JUDGMENT Mr. M. Jeyapaul, J. (Oral): - This appeal is against acquittal preferred by M/s Gupta Rice and General Mills, Bassi Pathana. The complaint preferred by the complainant under Section 138 of the Negotiable Instruments Act (for short ‘the Act’) was simply thrown-out by the trial Court on the sole ground that two subject cheques issued by the respondent M/s Meerut Agro Mills Limited were dishonoured not on account of insufficient funds, but on account of ‘Stop Payment’ instruction received from the account holder, the respondents-herein. 2. The brief facts of the case of the complainant is that the respondents-accused M/s Meerut Agro Mills Limited purchased rice bags worth Rs.8,55,439/- on 12/15/and 23.12.1992. A sum of Rs.2,15,000/- alone was paid towards the said consignment by the respondents-accused in the month of April, 1993. The first accused through the second accused Director who was Incharge and responsible for the conduct of the business of the first accused issued two cheques on 20.6.1993 and another one on 30.6.1993, each for a sum of Rs.3 lacs in favour of the complainant-firm. Both the cheques were dishonored as per the information received from the State Bank of Patiala, Bassi Pathana Branch. Statutory notice was issued on 15.7.1993, but there was no positive response from the respondentsaccused. Hence the complaint. 3. On the side of the complainant PW1 Vivek Mohan Mittal, Advocate who issued the statutory notice dated 15.7.1993 to the respondents-accused was examined to speak about the issuance of the statutory notice. PW3 K.M.Vijay Rangam, Manager, State Bank of Mysore, Karol Bagh, New Delhi was examined on the side of the complainant. He has spoken to the fact that both the cheques presented by the complainant through their bankers State Bank of Patiala, Bassi Pathana Branch were presented for payment, but the same could not be honoured as their customers, namely, the respondent-firm issued Stop Payment instruction. PW2 S.P.Jairath, Manager of the State Bank of Patiala, Bassi Pathana Branch spoke about the issuance of memo Ex.AA informing their client, namely, the complainant herein that the cheques presented for collection returned with an endorsement by the State Bank of Mysore, Karol Bagh, New Delhi that their customers rendered Stop Payment instruction. PW2 S.P.Jairath, Manager of the State Bank of Patiala, Bassi Pathana Branch spoke about the issuance of memo Ex.AA informing their client, namely, the complainant herein that the cheques presented for collection returned with an endorsement by the State Bank of Mysore, Karol Bagh, New Delhi that their customers rendered Stop Payment instruction. PW4 Baldev Krishan has spoken about the subsisting liability between the complainant and the accused which culminated in the issuance of subject two cheques and dishonor of the same on account of stop payment instruction received by their bankers from the accused-respondents. He has also spoken to the fact that in spite of the statutory notice issued to the respondents, there was no positive response. 4. The accused took up a plea that there was no supply of rice as agreed by the complainant, but the cheques issued as security were dishonored on account of insufficient funds. 5. DW1 Anil Kumar, Clerk attached to learned Addl.District & Sessions Judge, New Delhi has deposed that a suit was filed by the respondents claiming a sum of Rs.3,15,000/- as damages for the non-supply of the rice ordered by the respondents from the complainant as on 28.1.1994. DW2 M.Balasubraymaniam, Branch Manager of State Bank of Mysore, Karol Bagh, New Delhi has spoken about the Overdraft facility to the tune of Rs.50 lacs available in the accounts of the respondents-accused. DW3 Munish Tyagi, Advocate has deposed that a notice was issued to the complainant informing him of the stop payment instruction parted with by the accused to their bankers. 6. The trial Court having adverted to the above materials on record returned two findings. The first finding was that two cheques were in fact issued by the accused in favour of the complainant for the subsisting liability. The second finding was that those two cheques issued by the accused in favour of the complainant were dishonored by State Bank of Mysore, Karol Bagh, New Delhi on the ground that their customers, namely, the respondents had already issued Stop Payment instruction and not on the ground that the cheques were returned dishonored on account of insufficient funds in the accounts of the respondents. Based on the second finding arrived at by the trial Court, the complaint lodged by the complainant under Section 138 of the Act was thrown out. 7. Based on the second finding arrived at by the trial Court, the complaint lodged by the complainant under Section 138 of the Act was thrown out. 7. Learned counsel appearing for the appellant/complainant would vehemently submit based on the recent decision of the Supreme Court that the trial Court has wrongly held that dishonour of the cheque on account of stop payment instruction would not amount to dishonour of the cheque on account of insufficient funds. 8. Learned Amicus Curiae appointed by this Court to argue on behalf of the respondents-accused would submit that the complainant failed to establish that there was subsisting liability for the issuance of the subject cheques. Drawing the attention of this Court to the evidence of DW1, he would submit that the respondents-accused had already knocked at the doors of the civil Court seeking compensation for the non-supply of the rice materials as ordered by the respondents. Therefore, the whole case of the complainant based on dishonor of cheques comes down crashing. It is his submission that the trial Court has rightly rendered a verdict of acquittal. 9. The entire materials on record were thoroughly scanned by me in the background of the aforesaid submissions made on either side. PW4 Baldev Krishan, complainant in this case has categorically spoken about the usual business transactions the complainant had with the accused for the supply of rice bags. It appears that for three such transactions a sum of Rs.8,55,439/- was found due and payable by the respondents-accused. It has also been demonstrated by PW4 that a sum of Rs.2,15,000/- towards the said liability was liquidated by the accused, but he had not paid the remaining amount of Rs.6,40,439/-. The respondent has issued two cheques for a sum of Rs.3 lacs each. The testimony of PW4 Baldev Krishan, the complainant in this case and PW1 Vivek Mohan Mittal, Advocate would establish that statutory notice was already issued by PW4 through PW1 which put on notice the accused-respondents about dishonour of those two cheques issued by the accused in favour of the complainant. There is nothing on record to show that there was any positive response from the side of the respondent saccused. 