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1998 (3) TMI 713
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....of the aforesaid cases pending in the Court of the learned Metropolitan Magistrate's 20th Court at Mazgaon, Mumbai be quashed and set aside. The petitioners are sought to be prosecuted in the aforesaid cases for an alleged offence under section 138 of the Negotiable Instruments Act (for short 'the Act'), as amended. All the petitioners are accused in the learned Metropolitan Magistrate's 20th Court, Mazgaon, Mumbai. The petitioner Nos. 2 to 5 in Writ Petition Nos. 645/98, 646/98, 647/98, 648/98, 651/98 and petitioner Nos. 2 to 6 in Writ Petition Nos. 3690/97, 3691/97 and 3692/97 are said to be not at all concerned with the management of the partnership firm. Criminal Application Nos. 624 of 1998 and 694 of 1998, have been filed by respondent No. 2 for vacation of the interim order of stay passed on 22nd December, 1997 in Writ Petition Nos. 3690/97, 3691/97 and 3692/97. 2. For the purposes of this order, the facts are taken from Criminal Writ Petition No. 645 of 1998. 3. A complaint was filed by Dr. Hasmukhlal Chhotalal Mody, respondent No. 2 herein, alleging that he is the creditor of the petitioners. Petitioner No. 6 is a partnership firm registered under the....
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....the end of August, 1996. Petitioner No. 1 had also promised to pay further interest on the amount of cheques separately for the period from 1-4-96 to 31-8-1996. Petitioner No. 1 had given assurances that the said cheques will be positively honoured when presented for realisation in the first week of September, 1996. Relying upon the aforesaid assurances respondent No. 2 had not deposited the cheques till 4th September , 1996. On presentation of the said cheques by respondent No. 2, the same were dishonoured and returned unpaid with the remarks "payment stopped by the drawer". Upon the dishonour of the aforesaid cheques, respondent No. 2 served the necessary notice on 14th September, 1996 calling upon the petitioners to make payment within a period of 15 days from the receipt of the notice. This notice was sent by registered post with the A.D. as well as by ordinary post under certificate of posting. This was duly received by the petitioners. The petitioners sent a reply through their Advocate by letter dated 30th September, 1996. According to respondent No. 2, the petitioners had raised false and frivolous contention about their liability for the payment against the dishonoured che....
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....ue involved in the present application. The next judgment of the Hon'ble Supreme Court in K.K. Siddharthan v. T.P. Praveena Chandran and others, reported in 1997 All.M.R. (Cri.) 304, has confirmed the view taken by the Supreme Court in its earlier judgment in the case of Electronics Trade and Technology Development Corpn. Ltd. v. Indian Technologist & Engineers (Electronics) (P) Ltd. and another." 7. Mr. Jha, appearing for the petitioners, has vehemently argued that at the time when the learned Magistrate issued process, the law of the country as enunciated by the Supreme Court was that if a creditor is put to notice not to present the cheque for encashment, and yet the creditor presents the cheque for encashment, and the same are dishonoured, no offence would be committed under section 138 of the Act. Relying on the letter dated 16th August, 1996, Mr. Jha submits that the learned Magistrate committed an error of jurisdiction in issuing process. In view of the above it is submitted that the petitions deserve to succeed and the proceedings deserve to be quashed on this short ground. Mr. Jha has further submitted that the learned Magistrate would be entitled to take into accou....
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....nt petitions are an abuse of the process of Court as the petitioners have the alternative remedy of moving the learned Magistrate for withdrawal of process. It is submitted that all the arguments raised by the petitioners in the present petitions could well have been raised before the learned Magistrate. In support of his submission learned Counsel relies on the judgment of the Supreme Court 1992CriLJ3779 K.M. Mathew v. State of Kerala, Mr. Mody vehemently contends that the conduct of the petitioners is such that they deserve to be prosecuted for offences under sections 191, 192, 193 & 199 of the Indian Penal Code. It is submitted that both the letters mentioned above have been fabricated which amounts to creating false evidence. Mr. Mody further submits that when examining the matter under section 482 of the Criminal Procedure Code, this Court will assume that all the averments made in the complaint are correct. If even after assuming the said statements to be correct, this Court comes to the conclusion that no offence has been made out only then the proceedings before the learned Magistrate can be quashed. So far as point of law raised by Mr. Jha in paragraph 4 of the petition, r....
