Mohd. Shageer v. Ziaurrahman), under Section
Case Details
Neutral Citation No. - 2024:AHC:198803 Court No. - 79 Case :- APPLICATION U/S 482 No. - 21929 of 2024 Applicant :- Ziaurrahman Opposite Party :- State of U.P. and Another Counsel for Applicant :- Brajesh Kumar Solanki,Samrat Vikram Singh Counsel for Opposite Party :- Ramesh Kumar Shukla,G.A. Hon'ble Arun Kumar Singh Deshwal,J. 1. Heard Sri Brajesh Kumar Solanki, learned counsel for the applicant, Sri Ramesh Kumar Shukla, learned counsel for the Punjab National Bank and Sri Rajeev Kumar Singh, learned AGA for the State. 2. The instant application under Section 482 Cr.P.C. has been filed for quashing the summoning order dated 26.06.2023 as well as entire proceedings of Complaint Case No.44406 of 2022 (Mohd. Shageer Vs. Ziaurrahman), under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act, 1881'), pending in the court of Prescribed Authority, Additional Court Aligarh, District Aligarh. 3. In compliance of the orders dated 09.12.2024 and 16.12.2024, Branch Manager, Punjab National Bank,
Legal Reasoning
there is no dispute about the signature of the applicant on the cheque in question. However, this is a sheer negligence on the part of the bank who despite receiving intimation from the applicant on 15.09.2022, returned the cheque in question presented before the bank on 01.11.2022 with the endorsement 'fund insufficient' instead of 'stop payment'. 4. Therefore, General Manager, Punjab National Bank, Zonal Office at Lucknow is directed to conduct enquiry and fix responsibility for this negligence and take appropriate action. 5. It is further clear from the record that an FIR was lodged by the applicant on 18.05.2023 after receiving the demand notice from opposite party no.2. During investigation, it was found that applicant and opposite party no.2 were in touch with each other through phone on 12.01.2022 and 24.03.2022 even prior to giving intimation to bank or police. Therefore, it is clear that even prior to missing of the cheque, applicant and opposite party no.2 were in touch with each other. It is also clear from the record that cheque in question was admittedly missed on 10.02.2022 but the applicant first time had informed the bank on 15.09.2022. This itself caused doubt over the story set up by the applicant. It is undisputed that cheque in question was signed by the applicant, therefore, presumption u/s 139 of the Act, 1881 will be attracted and all defence raised by the applicant are available to him during the trial. 6. The Apex Court in the case of Lafarge Aggregates And Concrete India Private Ltd. Vs. Sukarsh Azad And Another reported in 2014 (13) SCC 779 has observed that once the cheque signed by the drawer has been returned with the endorsement 'refer to drawer', 'exceeds arrangements' and instruction for 'stop payment' and like other usual endorsement, it amounts to dishonour within the meaning of Section 138 of the Act, 1881. Paragraph no.8 of the aforesaid judgement is being quoted as under: “8. The object of bringing Sections 138 to 142 of the Negotiable Instruments Act on statute appears to be to inculcate faith in the efficacy of banking operations and credibility in transacting business of negotiable instruments. Despite several remedies, Section 138 of the Act is intended to prevent dishonesty on the part of the drawer of negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a bank and induces the payee or holder in due course to act upon it. Therefore, once a cheque is drawn by a person of an account maintained by him for payment of any amount or discharge of liability or debt or is returned by a bank with endorsement like (i) refer to drawer, (ii) exceeds arrangements, and (iii) instruction for stop payment and like other usual endorsement, it amounts to dishonour within the meaning of Section 138 of the Act. Therefore, even after issuance of notice if the payee or holder does not make the payment within the stipulated period, the statutory presumption would be of dishonest intention exposing to criminal liability.” 