G. Raja Ram v. State OF A. P. , through Public Prosecutor, High Court of A. P.
2003-12-29
C.Y.SOMAYAJULU
body2003
DigiLaw.ai
C. Y. SOMAYAJULU, J. ( 1 ) SECOND respondent filed C. C. No. 252 of 2003 against the petitioners for an offence under Section 138 of the Negotiable instruments Act (the Act) alleging, that he, as a contractor, undertook the cable laying work advertised by the petitioners, for which an amount of Rs. 1,58,776. 00 was due to him, for which petitioners had issued a cheque bearing No. 683707 dated 19-04-2003 drawn on Indian Overseas Bank, Kodambakkam, chennai to him. When he presented the said cheque for collection on 21-04-2003 in pinakini Grameena Bank, Kavali, it was returned with an endorsement payment stopped by the drawer , and so he issued a statutory notice to the petitioners intimating them about the dishonour of the cheque and making demand for payment of the amount covered by the cheque, but petitioners did not make the payment, and thus they committed an offence under Section 138 of the Act. This petition is filed to quash the said complaint. ( 2 ) THE contention of the learned counsel for petitioners is since petitioners, who are the Senior General Manager and Manager of telecommunications Consultants India limited (the Company), a Government of india Enterprise, did not act in their individual capacity while issuing the cheque in question and acted in their official capacity as the officers of the Company, the complaint filed against them in their individual capacity is not maintainable. His second contention is that since the cheque in question was not issued in discharge of a legally enforceable debt due to the second respondent from the petitioners, the complaint against the petitioners is liable to be quashed. His third contention is that there is no valid notice under Section 138 of the Act inasmuch as the notice is issued with a demand for payment of an amount of Rs. 1,58,776 / - after the second respondent received Rs. 39,750. 00 by way of a demand draft on 25-04-2003, in full settlement of the amount due to him. His next contention is that since the cheque was not honoured not because of want of funds in the account but because of its being countermanded, no offence under Section 138 of the Act is committed by the petitioners. He placed strong reliance on M. M. T. C. Ltd. and another v. Medchal Chemicals and pharma (P) Ltd. and another and K. R. Indira v. Dr.
He placed strong reliance on M. M. T. C. Ltd. and another v. Medchal Chemicals and pharma (P) Ltd. and another and K. R. Indira v. Dr. G. Adinarayana in support of the contentions raised by him. Heard the learned additional Public Prosecutor. ( 3 ) IN State of Haryana v. Bhajanlal the supreme Court laid down the principles for quashing a complaint or FIR. The Supreme court in State of Karnataka v. Devendrappa held that the High Court while dealing with a petition under Section 482 Cr. P. C. should not assume the role of a trial Court to find out if the evidence adduced would be sufficient to order conviction of the accused or not and should decide the case on the basis of the allegations in the complaint/fir. In Union of india v. Prakash P. Hinduja the Supreme Court held that this Court in exercise of its power under Section 482 Cr. P. C. can quash a complaint/fir when (i) the allegations therein if accepted to be true do not prima facie constitute any offence or make out a case against the accused, (ii) the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused, and (iii) there is an express legal bar engrafted in any of the provisions of the Code of Criminal Procedure or the Act concerned to the institution and continuance of the proceedings. In view of the law laid down by the Supreme Court, it is clear that this Court, while acting under section 482 Cr. P. C. in a petition to quash a complaint/fir has to take into consideration the allegations made in the complaint and the documents produced by the complainant only and is not supposed to go into the defences available to the accused.
P. C. in a petition to quash a complaint/fir has to take into consideration the allegations made in the complaint and the documents produced by the complainant only and is not supposed to go into the defences available to the accused. The contention that petitioners who issued the cheque in question in their official capacity, but not in their individual capacity, cannot be made liable for an offence under section 138 of the Act, does not hold water in view of Section 141 of the Act, which lays down that when a cheque issued by or on behalf of a company is dishonoured, the persons who are responsible for the conduct of the business of the Company, as well as the company, would be liable for the offence under Section 138 of the Act. It is the petitioners that admittedly issued the dishonoured cheque in favour of the second respondent. Therefore, it is prima facie clear that they are looking after the affairs of the company. So, they can be made liable for the offence under Section 138 of the Act. The fact that the Company is not made an accused is of little consequence, because Section 141 of the Act does not lay down that the complaint against the directors or persons running the business of a company without making the company an accused, is not maintainable. So, the complaint has a discretion to make or not to make the company an accused in the case. ( 4 ) THE contention of the learned counsel for the petitioners that since second respondent was paid Rs. 39,750. 00 by way of demand draft in full settlement of the amount due to him notice demanding payment of rs. 1,58776/- is not a valid notice, cannot be accepted because as per Section 138 of the act notice, when a cheque is dishonoured, has to be issued demanding payment of the amount covered by the dishonoured cheque. " the cheque in this case was issued for rs. 1,58,776/ -. In the notice issued by him, second respondent demanded payment of rs. 1,58,776/- with interest at 24% p. a. as per the custom of business besides charges ofrs. 100/ -.
