The central legal point established is that a specific allegation of dishonest intention at the time of issuing a cheque can support a charge of cheating under Sec. 420 I. P. C.

V. BHASKARA RAO, J.

( 1 ) THIS petition is filed to quash the proceedings in C. C. No. 55 of 1994 on the file of the Court of the Judicial First Class magistrate, Palasa.

( 2 ) THE first respondent herein filed a private complaint alleging that the first petitioner herein to discharge a debt of rs. 38,000/- with the signature of the second petition issued a post-dated cheque to the first respondent. When the first respondent presented the cheque to the Bank, the same was returned saying that the funds were not sufficient to honour the same. The complaint of the first respondent is that the petitioners with a dishonest intention to deceive the first respondent issued the cheque know well that there were no funds in their account and thereby committed an offence under Sec. 420 I. P. C.

( 3 ) THE learned counsel for the petitioners contended that when he cheque is dishonoured, the appropriate remedy to the first respondent-complainant is to file a complaint under Sec. 138 of the Negotiable instruments Act after following the procedure laid down under that provision and the complaint filed under Sec. 420 I. P. C. is not maintainable. Relying upon the decision of this Court in M/s. Rachana Flour Mills vs. L. Banagadiya (1) 1985 APLJ (Crl.) 303, he contended that the petitioners cannot be held criminally liable on the dishonour of a cheque. On the other hand, the learned counsel for the first respondent contended that the allegation in the complaint is specific that the petitioners were having dishonest intention to cheat the complainant at the time of issuing the cheque. He further contended that non-filing of a complaint under Sec. 138 of the Negotiable Instruments act will not disentitle the complainant from filing complaint under Sec. 420 I. P. C. , and that decision felied upon by learned counsel for the petitioners in Rachan Flour Mill s case is not applicable to the facts of the present case.

( 4 ) IN view of the above contention, the question to be decided is whether any ground is made out for quashing the proceedings in C. C. No. 55 of 1994 on the file of the Court of Judicial First Class magistrate, Palasa.

( 5 ) THE allegations made in the complaint clearly show that on the date of issuing of the cheque itself the petitioners were having dishonest intention to deceive the first respondent knowing that there were no sufficient funds in their account. In Rachana flour Mill s case also this Court held that a drawer of cheque cannot be held criminally liable on cheque being dishonoured unless it is established that he knew at the time of drawing cheque there was no money in bank and he intended to cheat the payee. In the facts and circumstances of the present case, the said decision is not applicable to the present case.

( 6 ) IN S. Muthu Kumar v. State (2) 1995 cri. L. J. 350, the High Court of Madras held that the allegations in the complaint that the complainant was dishonestly and fraudulently induced by the accused in delivering goods against post-dated cheques which were knowingly will not be honoured, are sufficient to register an offence of cheating.

( 7 ) IN A. Veerabadra Rao v. Government of Andhra Pradesh (3) 1994 (1) an. W. R. 13 (NRC) this court held that when allegations in he complaint reveal that the accused delivered cheques knowing that they will be dishonoured, the proceedings in pursuance of F. I. R. , are not illegal and the police can file charge sheet after investigation either under Sec. 420 I. P. C. , or Sec. 138 of the Negotiable Instruments act, whichever is applicable. It was further held that complaint cannot be quashed on the ground that it was filed under Sec. 420 i. P. C.

( 8 ) FROM the above decisions, it is clear that where there is an allegation in the complaint or charge-sheet that at the time of issuing of cheque, the person issuing the cheque was having dishonest intention of cheating the person to whom the cheque was issued, then it cannot be said that no offence of cheating is made out b

Click Here to Read the rest of this document