2009 (7) TMI 1143 - SC - Indian Laws

Supreme Court quashes criminal complaint due to non-compliance with Section 138

JUGESH SEHGAL Versus SHAMSHER SINGH GOGI

The Supreme Court allowed the appeal, set aside the High Court's order, and quashed the criminal complaint against the appellant. The Court found that the ... Whether or not the cheque was issued by the appellant is pre-mature as the same would be determined only after the evidence has been led by the parties/ Whether or not in the light of the afore-mentioned factual position, as projected in the complaint itself, it was a fit case where the High Court should have exercised its jurisdiction under Section 482 of the Code? Held that:- Appeal allowed. There is little doubt that the very first ingredient of Section 138 of the Act, enumerated above, is not satisfied and consequently the case against the appellant for having committed an offence under Section 138 of the Act cannot be proved. Bearing in mind the legal position it was a fit case where the High Court, in exercise of its jurisdiction under Section 482 of the Code, should have quashed the complaint under Section 138 of the Act. Issues Involved:1. Whether the cheque in question was issued by the appellant.2. Whether the necessary ingredients of Section 138 of the Negotiable Instruments Act, 1881 were satisfied.3. Whether the High Court should have exercised its jurisdiction under Section 482 of the Code of Criminal Procedure to quash the complaint.Issue-wise Detailed Analysis:1. Whether the cheque in question was issued by the appellant:The complainant alleged that the appellant, along with his family members, issued a cheque for Rs. 24,92,115/- which was dishonored due to the closure of the account. The appellant denied having any business dealings with the complainant and asserted that the cheque was not issued by him. The High Court dismissed the petition for quashing the complaint against the appellant, stating that the plea involved a disputed question of fact. However, it was noted that the cheque was from an account maintained by one Ms. Shilpa Chaudhary, not the appellant, and the account had been closed prior to the issuance of the cheque, thus questioning the validity of the cheque being attributed to the appellant.2. Whether the necessary ingredients of Section 138 of the Negotiable Instruments Act, 1881 were satisfied:Section 138 of the Act requires certain conditions to be fulfilled for an offence to be constituted, including:- The cheque must be drawn on an account maintained by the drawer.- The cheque must be issued for the discharge of a debt or liability.- The cheque must be presented within six months.- The cheque must be returned unpaid due to insufficient funds or exceeding the arrangement.- A notice demanding payment must be issued within 30 days of receiving the return memo.- The drawer must fail to make the payment within 15 days of receiving the notice.In this case, the cheque was not drawn on an account maintained by the appellant but by another individual, and the account was closed before the cheque was allegedly issued. Thus, the fundamental requirement that the cheque be drawn on an account maintained by the drawer was not met, invalidating the basis for the complaint under Section 138.3. Whether the High Court should have exercised its jurisdiction under Section 482 of the Code of Criminal Procedure to quash the complaint:The powers under Section 482 of the Code are to be exercised sparingly and in the rarest of rare cases to prevent abuse of the process of the court. The Supreme Court noted that the High Court should have quashed the complaint as the continuation of proceedings would be an abuse of the court's process. The complaint itself acknowledged that the account from which the cheque was issued was not maintained by the appellant, thus failing to meet the essential criteria of Section 138. Therefore, the High Court's refusal to quash the complaint was deemed incorrect.Conclusion:The Supreme Court allowed the appeal, set aside the High Court's order, and quashed the criminal complaint against the appellant, affirming that the necessary ingredients of Section 138 were not satisfied and that the High Court should have exercised its jurisdiction under Section 482 to quash the proceedings.