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TMI Blog1999 (8) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 138934 dated 31.7.1997 for the said sum. The 2nd petitioner executed a personal guarantee and security of shares worth Rs. Two crores. On the basis of those documents, the respondent extended the period of loans till 31.7.1997. On 24.7.1997, the 1st accused sent a letter requesting the complainant not to present the cheques on 31.7.1997, despite which the cheques had been presented by the complainant on 31.7.1997 in the Bank of Baroda, Alwarpet, Chennai and the cheques were returned on 1.8.1997 with the endorsement payment stopped by drawer . The complainant issued a notice dated 5.8.1997 and the same has been returned unserved with the endorsement refused on 12.8.1997. Thereafter the complainant has preferred these complaints under section 138 of the Negotiable Instruments Act, which were taken in C.C.Nos. 7080 and 7081 of 1997 by the learned XVIII Metropolitan Magistrate, Saidapet, Chennai. 3. The petitioners have raised five grounds for quashing the said proceedings. 4. The respondent/complainant has filed counter refuting those grounds. 5. The major grounds of challenge are: (i) By letter dated 24.7.1997 the petitioners requested the respondent not to present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the account for the discharge of the debt in whole in part or other liability is returned by the bank with the endorsement like, in this case, (1) refer to the drawer (2) instructions for stoppage of payment and (3) amount exceed arrangement , it amounts to dishonour within the meaning of S. 138 of the Act. ....... Shri Nageswara Rao, learned counsel appearing for the respondents, contended that stoppage of payment due to instructions does not amount to an offence under S. 138 and that, therefore, the ingredients in S. 138 have not been satisfied. We find no force in the contention. This decision was followed by Their Lordships of the Supreme Court in K.K. Sidharthan v. Praveena Chandran, (1996)6SCC369 . After quoting Section 138, Negotiable Instruments Act, in para-3 Their Lordships held- This shows that section 138 gets attracted in terms if cheques is dishonoured of insufficient funds or where the amount exceeds the arrangement with the bank. It has, however, been held by a Bench of this Court in Electronics Trade and Technology Development Corporation Limited v. Indian Technologists And Engineers (Electronics) (P) Ltd. 1996CriLJ1692 that even if a cheque is dish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, S. 138 does not attracted. The real meaning conveyed by the said decision in M/s. Electronics Trade and Technology Development Corporation Limited, Secunderabad v. M/s. Indian Technologists Engineers (Electronics) Private Ltd, 1996CriLJ1692 is that instruction for 'stoppage of payment' amounts to dishonour within the meaning of Section 138 of Negotiable Instruments Act and the same was succinctly pointed out by Their Lordships in the case of Sidharthan v. Pravenna Chandran, (1996)6SCC369 . Therefore, the view expressed by this Court in Mubarak Nisha v. Subramanian, 1997 (1) Cri 55 is not in consonance with the view expressed by Their Lordships of the Supreme Court. When Their Lordships of the Supreme Court have clearly held that instruction for 'stoppage of payment' would amount to dishonour within the meaning of Sec. 138 of the said Act, no different interpretation can be given to the said decision in M/s. Electronics Trade and Technology Development Corporation Limited, Secunde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10 and they are in control of day to day management of the affairs of the company and as such have committed offence under section 138 of Negotiable Instruments Act. Similar allegations are found in C.C.No. 7081 of 1997 in respect of accused 2 to 11. In Sham Sundar v. State of Haryana, 1989CriLJ2201 , Their Lordships of the Supreme Court held- It is, therefore, necessary to add an emphatic note of caution in this regard. More often it is common that some of the partners of a firm may not even be knowing of what is going on day to day in the firm. There may be partners, better known as sleeping partners who are not required to take part in the business of the firm. There may be ladies and minors who were admitted for the benefit of partnership. They may not know anything about the business of the firm. It would be a travesty of justice to prosecute all partners and ask them to prove under the proviso to sub-section (1) that the offence was committed without their knowledge. It is significant to note that the obligation for the accused to prove under the proviso that the offence took place without his knowledge or that he exercised all due diligence to prevent such offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not liable. 8. Both these complaints were filed on 24.9.1997, whereas the resolution was passed authorising Mr. K.G. Sampath - Manager - Finance to sign the complaint, execute vakalat, engage Advocate and give evidence in the matter of prosecution against Modern Denim Ltd. and its Directors, was given only on 17.11.1997, after filing of complaint and therefore the complaint filed by Sampath is not in accordance with law. The respondent has relied on a decision of the Supreme Court in All India Reporter Ltd v. Ramchandra, AIR1961Bom292 , wherein it was held at page 295- Order 6, Rule 14, provides that in certain circumstances a pleading may be signed by any person duly authorised by the plaintiff to sign the plaint or to sue on his behalf. The expression signed by any person duly authorised by him to sign the same in rule 14 need not be restricted to written authorisations. If the authorisation is proved, even an oral authorization should be taken as sufficient and there is no reason to read Orders 6, rule 14 as requiring written authorization or a power of attorney. Though the said decision is based on Order 6, Rule 14 C.P.C., there is no distinction between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intention, he shall be punished. Because there is a civil remedy available, it cannot be said the payee cannot come to a criminal court by way of complaint under section 138 of Negotiable Instruments Act even after the dishonour of the cheque. Therefore this argument advanced on the side of the petitioner cannot be accepted. 10. The registered Office of the 1st accused is in Pochkhanwala Road, Worli, Mumbai, however, accused 2 to 10 in CC.No. 7080 of 1997 and accused 2 to 11 in CCNo. 7081 of 1997 were living in different places. The notices have been sent to their respective addresses as shown in the complaints and the same were returned. As far as the 1st accused is concerned, the registered office is at Vijay Path, Tilak Nagar, Jaipur and therefore the notice has been sent to Jaipur and some of the accused are also residing at Jaipur. As far as the company is concerned, the notice has been sent to the address of the registered office and accordingly it has been sent to Jaipur. As far as the other accused are concerned, the notice has been sent to their respective addresses and all of them refused to receive the notice. It is one thing to say that the notices were sent to a wro ..... 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