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....he second reasoning of the High Court is contrary to the decision of this Court (rendered by a Bench of two Judges) in Electronics Trade and Technology Development Corporation Ltd., Secunderabad v. Indian Technologists & Engineers (Electronics) (P). Ltd. & another, 1996CriLJ1692 . While interpreting section 138 of the Act, it firstly observed as under : "It would thus be clear that when a cheque is drawn by a person on an account maintained by him with the banker for payment of any amount of money to another person out of the account for the discharge of the debt in whole or in part or other liability is returned by the Bank with the endorsement like (1) in this case, "refer to the drawer" (2) "instructions for stoppage of payment" and stamped (3) "exceeds arrangement", it amounts to dishonour within the meaning of section 138 of the Act. On issuance of the notice by the payee or the holder in due course after dishonour, to the drawer demanding payment within 15 days from the date of the receipt of such a notice, if he does not pay the same, the statutory presumption of dishonest intention, subject to any other liability, stands satisfied." 10. It then took up for....
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....t Corporation Ltd., (supra): "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." 14. The Learned Counsel for the appellant submitted that if the attention of the Court was drawn to the provisions of section 139 of the Act which according to him, had an important bearing on the point in issue, the Court would certainly not have made the above observations. The said section reads as under : "Section 139. Presumption In favour of holder :- It shall be presented, unless the contrary is improved, that the holder of a cheque received the cheque, of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability." 15. According to the learned Counsel if the observations of this Court in Electronics Trade & Technology Development Corporation Ltd., Secunderabad (supra) to the effect," Suppose after the cheque is issued ....
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....t 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 draws presumption that one commits the offence if he issues the cheque dishonestly" in our opinion, do not also lay down the law correctly. 21. It is needless to emphasize that the Court taking cognizance of the complaint under section 138 of the Act is required to be satisfied as to whether a prima facie case is made out under the said provision. The drawer of the cheque undoubtedly gets an opportunity under section 138 of the Act to rebut the presumption at the trial. It is for this reason we are of the considered opinion that the complaints of the appellant could not have been dismissed by the High Court at the threshold." Section 140 of the Act provides that it shall not be a defence in a prosecution for an offence under section 138 of the Act that the drawer had no reason to believe when he issued the cheque that the cheque may be dishonoured on presentation for the reasons stated in that section. Thus clearly for committing an....
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....ent, cannot be said to be unreasonable and violative of Article 14 of the Constitution of India." The law having been thus declared by the Supreme Court and this Court, these petitions have to be held to be without any substance. I also do not find any substance of Mr. Jha that the petitions deserve to be allowed qua petitioners No. 2 to 5 in Writ Petition Nos. 645/98, 646/98, 647/98, 648/98, 651/98 and Petitioners No. 2 to 6 in Writ Petition Nos. 3690/97, 3691/97 and 3692/97, as they were only dormant partners. These vague assertions are not sufficient to quash the complaints at the threshold. These petitioners will undoubtedly get an opportunity to rebut the presumption of dishonest intention, under section 139 of the Act. 10. In view of the above all the petitions are dismissed. Interim orders of stay are vacated. Criminal Application Nos. 624/98 and 694/98 are disposed of accordingly. Rule is discharged in Cr.W.P. Nos. 3690, 3691 and 3692 of 1997. All the aforesaid observations made with regard to the documents and matters of fact shall not be taken into account by the learned Magistrate at any subsequent stage. Certified copy expedited. 11. Petitions dismissed. ....