1992 (6) TMI 183 - HC - Indian Laws

Summary

Issues Involved:
1. Quashing of the complaint under Section 482 of the Code of Criminal Procedure, 1973.
2. Interpretation of Section 138 of the Negotiable Instruments Act, 1881.
3. Validity of the bank's endorsement as a ground for dishonour of cheque.

Issue-wise Detailed Analysis:

1. Quashing of the complaint under Section 482 of the Code of Criminal Procedure, 1973:
The petition was filed to quash the complaint in C.C. No. 468 of 1990. The complainant alleged that the accused issued a cheque which was dishonoured due to a "payment stopped by the drawer" memo from the bank. The accused did not pay the amount even after receiving a lawyer's notice. The court noted that the complaint made out all the ingredients of the offence under Section 138 of the Negotiable Instruments Act, and thus, the petition to quash the complaint was dismissed.

2. Interpretation of Section 138 of the Negotiable Instruments Act, 1881:
Section 138 deals with the dishonour of cheques due to insufficiency of funds or exceeding the arrangement made with the bank. The court emphasized that the offence under this section cannot solely depend on the bank's endorsement while returning the cheque. The essential conditions include the cheque being returned unpaid due to insufficient funds or exceeding the arrangement, and the drawer failing to pay the amount within 15 days of receiving the notice. The court clarified that the purpose of the enactment would be defeated if the interpretation relied strictly on the bank's endorsement.

3. Validity of the bank's endorsement as a ground for dishonour of cheque:
The petitioner argued that the complaint should be dismissed if the bank's endorsement was not specifically about insufficient funds or exceeding the arrangement. The court rejected this argument, stating that the endorsement made by the banker is not the decisive factor. It ruled that irrespective of the endorsement, if the cheque was returned unpaid due to insufficient funds or exceeding the arrangement, the offence under Section 138 would be established. The court referred to previous judgments, including Abdul Samad v. Satya Narayan Mahawar and G.F. Hunasikattimath v. State of Karnataka, but did not find their reasoning persuasive enough to alter its conclusion.

Conclusion:
The court concluded that the complaint under Section 138 of the Negotiable Instruments Act should not be quashed based solely on the bank's endorsement. The complaint contained all necessary allegations to constitute an offence under the said section. Hence, the petition was dismissed.