2008 (8) TMI 951 - HC - Indian Laws

Dishonour of cheque - Undated cheque was given as a security - cheque was given for consideration or not - Issued summon order for Cognizance of offence u/s 138, 139 and 141 - Application u/s 482 for quashing the summon order - H ELD THAT - It is noteworthy that, notice of demand sent by the complainant in terms of Section 138 did not elicit any response. Furthermore, even before this Court, counsel for the petitioners has not explained why his clients failed to make any specific demand in writing for return of the cheque since, according to them, its purpose had already been served, and the contract for which the cheque was issued, was over. In N. Rangachari Vs. Bharat Sanchar Nigam Ltd. 2007 (4) TMI 621 - SUPREME COURT , it was held that if, on reading the complaint as a whole, all the elements of the offence u/s 138 and 141 are made out, then any pleas put forward by the appellant and the defences sought to be put forward by the accused, can only be looked into after the trial is concluded. Admittedly the cheque was given for consideration. The respondent has tried to encash that cheque against consideration which, according to the respondent, was due to it. In addition, Section 139 also creates a presumption in favour of the complainant. Under the circumstances, the onus for proving otherwise lies on the petitioners and can only be discharged at the trial. Furthermore, as held in Modi Cements Ltd. Vs. Kuchil Kumar Nandi, 1998 (3) TMI 632 - SUPREME COURT , once a cheque is issued by the drawer, a presumption u/s 139 must follow, and merely because the cheque in question was undated at the time it was handed over does not mean that it was given without consideration. There is also nothing in law to presume that a cheque, which happens to be a negotiable instrument, must be deemed to have been drawn on the date the undated cheque was handed over. There is also nothing in law to presume that a cheque, which happens to be a negotiable instrument, must be deemed to have been drawn on the date the undated cheque was handed over. On the contrary, as per the ratio of Anil Kumar Sawhney Vs. Gulshan Rai 1993 (10) TMI 347 - SUPREME COURT , the cheque is deemed to be drawn on the date mentioned on the cheque. Lastly, the notice u/s 138 issued by the respondent, was admittedly received by the petitioners but they did not bother to reply. Looking to the totality of the circumstances, it cannot be said that no prima facie case is made out or that interference with the proceedings before the Ld. Metropolitan Magistrate is warranted in the exercise of this Court s jurisdiction u/s 482 Cr.P.C. The petition is, therefore, dismissed.

Summary

Issues Involved:
1. Quashing of the summoning order issued under Sections 138, 139, and 141 of the Negotiable Instruments Act, 1881.
2. Validity of the cheque presented beyond six months from the date it was drawn.
3. Authority to fill in the date on an undated cheque.
4. Consideration for which the cheque was issued.
5. Exercise of inherent jurisdiction under Section 482 of the Code of Criminal Procedure.

Issue-wise Detailed Analysis:

1. Quashing of the Summoning Order:
The petitioners sought to quash the summoning order issued by the Metropolitan Magistrate on the grounds that the allegations in the complaint did not constitute an offence under Sections 138, 139, and 141 of the Negotiable Instruments Act. The court held that the cheque was given for consideration, and whether it was for timely supply of goods or for guaranteeing the erection, commissioning, and performance of the plant machinery was a disputed question of fact to be decided at trial. The court emphasized that the presumption under Section 139 of the Negotiable Instruments Act favored the complainant, and the burden of proving otherwise lay on the petitioners.

2. Validity of the Cheque Presented Beyond Six Months:
The petitioners contended that the cheque was presented beyond the period of six months from the date it was drawn, as required by proviso (a) to Section 138 of the Negotiable Instruments Act. The court referred to the Supreme Court's ruling in Anil Kumar Sawhney Vs. Gulshan Rai, which held that a postdated cheque becomes a cheque under the Act on the date specified on it, and the six-month period is to be reckoned from that date. In this case, the cheque became a cheque on the date written on it, i.e., 28.1.2008, and was presented within the six-month period. Thus, the complaint was within time.

3. Authority to Fill in the Date on an Undated Cheque:
The court addressed the issue of whether the respondent had the authority to fill in the date on an undated cheque. It cited common law principles and Section 20 of the Negotiable Instruments Act, which allows the holder of an incomplete negotiable instrument to complete it. The court concluded that the petitioners had given implied authority to the respondent to fill in the date, and any issues regarding the scope of this authority were matters for trial.

4. Consideration for Which the Cheque Was Issued:
The petitioners argued that the cheque was issued without consideration, as it was meant to ensure the supply of goods and not for guaranteeing the performance of the plant and machinery. The court found that the cheque was given for consideration, and whether the consideration was ultimately satisfied or whether the cheque was wrongly encashed were issues to be decided at trial. The court emphasized that the presumption under Section 139 of the Negotiable Instruments Act favored the complainant.

5. Exercise of Inherent Jurisdiction Under Section 482 Cr.P.C.:
The court discussed the principles governing the exercise of inherent jurisdiction under Section 482 of the Code of Criminal Procedure. It referred to several Supreme Court rulings, including R.P. Kapur Vs. The State of Punjab, which held that inherent jurisdiction should be exercised sparingly and with caution to prevent abuse of the process of court or to secure the ends of justice. The court concluded that the petitioners had not shown any glaring defect in the complaint or any miscarriage of justice that warranted interference under Section 482 Cr.P.C.

Conclusion:
The petition was dismissed, and the court held that the issues raised by the petitioners were matters for trial. The presumption under Section 139 of the Negotiable Instruments Act favored the complainant, and the burden of proving otherwise lay on the petitioners. The court found no reason to interfere with the proceedings before the Metropolitan Magistrate under Section 482 Cr.P.C.