs 3,00,000/- drawn on Indian
Overseas Bank, Trichur Branch. But on the cheques being
presented, the same were returned unpaid on 15.10.1994 with
the endorsement "Payment countermanded by the drawer". The
complaint further stated that the cheques were returned
unpaid for want of sufficient funds in the account. The
appellant approached the High Court of Kerala for quashing
the complaint but the High Court refused to do so. hence
this appeal.
2. The main part of Section 138 of the Act reads as below:
"138. Dishonour of cheque for
insufficiency of funds in the
account. - Whore 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, or 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
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punished with imprisonment for a
term which may extend to one year,
or with fine which may extend to
twice the amount of the cheques, or
with both."
This shows that section 138 gets attracted in terms if
cheque is dishonoured because of insufficient funds or where
the amount exceeds the arrangement made with the bank. It
has, however, been held by a Bench of this Court in
Electronics Trade and Technology Development Corpn, LTD, vs.
Indian Technologists and Engineers (Electronics) (P) Ltd.,
1996 (2) SCC 739, that even if a Cheque is dishonoured
because of ‘stop Payment’ instruction to the bank, section
138 would get attracted.
3. The case of the appellant is that the cheques were
returned, not because of insufficient funds, but because he
had issued stop memo to the bank for reasons detailed in the
letter of appellant’s Advocate dated 4.10.1994 addressed to
the respondent. This letter was replied by the respondent
on 12.10.1994 stating, inter alia, that the allegations made
in the letter of 4.10.1994 were not true; and date and place
may be fixed for perusal of the accounts and connected
records. The appellant has produced and connected records.
The appellant has produced A communication of the Indian
Overseas Bank, Thrissur, Branch, which is at page 64 of the
Paper Book, showing that when the cheques in question were
presented there was sufficient balance in the account of
the appellant. This communication bears the numbers of two
cheques which tally with those mentioned in the complaint.
we are therefore, satisfied that the cheques were not
returned because of insufficient funds, as is the allegation
in the complaint.
3A. It may be stated that the learned counsel for the
respondent filed a written submission, without having
obtained permission when the case has been finally heard and
reserved for judgment, on 7.10.1996 in which it has been
stated that the cheques in question were issued against
Account No. 562 of the petitioner, in which there was no
cover. The further submission is that the letter of the
Bank Manager which is at page 64 really.
5. From the facts mentioned above, we are satisfied that in
the present case cheques were presented after the appellant
had directed its bank to ’stop payment’. We have said so
because though it has been averred in the complaint that the
cheque dated 10.10.1994 was presented for collection on that
date itself through the bank of the respondent which is
Catholic Syrian Bank Ltd. from the aforesaid letter of the
Indian Overseas Branch, we find that the cheque was
presented on 15.10.1994 (in clearing). The lawyer’s notice
to the respondent being of 4th October, which had been
replied on 12th from Cochi, which is the place of the
respondent, whereas the Advocate who issued notice on behalf
of the appellant was at Thrissur, it would seem to us that
the first cheque had even been presented after the
instruction of ’stop payment’ issued by the appellant had
become known to the respondent.
6. The aforesaid being the position, we are satisfied that
no case under Section 138 of the Act has been made out and
we, therefore, quash the complaint. We may make it clear
that we have not addressed ourselves on the question whether
the respondent was in fact entitled to receive any amount
from the appellant.
7. The appeal is, therefore, allowed. In the facts and
circumstances of the case, we make no order as to costs.
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