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1998 DIGILAW 480 (MAD)

Indian Petro Chemicals Corporation Limited, Madras Sales, Centre, 33 D Silva Road, Mylapore, Chennai 600 004, rep. by Malini Shankar v. Nortan Polymer Limited, 15, Lakshmi Street, New Avadi Road, Kilpauk, Chen- nai-10, rep. by its Managing Director, Meganathan and another

1998-03-25

A.RAMAMURTHI

body1998
Judgment : 1. The complainant has preferred three appeals aggrieved against the order of acquittal passed by the XIII Metropolitan Magistrate in CC 106 to 108 of 1997 dated 8. 1997. 2. The case of the complainant in all the three appeals is as follows:- On 24. 1996 the accused issued three cheques each for an amount of Rs.4,84,335/-drawn on the Central Bank of India, Anna Nagar Branch towards business transactions between the complainant and the accused. They were deposited for realisation in the State Bank of India, Mount road Branch and they were returned dishonoured. The complainant issued a notice to the accused and they having received the same, have not chosen to pay the amount. Hence the complainant filed three complaints for an offence under section 138 of the Negotiable Instruments Act. 3. So far as C.A. No. 982 of 1997 is concerned, on 24. 1996 the accused issued three cheques each for an amount of Rs.4,84,335 and they were also dishonoured. So far as C.A. No. 983 of 1997 is concerned, on 24. 1996 the accused issued a cheque for an amount of Rs.4,94,172 and it was deposited for realisation on 210. 1996 and it was also dishonoured. The complainant in all the cases sent notice to the accused and only after complying with all the formalities, filed three complaints under section 138 of the Negotiable Instruments Act. 4. On the side of the complainant, three witnesses were examined and Exs.A1 to A12 were marked, on the side of the accused, two witnesses were examined and Exs.D1 to D6 were marked. The court below came to the conclusion in all the three cases that the accused are not guilty under section 138 of the Negotiable Instruments Act and they were acquitted under Section 255(1) of the Code of Criminal Procedure. 5. The complainant filed three complaints and all the three were dismissed and aggrieved against this, he has preferred three separate appeals. Since the question of law involved in all the three cases is similar, a common judgment is pronounced. 6. The learned counsel for the appellant contended that the court below was not justified in passing an order of acquittal. The learned Magistrate failed to appreciate that in two cases cheques were issued on 24. 1996 and in one case, cheque was issued on 24. 1996. In all the cases, cheques were presented on 210. 6. The learned counsel for the appellant contended that the court below was not justified in passing an order of acquittal. The learned Magistrate failed to appreciate that in two cases cheques were issued on 24. 1996 and in one case, cheque was issued on 24. 1996. In all the cases, cheques were presented on 210. 1996 well within six months period. The respondents did not have sufficient funds in the account. Moreover, the respondents had admitted in the letter dated 19. 1996 marked as Ex.A12 that they have consumed almost 90% of the material that was supplied by the Appellant and that they will make the payment in 5 to 6 weeks. The dispute regarding quality was raised as an afterthought by the respondents to avoid liability. They cannot escape liability under section 138 of the Negotiable Instruments Act by merely giving instruction to the bank to stop payment. The respondents having consumed almost the entire quantity of materials supplied by the appellant, the stop payment instruction issued to the Bank, can under no stretch of imagination protect the respondents from liability under section 138 of the Act. 7. It is admitted that the materials were purchased from the complainant, but since quality material was not sent, a dispute regarding quality of material arose between the parties. The accused had purchased HDPE material on a continuous basis from the complainant and towards the payment, cheques were issued. The issue of various cheque in all the three cases was not in dispute. It is also necessary to point out that these cheques were presented for encashment and they were dishonoured on two grounds namely, want of funds and out of date. 8. Learned counsel for the appellant contended that having received the materials and under Ex.A.12 it is manifestly clear that they have substantially used the materials and agreed to pay the amount in a period of five or six weeks. Under the circumstances, the dispute regarding the quality is irrelevant. Further more, when once it is admitted that they have issued cheques relating to the existing liability, it is a