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TMI Blog1998 (3) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... AND K.T. THOMAS, JJ. For the Appellant : Ranjit Kumar, and Ms. Bina Tamta For the Respondent : Ranjan Mukherjee JUDGMENT The following Judgment of the Court was delivered : S.P. KURDUKAR. J. Leave granted. (2) These three appeals are filed by the appellants/complainants challenging the legality and correctness of the judgment and order dated 21.11.1996 passed by the High Court in Crl. Revision Petition Nos. 2303-04 of 1995. (3) The present proceedings arise out of a complaint filed by the appellant in the Court of Chief Judicial Magistrate, Calcutta under Section 138 of the Negotiable Instruments Act, 1981 (for short the Act ) against the respondent. The appellant company is a public limited company manufacturing and selling cement under the brand name "Modi Cement" throughout India. (4) The respondent/accused carries on business in the name and style of "Dubey 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 responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, 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, within fifteen days of the receipt of the information by him from the bank regarding the return of the cheque as unpaid; an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a notice. if he does to pay the same, the statutory presumption of dishonest intention, subject to any other liability, stands satisfied". (10) It been took up for consideration a similar contention advanced before them by the Learned Counsel for the drawer of the cheques that stoppage of payment due to instructions does not amount to an offence under Section 138 of the Act and repelling the same observed, "We find no force in the contention. The object of bringing Section 138 on the Statute appears to be to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments........". The Court further observed,".............. it is seen that once the cheque had been drawn and issued to the payee and the payee has presented the cheque and thereafter, if any instructions are issued to the bank for non-payment and the cheque is returned to the payee 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 Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court in Electronics Trade Technology Development Corporation Ltd. Secunderabad (supra) 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 instruction. Section 138 does not get attracted" is accepted as good law, the very object of introducing Section 138 in the Act would be defeated. (16) We see grate force in the above submission because once the cheque is issued by the drawer a presumption under Section 139 must follow and merely because the drawer issues a notice to the drawer or to the Bank for stoppage of the payment it will not preclude an action under Section 138 of the Act by the drawer or the holder of a cheque in due course. The object 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 thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d judgments, in our considered view, with great respect are contrary to the spirit and object of Sections 138 and 139 of the Act. If we are to accept this proposition it will make Section 138 a dead letter, for, by giving instructions to the Bank to stop payment immediately after issuing a cheque against a debt or liability the drawer can easily get rid of the penal consequences notwithstanding the fact that a deemed offence was committed. Further the following observations in para 6 in Electronics Trade Technology Development Corporation Ltd., Secunderabad (supra). "........... Section 138 of the Act 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 induce the payee or holder in due course to act upon it. Section 138 dress presumption that one commits the offence if he issues the cheque dishonestly" in 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 accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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