S K.C. Construction v. Rameshwar Prasad), under Section
Case Details
Neutral Citation No. - 2023:AHC:169951 Court No. - 86 Case :- APPLICATION U/S 482 No. - 30819 of 2023 Applicant :- Rameshwar Prasad Opposite Party :- State of U.P. and Another Counsel for Applicant :- Krishna Kant Dwivedi Counsel for Opposite Party :- G.A. Hon'ble Rajiv Gupta,J.
Legal Reasoning
1. Heard learned counsel for the applicant, learned A.G.A. for the State and perused the record. 2. The instant application under Section 482 Cr.P.C. has been filed by the applicant for quashing the summoning order dated 22.5.2023 as well as entire criminal proceedings of Complaint Case No. 2575 of 2019 (M/S K.C. Construction Vs. Rameshwar Prasad), under Section 138 of N.I. Act, P.S.Cipari Bazar, District- Jhansi, pending in the court of Judicial Magistrate, Court No. 2, Jhansi. 3. As per the allegations made in the complaint, it is alleged that the applicant had issued two cheques bearing Cheque No. TYZ 140272 dated 7.9.2019 for an amount of Rs. 7 lakh and Cheque No. TYZ 140290 dated 7.9.2019 for an amount of Rs. 5 lakh in favour of Opposite Party No.2, however, on presentation of the said cheques, the same were dishonoured by the bank. After the dishonour of the cheques, a notice was sent to the applicant to make good the payment, however, despite being noticed the due amount was not paid as such, the present complaint has been filed. 4. On the basis of the said complaint and on the basis of an affidavit filed by the complainant u/s 200 Cr.P.C., learned Magistrate after making the requisite enquiry under Section 202 CrPC has summoned the applicant to face trial under Section 138 of Negotiable Instrument Act vide order dated 22.5.2023. 5. Learned counsel for the applicant has submitted that the cheques in question was not issued by him, however admits that the cheque book from which the cheques has been issued belongs to him. Learned counsel for the applicant has next submitted that cheques in question has infact been misplaced by him and has been misused. He has further submitted that an order issuing process against him is not legally tenable. He has further submitted that the reason for the dishonour of the cheques as reported by the bank is that the drawer's signatures differs, as such proceedings under Section 138 of the Negotiable Instruments Act cannot be drawn against him. He has next submitted that no due debt or liability exists as against the drawee, therefore, proceedings u/s 138 of N.I. Act cannot be drawn against him and the entire proceedings is therefore liable to be quashed. 6. In order to buttress his arguments, learned counsel for the applicant has placed implicit reliance on the case of Vinod Tanna and another Vs. Zaheer Siddiqui and others reported in (2002) 7 SCC 541. 7. Per contra, learned A.G.A. has submitted that learned Magistrate on the basis of allegation made in the complaint and after making the requisite enquiry, has summoned the applicant to face trial under Section 138 of Negotiable Instrument Act vide order dated 22.5.2023. 8. Learned AGA has further submitted that even in the case of misplaced cheques as claimed by the applicant, proceeding under section 138 of N.I. Act can always be drawn against him. He has further submitted that where dishonour of the cheques has been made for the reason, that the signature differs, then too offence under Section 138 of N.I. Act is clearly made out against the applicant. He has further submitted that in order to determine the question where the cheque has been dishonoured on the ground, that the signature of the drawer differes, the proviso contained in Section 138 of Negotiable Instruments Act are required to be noticed, which reads as under :- 138. Dishonour of cheque for insufficiency, 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 19 [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: Provided that nothing contained in this section shall apply unless— (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, 20[within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.— For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.] 9. While interpreting the said provision in the case of Laxmi Dyechem Vs. State of Gujarat reported in 2012 (13) SCC 375, the Hon'ble Supreme Court has held that -: "From the above, it is manifest that a dishonour would constitute an offence only if the cheque is retuned by the bank 'unpaid' either because the amount of money standing to the credit of the drawer's account is insufficient to honour the cheque or that the amount exceeds the amount arranged to be paid from that account by an agreement with that bank. The High Court was of the view and so was the submission made on behalf of the respondent before us that the dishonour would constitute an offence only in the two contingencies referred to in Section 138 and none else. The contention was that Section 138 being a penal provision has to be construed strictly. When so construed, the dishonour must necessarily be for one of the two reasons stipulated under Section 138 & none else. The argument no doubt sounds attractive on the first blush but does not survive closer scrutiny. At any rate, there is nothing new or ingenious about the submission, for the same has been noticed in several cases and repelled in numerous decisions delivered by this Court over the past more than a decade." 