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2014 DIGILAW 686 (JHR)

Anup Kumar v. State of Jharkhand

2014-07-02

H.C.MISHRA

body2014
ORDER By the Court.-Heard the learned counsel for the petitioner and learned counsel for the State. No one appears on behalf of the complainant opposite party No.2 in spite of repeated calls, though the name of learned counsel is appearing in the list. Even on 25.6.2014 no one had appeared for the complainant opposite party No.2, in spite of repeated calls and in order to give a chance to the learned counsel for the opposite party No.2, the case was adjourned for today. As stated above, today also no one appears on behalf of the complainant. 2. The petitioner is aggrieved by the order dated 21.6.2001 passed by Sri K. Kumar, learned Judicial Magistrate, 1st Class, Hazaribag, in Complaint Case No. 444 of 2001/T.R. No. 154 of 2001 whereby on the basis of the statement made in the complaint, and the statement of the complainant on solemn affirmation, the prima-facie offence under Section 138 of the Negotiable Instrument Act (hereinafter referred to as the ‘Act’) has been found against the petitioner and summon was ordered to be issued against him for facing the trial. 3. By order dated 11.4.2002 this application was admitted and further proceeding against the petitioner was stayed. Upon notice the complainant opposite party No. 2 appeared and filed counter affidavit. 4. The complainant opposite party No. 2 filed the complaint case before the Chief Judicial Magistrate, Hazaribag, which was registered as Complaint Case No. 444 of 2001. From the perusal of the complaint petition it appears that there was an agreement for sale of land between the parties" for a consideration of Rs. 30.90 lacs. It is stated in the complaint petition that a sum of Rs. 2 lacs was paid as earnest money in accordance with the agreement executed at the complainant's residence at Hazaribag, vide crossed A/c payee cheque No. MSHL/141/863540 dated 29.3.2001 on A/c No. 01190005362 of the State Bank of India, Hanuman Nagar, Patna. The complainant presented the said cheque on 30.3.2001 in his account in the State Bank of India, but he was informed in writing on 24.4.2001 by his Banker that the payment of the said cheque amount had been stopped by the drawer, i.e., the petitioner. Thereafter after giving notice to the petitioner, which as stated, remained un-replied, the complaint petition was filed within the statutory period. Thereafter after giving notice to the petitioner, which as stated, remained un-replied, the complaint petition was filed within the statutory period. The statement of the complainant was recorded on solemn affirmation in which he supported his case, on the basis of which, the prima-facie offence has been found against the petitioner by the impugned order dated 21.6.2001 passed by the Court below which has been challenged in the present application. 5. Learned counsel for the petitioner has submitted that the impugned order passed by the Court below is absolutely illegal in as much as, the payment was stopped by the petitioner and in that view of the matter the offence under Section 138 of the Act shall not be attracted in the case, as according to that section, the offence is made out only when there is insufficient amount in the account to honour the cheque, or cheque amount exceeds the amount arranged to be paid from that account by an agreement made between that bank and the account holder. Learned counsel accordingly, submitted that since this matter relates to stopping the payment by the petitioner, Section 138 of the Negotiable Instrument Act shall not be attracted in the case. It is further submitted by learned counsel for the petitioner that in any event, according to the complaint petition itself, the cheque was issued as an earnest money, but the deal did not finalise between the parties and accordingly, there was no legally enforceable debt or other liability between the complainant and the petitioner and on this count also no offence under Section 138 of the Act is made out against the petitioner. 6. According to the petitioner's case there was an agreement between the parties on 29th March, 2001 for the sale of the land in question which is situated at Patna. The complainant reached Patna on 30th March, 2001 and started to take the measurement of the plot, when some people of the locality came and objected the measurement of the land by the petitioner, informing that the land had already been sold by the complainant. In the evening of 30th March, 2001, itself the petitioner tried to contact the complainant but could not contact him and it appears that thereafter the petitioner instructed his Bank to stop the payment of cheque and the payment was stopped. In the evening of 30th March, 2001, itself the petitioner tried to contact the complainant but could not contact him and it appears that thereafter the petitioner instructed his Bank to stop the payment of cheque and the payment was stopped. It is the case of the petitioner that the sale deed has not been executed in his favour, and as such nothing was legally payable to the complainant. Learned counsel for the petitioner accordingly, submitted that there is no legally enforceable debt or liability between the petitioner and the complainant and accordingly, the offence under Section 138 of the N.I. Act is not made out. 7. In support of his contention, that the matter relates to instruction of stopping payment made by the petitioner and in that view of the matter the offence under Section 138 of the Act shall not be attracted in the case, learned counsel for the petitioner has placed reliance upon the decision of the Hon'ble Supreme Court of India in K.K. Sidharthan v. T.P. Praveena Chandran & Anr., reported in (1996) 6 SCC 369 , in which it has been held that in the case of stoppage of payment of cheque, if the instruction was given to the Banker prior to presentation of the cheque for stopping the payment and drawee of the cheque was also informed about it prior to presentation of the cheque, the offence under Section 138 of the N.I. Act shall not be attracted. 