" the cheque in this case was issued for rs. 1,58,776/ -. In the notice issued by him, second respondent demanded payment of rs. 1,58,776/- with interest at 24% p. a. as per the custom of business besides charges ofrs. 100/ -. ( 5 ) IN K. R. Indira case (2 supra), relied on by the learned counsel for petitioners, the supreme Court while considering the demand to be made in the statutory notice to be issued under Section 138 of the Act, held: "though no formal notice is prescribed in the provision, the statutory provision indicates in unmistakable terms as to what should be clearly indicated in the notice and what manner of demand it should make. In Suman Sethi case (supra), on considering the contents of the notice, it was observed that there was specific demand in respect of the amount covered by the cheque and the fact that certain additional demands incidental to it, in the form of expenses incurred for clearance and notice charges were also made did not vitiate the notice. In a given case if the consolidated notice is found to provide sufficient information envisaged by the statutory provision and there was a specific demand for the payment of the sum covered by the cheque dishonoured. mere fact that it was a consolidated notice, and / or that further demands in addition to the statutory envisaged demand was also found to have been made may not invalidate the same. This position could not be disputed by the learned counsel for the respondent. However, according to the respondent, the notice in question is not separate in that way and that there was specific demand made for payment of the amount covered by the cheque. Significantly, not only the cheque amounts were different from the alleged loan amounts but the demand was made not for the cheque amounts but only the loan amounts though it is a demand for the loan amount and not the demand for payment of the cheque amount nor could it be said that it was a demand for payment of the cheque amount and in addition thereto made further demands as well. What necessary is making of a demand for the amount covered by the bounced cheque which conspicuously absent in the notice issued in the case.
What necessary is making of a demand for the amount covered by the bounced cheque which conspicuously absent in the notice issued in the case. The notice in question is imperfect in this case not because it had any further or additional claims as well but it did not specifically contain any demand for the payment of the cheque amount, the non- compliance with such a demand only being the incriminating circumstance which expose the drawer for being proceeded against under Section 138 of the Act. " (underlining mine) so, it is clear that the notice after dishonour of the cheque is to be issued for payment of the amount covered by the dishonoured cheque . The fact that additional amounts over and above the amount covered by the dishonoured cheque are demanded in that notice would not vitiate the said notice. ( 6 ) WHETHER second respondent in fact received Rs. 39,750. 00 by way of demand draft and if was received in full settlement or part satisfaction of the amount due to him or not, cannot be decided in this petition, because as stated earlier the complaint can be quashed only when the allegations in the complaint do not make out an offence and it cannot be quashed on the basis of the defence taken or the evidence going to be adduced by the accused. The allegations in the complaint and the documents filed by the second respondent also show that after the cheque was dishonoured, notice intimating that fact, with a demand to pay the amount covered by the dishonoured cheque with interest and costs of them notice, was sent and was received by the petitioners. Therefore, it cannot be said that the notice issued by the second respondent is not in accordance with section 138 of the Act. ( 7 ) THE contention that the cheque in question was not issued for a legally enforceable debt between the petitioners and the second respondent, is not, and cannot be, a ground for quashing the complaint, because as per Section 139 of the Act the presumption is that the holder of a cheque received the cheque for the discharge in whole or in part or any debt or other liability due to him. As stated earlier, the question whether second respondent received the draft for Rs. 39,750.
As stated earlier, the question whether second respondent received the draft for Rs. 39,750. 00 or not and if yes, if it was received in full a part satisfaction of the debt due to him, is a matter to be decided at the time of trial of the case on the basis of the evidence to be adduced by the petitioners, but not at this stage. The next contention is that since the dishonour of the cheque was not due to lack of funds but due to its countermanding, petitioners did not commit an offence under section 138 of the Act. In support of the contention of the petitioners that more than sufficient money was standing to the credit of the company in its account with the bank, on which the dishonoured cheque was drawn by the petitioners, a certificate issued by the Bank is produced along with the petition. Since the cheque admittedly was dfshonoured, the reason for its dishonour, i. e. , if it was dishonoured for want of funds or for some other reason, need not, and cannot be, gone into in a petition filed under section 482 Cr. P. C. by the accused in view of the ratio in M. M. T. C. Ltd. case (1 supra) relied on by the learned counsel for the petitioners. In paras 18 and 19 of the said judgment it is held:"lastly it was submitted that a complaint under Section 138 could only be maintained if the cheque was dishonoured for reason of funds being insufficient to honour the cheque or if the amount of the cheque exceeds the amount in the account. It is submitted that as payment of the cheques had been stopped by the drawer one of the ingredients of Section 138 was not fulfiled and thus the complaints were not maintainable. 19. Just such a contention has been negatived by this Court in the case of modi Cements Ltd. v. Kuchil Kumar Nandi ( (1998) 3 SCC 249 ). It has been held that even though the cheque is dishonoured by reason of stop-payment instruction an offence under Section 138 could still be made out. It is held that the presumption under Section 139 is attracted in such a case also.
It has been held that even though the cheque is dishonoured by reason of stop-payment instruction an offence under Section 138 could still be made out. It is held that the presumption under Section 139 is attracted in such a case also. The authority shows that even when the cheque is dishonoured by reason of stop-payment instructions by virtue of Section 139 the court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the stop-payment instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there were sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop-payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 would not be made out. The important thing is that the burden of so proving would be or the accused. Thus, a court cannot quash a complaint on this ground. "therefore, the question whether the stop- payment instructions were issued to the banker by the petitioners for the reason that they discharged the liability due to the second respondent, or for some other reason, is a matter to be decided at the time of trial and not at this stage. All the contentions raised by the petitioners in this petition are defences to be taken by them during the trial. They cannot be made basis for quashing of the complaint. Therefore, I find no grounds to quash the complaint. Hence the petition is dismissed. ( 8 ) HOWEVER, since petitioners are senior officials in the southern region of the company, and since it is the contention of the learned counsel for petitioners that their presence in trial Court for every hearing would cause great hardship in the day-to- day administration of the Company, petitioners are at liberty to approach the trial court for dispensing with their personal attendance, and for their being represented through a counsel, by undertaking that they would be present whenever required by the court.
On such a petition being filed, the learned Magistrate shall consider the same and pass appropriate orders.