9911796707
TMI Blog1998 (3) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... Construction, M/s Nandi Traders, M/s Nandi Concerns, M/s Nandi and Co., M/s Nandi Enterprises, M/s S.K. Enterprises, M/s S.K. Trading and M/s Jupitor Art. The respondent/accused is sole proprietor of all these business concerns. (5) It is alleged by the appellant in the complaint that the respondent purchased from them non-levy Modi Cement on credit against the orders placed on behalf of his concerns. These orders were placed by the respondent with the Calcutta office of the appellant and it was agreed that the price of the consignments was to be paid by the respondent at the said office. After taking accounts it was found that on 23.2.1994 the respondent incurred a liability/debt of Rs. 1,10,53,520.30 payable to the appellant towards the purchased price of the cement supplied by them to the respondent. In partial discharge of the said liability/debt the respondent drew three cheques in favour of the appellant on 23.2.94, 26.2.94 and 28.2.94 bearing cheque Nos. 1308340- 42 for a sum of Rs.2,00,000/- each. (6) The appellant presented these three cheques on 9.8.1994 for encashment through their bankers. Bank of India, J.L. Nehru Road Branch, Calcutta. On 6.9.94 the Indian Bank Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, within fifteen days of the receipt of the 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 purpose of this Section, "debt or other liability" means a legally enforceable debt or other liability. (8) Briefly stated the reasons given by the High Court are as under:- (i) The appellant has not pleaded in his complaint that the cheques were 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 mad with that Bank. The necessary ingredients of Section 138 of the Act having not been pleaded the Court could not have taken cognizance of the offence. (ii) Mere endorsement of the Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with such an endorsement, it amounts to dishonor of cheque and it comes within the meaning of Section 138". (11) Another two Judge Bench while dealing with the same question in K.K. Sidharthan vs. T.P. Praveena Chandran & Anr.. (1996) 6 SCC 369 observed. "This shows that Section 138 gets attracted in terms if cheque is dishonored because of insufficient funds or where the amount exceeds the arrangement made with the bank. It has, however, been held by a Bench of this Court in Electronics Trade and Technology Development Corpn. Ltd., vs. Indian Technologists and Engineers (Electronics) (P) Ltd.. that even if a cheque is dishonored because of 'stop payment' instruction to the bank, Section 138 would get attracted". We are in complete agreement with the above legal proposition. (12) The Learned Counsel for the appellant vehemently urged that both these decisions of this Court clearly support the case of the appellant and the trial court had rightly issued the process and the High Court was totally wrong in taking a contrary view. (13) It was, however contended on behalf of the respondent that the decision in Electronics Trade & Technology Development Corporation Ltd., Secunderabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Chapter XVII, which is intituled as "OF PENALTIES IN CASE OF DISHONOR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNTS" and contains Sections 138 to 142, is to promote the efficacy of banking operations and to ensure credibility in transacting business through cheques. It is for this reason we are of the considered view that the observations of this Court in Electronics Trade & Technology Development Corporation Ltd., Secunderabad (supra) in paragraph 6 to the effect "Suppose after the cheque is issued to the payee or to the holder in due course and before it is presented for encashment, notice is issued to him not to present the same for encashment and yet the payee or holder in due course presents the cheque to the bank for payment and when it is returned on instructions. Section 138 does not get attracted", does not fit in with the object and purpose for which the above chapter has been brought on the Statute Book. (17) The above view had been referred to in K.K. Sidharthan (supra) as is clear from Paras 5 and 6 of the Judgment. Paras 5 and 6 read as under:- "5. The above apart, through in the aforesaid case this Court held that even "stop payment" instruction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n our opinion, do not also lay down the law correctly. (19) Section 138 of the Act is a penal provision wherein if a person draws a cheque on an account maintained by him with the 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, on the ground either because of the amount of money standing to the credit of that account is insufficient to honor 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. The distinction between the deeming provision and the presumption is well discernible. To illustrate, if a person, draws a cheque with no sufficient funds available to his credit on the date of issue, but makes the arrangement or deposited the amount thereafter before the cheque is out in the bank by the drawer, and the cheque is honored, in such a situation drawing of presumption of dishonesty on the part of the drawer under Section 138 would not be justified. Section 138 of the Act gets attracted only when the cheque is dishonored. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