8. In support of his other contention that there was no legally enforceable debt or liability subsisting on the date of issuance of the cheque and accordingly the offence is not made out under Section 138 of the N.I. Act. learned counsel for the petitioner has placed reliance upon the decision of the Supreme Court of India in M/s. Indus Airways Pvt. Ltd; v. M/s. Magnum Aviation Pvt. Ltd. & Anr., reported in 2014 (3) East Cr C 167 (SC) : 2014 (2) JLJR 319 (SC). In the said case the cheque was issued as an advance money and, thereafter, the order was cancelled. The Supreme Court of India has laid down the law as follows :- "19. ..... For a criminal liability to be made out under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. The Supreme Court of India has laid down the law as follows :- "19. ..... For a criminal liability to be made out under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. We are unable to accept the view of the Delhi High Court that the issuance of cheque towards advance payment at the time of signing such contract has to be considered as subsisting liability and dishonour of such cheque amounts to an offence under Section 138 of the N.I. Act. The Delhi High Court has travelled beyond the scope of Section 138 of the N. I. Act by holding that the purpose of enacting Section 138 of the N.I. Act would stand defeated if after placing orders and giving advance payments, the instructions for stop payments are issued and orders are cancelled. In what we have discussed above, if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability." (Emphasis supplied) 9. Learned counsel for the State, on the other hand, submitted that from perusal of the complaint petition, and the statement of the complainant recorded on solemn affirmation, it is apparent that the cheque was issued by the petitioner, which upon deposit in the Bank, was dishonoured and after the required legal notice, the complaint petition was filed within the statutory period Accordingly the offence is made out against the petitioner. 10. Section 138 of the N.I. Act reads as follows :- "138. Dishonour of cheque for sufficiency, etc. 10. Section 138 of the N.I. Act reads as follows :- "138. Dishonour of cheque for sufficiency, etc. of funds in the account.-Where 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 of 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 provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both. *** *** *** 11. Thus a plain reading of this section clearly shows that the cheque should be drawn by the person for discharge, in whole or in part of any debt or other liability. In the present case the cheque was issued as an earnest money and even the deal was not brought to its logical conclusion, in as much as, the sale deed was not executed in favour of the petitioner. I am of the considered view that the case of the petitioner is fully covered by the law laid down in M/s. Indus Airways Pvt. Ltd. (supra), in which it is held that in such cases debt or liability of a person cannot be said to be legally enforceable debt or liability. In my considered view, the offence under Section 138 of the Act is not at all attracted against the petitioner. 12. However, the contention that the matter relates to instruction of stopping payment made by the petitioner and in that view of the matter the offence under Section 138 of the Act shall not be attracted in the case, I find from the judgment in K.K. Sidharthan's case (supra), that it finds mention therein that in Electronics Trade and Technology Development Corpn. Ltd. v. Indian Technologists and Engineers (Electronics) (P) Ltd., as reported in: (1996) 2 SCC 739 , it has been held that Section 138 gets attracted even if a cheque is dishonoured because of stop payment instruction to the bank. In the present case I find from record that the cheque was presented to the Bank by the complainant on 30th March, 2001, and according to the petitioners case he had tried to talk to the complainant in the evening of 30th March, 2001, to know about the exact position about the sale of land to other persons. This clearly shows that there was no instruction to the Bank for stopping the payment on 30th March, 2001, nor there was any information to the drawee of the cheque about the stop payment on 30.3.2001, when the cheque was presented to the Bank. In my considered view, the decision of the Supreme Court in K.K. Sidharthan's case (supra), is of no help to the petitioner. 13. In view of the aforementioned discussions, as the case of the petitioner is fully covered by the law laid down in M/s. Indus Airways Pvt. Ltd. 2014 (3) East Cr C 167 (SC), in which it is held that in such cases debt or liability of a person cannot be said to be legally enforceable debt or liability, and. accordingly, the offence is not made out under Section 138 of the N.I. Act, I am of the considered view that the impugned order passed by the Court below cannot be sustained in the eyes of law. 14. Accordingly the impugned order dated 21.6.2001 passed by Sri K. Kumar, learned Judicial Magistrate, Hazaribag. in Complaint Case No, 444 of 2001/T.R. No. 154 of 2001, as also the entire criminal proceeding against the petitioner in the said complaint case, are hereby, quashed. This application is accordingly, allowed. Application allowed.