sufficient cause of action to proceed under section 138 of the Negotiable Instruments Act. 9. Under the circumstances, the dispute regarding the quality is irrelevant. Further more, when once it is admitted that they have issued cheques relating to the existing liability, it is a sufficient cause of action to proceed under section 138 of the Negotiable Instruments Act. 9. The learned counsel for the complainant further stated that no doubt, the accused sent a communication not to present the cheques for encashment and because of this only, the court below relying upon Sidharthan, K.K. v. T.P.Praveena Chandran, 1997 (1) CTC 54 came to the conclusion that the offence under Section 138 of the Negotiable Instruments Act is not made out and under the circumstance, they were acquitted. Subsequently, the Apex Court in M/s.Modi Cements Limited v. Shri Kuchil Kulmar Nandi, 1998 (I) CTC 402 : JT 1998 (2) SC 198 has observed as follows: "Once the cheque is issued by the drawer a presumption under section 139 must follow and merely because the drawer issues a notice to the drawee or to the Bank for stoppage of the payment it will not preclude an action under section 138 of the Act by the drawee or the holder of a cheque in due course." In view of the latest decision of the Apex Court, I am of the view that the acquittal of the accused on the ground that the accused had sent a communication to the bank to stop payment will not be a valid ground to come the conclusion that they are not guilty under section 138 of the Negotiable Instruments Act. 10. In the next contention put forward by the learned counsel for the accused is that the cheques were not presented in time to the bank by the complainant and because of that only, it was returned on the ground that they were presented out of time. If that be so, no offence under section 138 is made out. It has been held in Om Prakash v. Gurcilaran Singh, 1997 (3) Crimes 433 that "for a complaint under section 138 of Negotiable Instruments Act, cheque must be presented to bank on which it is drawn within 6 months of date cheque is issued." There is no dispute about this proposition. Admittedly, in two cases cheques are dated 24. 1996 and in one case the cheque is dated 24. 1996. Admittedly, in two cases cheques are dated 24. 1996 and in one case the cheque is dated 24. 1996. It is necessary to state that in all the cases admittedly, the cheques were presented for encashment on 210. 1996 itself. This being so, it cannot be said that the cheques were presented after the expiry of the six months period. When once it is admitted that the cheques were presented for encashment even on 210. 1996 in all the cases, it can be safely concluded that the cheques were presented within a period of six months from the date of issue. Hence, the return as out of date by the bank authorities is also not proper and correct and the acquittal of the accused on this ground also is improper. It appears that the court below has dismissed all the three cases mainly based upon the decision in K.K. Sidharthan v. T.P. Praveena Chandran and another, 1996 SCC (Crl.) 1340 : 1997 (1) CTC 54, wherein it is stated that if the instruction was given to stop payment and even thereafter if the cheque was presented for encashment and returned on any ground, no offence under section 138 is made out. Similary, the accused also relied upon M/s.Mahaplasto Limited and others v. Bhusan Steels and Strips Limited, 1997 (2) Crimes 436 relating to the same proposition. But after the decision of the Apex Court reported in, M/s.Modi Cements Limited case, 1998 (I) CTC 402 : JT 1998 (2) SC 198, they have no application to the facts on hand. Under the circumstance, there is no difficulty in coming to the conclusion that the order of acquittal passed by the court below in all the three cases is not proper and correct. When once the legal liability is admitted and for which, the cheques were used and thereupon they were dishonoured, then the offence under section 138 of the Negotiable Instruments Act is made out against all the accused concerned in the case. 11. In the result, all the appeals are allowed and the order passed by the court below in all the three cases are set aside and the matter is remitted back to XIII Metropolitan Magistrate, Egmore, Madras to dispose the cases on merit after hearing the parties relating to the sentence. 11. In the result, all the appeals are allowed and the order passed by the court below in all the three cases are set aside and the matter is remitted back to XIII Metropolitan Magistrate, Egmore, Madras to dispose the cases on merit after hearing the parties relating to the sentence. The court below is directed to dispose of the cases in a period of two weeks from the date of receipt of a copy of this order.