10. There is nothing on record to show that there was any positive response from the side of the respondent saccused. 10. The complainant has established through the evidence of PW3 K.N.Vijya Rangam, Manager, State Bank of Mysore that two cheques issued by the accused in favour of the complainant were dishonoured by them on account of stop payment instruction received from the accused. In fact PW2 S.P.Jairath, Branch Manager of State Bank of Patiala, the bankers of the complainant issued memo Ex.AA informing the complainant about the dishonor of cheques sent for collection on account of stop payment instruction given by the accused to their bankers. 11. The complainant has thus established three aspects. One is that the subject cheques were issued towards subsisting liability. Secondly, the complainant could establish that those two cheques were returned on the ground that stop payment instruction was received by bankers from the respondents. Thirdly, it was also established that statutory notice was duly issued by the complainant to the respondents, but the respondents had not come out with any positive response. In view of the above, the complainant has established that an offence under Section 138 of the Act is made out as against the accused-respondents. 12. The trial Court of course has found that there was subsisting liability on account of which these two subject cheques were issued by the respondents in favour of the complainant, but the trial Court chose to dismiss the case of the complainant on the ground that the the cheques issued in their favour were returned only on the ground that stop payment instruction was received by the bankers of the respondents. 13. In M/s Modi Cements Ltd. vs. Kuchil Kumar Nandi, 1999 SCC (Crl.) 252, the Hon’ble Supreme Court has categorically held that dishonour of the cheques by the banker on the ground that accused has issued stop payment instruction would also constitute an offence under Section 138 of the Negotiable Instruments Act. In view of the above, I find that the trial Court has erred in finding that there was no offence under Section 138 of the Act as cheque was not dishonored on account of insufficient funds. 14. DW3 Munish Tyagi, Advocate was allegedly engaged by the respondents to issue notice informing the complainant about the instruction passed on by the respondents to their bankers to stop payment. 14. DW3 Munish Tyagi, Advocate was allegedly engaged by the respondents to issue notice informing the complainant about the instruction passed on by the respondents to their bankers to stop payment. No receipt for sending the notice by registered post was produced, nor was any acknowledgement received by the advocate DW3 who allegedly issued the said notice to the complainant on behalf of the respondent-accused produced. Even assuming for the sake of arguments that the said notice was issued by the respondents through DW3, it does not in any way effect the case of the complainant. After all issuance of instruction by the accusedrespondents to stop payment and the instruction acted upon by their bankers to dishonour the cheques would constitute to an offence under Section 138 of the Act. 15. The testimony of DW3 N.Balasubramaniam, Branch Manager, State Bank of Mysore to the effect that there was Overdraft facility of Rs.50 lacs available in the accounts of the accused does not save the accused from the commission of offence under Section 138 of the Act, inasmuch as, the cheques were returned only on the specific instruction flowed from the accused to their bankers to stop payment for the cheques issued by them in favour of he complainant. 16. It is true that the testimony of DW1 Anil Kumar attached to learned Addl.District & Sessions Judge, New Delhi would go to establish that a suit for compensation was laid by the accused as against the complainant for a sum of complainant Rs.3,15,000/- on 28.1.1994. It is to be noted that the said suit was laid after about 6 months of the present transaction between the accused and the complainant which culminated in the dishonour of the cheques and issuance of statutory notice by the complainant to the accused. Mere filing of the case, that too, after the receipt of statutory notice from the complainant would not wipe out the subsisting liability proved and established before the Court. 17. In view of the above, I find that the trial Court has patently erred on facts and in law that no case under Section 138 of the Negotiable Instruments Act was made out by the complainant. 17. In view of the above, I find that the trial Court has patently erred on facts and in law that no case under Section 138 of the Negotiable Instruments Act was made out by the complainant. It is held, in the above facts and circumstances, that the respondents-accused have committed an offence under Section 138 of the Negotiable Instruments Act and as a result of which the judgement of the trial Court is liable to be set aside. 18. Therefore, the judgement of acquittal recorded by the trial Court stands set aside. Accused-respondent No.1 is a firm and is being represented by respondent No.2. Both the respondents-accused are convicted under Section 138 of the Negotiable Instruments Act. Respondent No.2 is sentenced to undergo R.I. for 6 months for the offence under Section 138 of the Negotiable Instruments Act. Both the accusedrespondents shall pay jointly and severally a fine of Rs.12 lacs before the trial Court concerned, failing which the accused-respondent No.2 shall undergo a further period of 6 months R.I. On recovery of the said fine amount, the trial Court shall treat it as compensation component and pay the same to the complainant-appellant. 19. The trial Court shall issue non-bailable warrant against 2nd respondent and send him to prison to undergo the unexpired period of his sentence. 20. The appeal is thus allowed in the aforesaid terms. ----------0BSK0----------