10. The contention of learned counsel for the applicant is that the dishonour would constitute an offence only in the two contingencies referred to in Section 138 and none else. It is further contended by him that section 138 being a penal provision has to be construed strictly. When so construed, the dishonour must necessarily be for one of the two reasons stipulated under Section 138 and none else. Thus, the argument raised by the counsel for the applicant that no doubt sounds attractive on the first blush but does not survive closer scrutiny. Moreover, the said submission has been noticed in several cases and repelled in numerous decisions delivered by the Court over the past more than a decade. 11. The decision relied upon by the counsel for the applicant reported in 2002 (7) SCC 541 was considered in the case of Laxmi Dyechem (supra), the Hon'ble Apex Court after taking into consideration its earlier decisions on interpretation of provision contained in Section 138 of N.I. Act made the following observations :- "15. A three-Judge Bench of this Court in Rangappa v. Sri Mohan (2010) 11 SCC 441 has approved the above decision and held that failure of the drawer of the cheque to put up a probable defence for rebutting the presumption that arises under Section 139 would justify conviction even when the appellant drawer may have alleged that the cheque in question had been lost and was being misused by the complainant. 16. The above line of decisions leaves no room for holding that the two contingencies envisaged under Section 138 of the Act must be interpreted strictly or literally. We find ourselves in respectful agreement with the decision in Magma case that the expression "amount of money …. is insufficient" appearing in Section 138 of the Act is a genus and dishonour for reasons such "as account closed", "payment stopped", "referred to the drawer" are only species of that genus. Just as dishonour of a cheque on the ground that the account has been closed is a dishonour falling in the first contingency referred to in Section 138, so also dishonour on the ground that the "signatures do not match" or that the "image is not found", which too implies that the specimen signatures do not match the signatures on the cheque would constitute a dishonour within the meaning of Section 138 of the Act." 12. The High Court while considering the decision in Vinod Tanna's case has observed that- ".....We have carefully gone through the said decision which relies upon the decision of this Court in Electronics Trade & Technology Development Corporation Ltd. The view expressed by this Court in Electronics Trade & Technology Development Corporation 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. case. 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" 13. Thus, the High Court on the basis of aforsaid observations and ratio, while dealing with a case in which the cheques were dishonoured by the bank that drawer's signature were incomplete or the signatures did not match came to the conclusion that criminal prosecution against the accused in such cases should be allowed to proceed and the judgment and order passed by the High Court quashing the criminal proceedings were set aside. 14. It is germane to point out here that the judgments of the Apex Court in Vinod Tanna's case as well as Laxmi Dyechem's case (supra) have been rendered by the benches of equal strength, however the judgment in Laxmi Dyechem case is latest one wherein the ratio laid down in Vinod Tanna's case has not been approved and it has been held that in such circumstances where the cheque has already been dishonoured on the ground of "Drawer's signatures differs", provisions contained in Section 138 of N.I. Act would clearly be attracted. 15. Furthermore, the submission of the applicant's counsel that the cheque in question have been misplaced and was being misused by the complainant, as such proceedings under Section 138 N.I. Actcannot be drawn against him as has already been repelled by the Apex Court in the case of Rangappa vs. Sri Mohan reported in (2010) 11 SCC 441. 16. Thus, both the contentions raised by the counsel for the applicants on the basis of which, the proceedings under Section 138 of N.I. Act cannot be drawn against him has been repelled by the Apex Court and in light of the said decisions, the Vinod Tanna's case relied upon by the counsel for the applicant is not of any help to him and his arguments is liable to be repelled. 17. In view of the aforesaid discussion, I am of the considered opinion that the impugned order dated 22.5.2023 passed by the court below is just, proper and legal and as such, the entire proceedings passed on the complaint cannot be quashed 18. The present application u/s 482 Cr.P.C. is, therefore, devoid of merits and is accordingly dismissed. Order Date :- 23.8.2023 KU Digitally signed by :- KALIM UDDIN SIDDIQUI High Court of Judicature at Allahabad