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TMI Blog1991 (2) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... 989, annexure P-1 under Section 138 of the Negotiable Instruments Act, 1881 (for short the Act ), and Section 406/ 420 of the Indian Penal Code, the subsequent proceedings and the impugned orders, annexures P-2 and P-3. 2. The impugned complaint was brought by Kapoor Brothers Roller Flour Mills, Panchkula ( respondent-firm herein), under Section 138 of the Act, read with Section 406/420 of the Indian Penal Code, The respondent-firm pleaded therein that it was a registered partnership firm carrying on the business of running a flour mill. It supplies flour mill products. In December, 1988, petitioner No. 2 approached the respondent-firm for the supply of maida on regular basis on credit and this offer was accepted. It was agreed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment in question was not made and, as such, the offence under Section 138 of the Act, was committed. From the very beginning, the intention of the petitioners was dishonest and, as such, offences under Section 406/ 420 of the Indian Penal Code had also been committed. 3. The learned Magistrate issued process under Section 138 of the Act. A revision was then preferred to the Court of Session which was heard by the Additional Sessions Judge, Ambala, who, vide order dated July 14, 1990, dismissed the same. 4. The petitioner-firm challenges the orders of the Magistrate and of the Additional Sessions Judge on the ground that the court at Ambala had no territorial jurisdiction to try the case since the cheques were issued and dishonoure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 138 shall be a complete offence only if the three conditions specified in the provisos to the section also exist. The dishonouring of the cheque must be for the cause that the amount of money standing to the credit of the drawer is not sufficient to honour the cheque or that it exceeds the financial arrangement made with the bank. In the complaint, the respondent-firm has given all the facts on the basis of which it claims the commission of the offence under Section 138. The term refer to drawer is a courteous way adopted by a bank to show its inability to honour the cheque for want of funds. The petitioner-firm has not been able to show that the term refer to drawer in the present case conveyed a different meaning. Section 142(b) provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a cause of action does not arise until the commission of the offence. When Section 142(b) says that the cause of action is the one which arises under Clause (c) of the proviso, such cause of action is the omission to make payment within fifteen days of the receipt of the notice. Thus, there is no force in the contention of learned counsel that no offence under Section 138 of the Act had been committed. 7. Coming to the question of jurisdiction, it is to be considered that the issuance of the cheques and their dishonouring are only a part of the cause of action and that the offence was complete only when the petitioners failed to discharge their liability to the respondent-firm. For discharging a debt, it is the debtor who has to fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.--For the purposes of this section,-- (a) 'company' means any body corporate and includes a firm or other association of individuals ; and (b) 'director' in relation to a firm, means a partner in the firm. 9. Petitioner No. 1 is the firm and petitioners Nos. 2 and 3 are its partners. It was Baljinder Singh who, acting as the managing partner, issued the cheques. A similar provision is contained in Section 278B of the Income Tax Act and in the two judgments referred to as Puran Devi v. Z.S. Klar, ITO [1988] 169 ITR 608 and Basal Tool Co. v. ITO, it has been interpreted that only the person who is in charge of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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