7. This court in the case of Vijay Kumar Vs. State of U.P. & Another in Application u/s 482 No.17464 of 2024 vide order dated 23.05.2024, has also observed if the cheque is returned by the bank with any of the endorsement like, case referred to drawer, instructions for stoppage of payment, exceeds arrangement, insufficient fund, signature differed or mis-matched and account closed. In all such cases, Magistrate is right to issue the process and the defence to rebut the presumption u/s 139 of the Act, 1881 is available to the accused during trial. Paragraph nos.11 and 12 of the said judgement is being quoted as under: “11. Hon'ble the Apex Court in the case of Laxmi Dyechem Vs. State of Gujarat reported in (2012) 13 SCC 375, observed that even if a cheque is returned by the bank with the endorsement 'signature differ' even that is sufficient to issue process for Section 138 N.I. Act because after dishonouring the cheque, drawer gets statutory notice giving him opportunity to arrange the payment of amount covered by cheque and it is only when the drawer despite getting opportunity on receiving said notice failed to make the payment within 15 days, proceeding under Section 138 N.I. Act is initiated. Paragraph no.16.2 and 17 of the Laxmi Dyechem (supra) is being quoted as under:- "16.2. There may indeed be situations where a mismatch between the signatories on the cheque drawn by the drawer and the specimen available with the bank may result in dishonour of the cheque even when the drawer never intended to invite such a dishonour. We are also conscious of the fact that an authorised signatory may in the ordinary course of business be replaced by a new signatory ending the earlier mandate to the bank. Dishonour on account of such changes that may occur in the course of ordinary business of a company, partnership or an individual may not constitute an offence by itself because such a dishonour in order to qualify for prosecution under Section 138 shall have to be preceded by a statutory notice where the drawer is called upon and has the opportunity to arrange the payment of the amount covered by the cheque. It is only when the drawer despite receipt of such a notice and despite the opportunity to make the payment within the time stipulated under the statute does not pay the amount that the dishonour would be considered a dishonour constituting an offence, hence punishable. Even in such cases, the question whether or not there was a lawfully recoverable debt or liability for discharge whereof the cheque was issued would be a matter that the trial court will examine having regard to the evidence adduced before it and keeping in view the statutory presumption that unless rebutted the cheque is presumed to have been issued for a valid consideration. 17. In the case at hand, the High Court relied upon a decision of this Court in Vinod Tanna case in support of its view. We have carefully gone through the said decision which relies upon the decision of this Court in Electronics Trade & Technology Development Corpn. Ltd. The view expressed by this Court in Electronics Trade & Technology Development Corpn. Ltd. that a dishonour of the cheque by the drawer after issue of a notice to the holder asking him not to present a cheque would not attract Section 138 has been specifically overruled in Modi Cements Ltd. case10. The net effect is that dishonour on the ground that the payment has been stopped, regardless whether such stoppage is with or without notice to the drawer, and regardless whether the stoppage of payment is on the ground that the amount lying in the account was not sufficient to meet the requirement of the cheque, would attract the provisions of Section 138." 12. From the above legal position, it is clear that if the cheque is dishonoured and returned with following endorsement, then it will be sufficient for prima facie case for issuing process Act:- (i) case referred to drawer Section under N.I. 138 (ii) instruction for stoppage of payment (iii) exceeds arrangement (iv) insufficient fund (v) signature differed or mismatch (vi) account closed”
Arguments
Ramghat Road Branch, Aligarh is present and Sri Mohd. Akram Khan, who was the I.O. in the FIR dated 18.05.2023 registered by the applicant against opposite party no.2 is also present. The Branch Manager informed the court that the applicant had given application to stop the payment of cheque in question on 15.09.2022 but because of the negligence or some other fault, it was not updated on system either at Branch Level or at Clearing House Level, Lucknow and for that reason cheque in question was returned with the endorsement 'fund insufficient' instead of 'stop payment'. In the return memo issued by the bank at the time of bouncing of cheque, it is clearly mentioned that 'cheque is dishonoured for insufficiency of fund'. Admittedly,
Decision
8. In view of the above established legal position as well as considering the facts of the present case, this Court does not find any illegality in the impugned proceeding. 9. Accordingly, present application is dismissed. However, applicant is at liberty to raise all such pleas during trial. 10. The Registrar (Compliance) is directed to send copy of this order to the General Manager, Punjab National Bank, Zonal Office at Lucknow for appropriate action. Order Date :- 19.12.2024 S.Chaurasia