IYYAPU PANDURANGA RAO, J.

( 1 ) THE petition is directed under section 482 of the Code of Criminal Procedure (hereinafter referred to as the Code to call for the records in C. C. No. 367 of 1991 on the file of the Metropolitan Magistrate, Hyderabad and to quash the same. The facts which are not in dispute are that the first petitioner is a company of which the second petitioner is the Director. In lieu of a hire purchase arrangement a cheque was issued by the first petitioner for Rs. 5 lakhs on 30/03/1991 on the Karnataka Bank, Bombay. The same was presented for encashment on 1-4-1991 and the same was bounced with an endorsement "funds expected, present again". The same was represented again in the Month of 19/05/1991 and on the second occasion too, it bounced with an endorsement "referred to drawer". As such having issued the statutory notice, the first respondent filed C. C. No. 367/91 on the file of the V Metropolitan Magistrate, Hyderabad under section 138 of the Negotiable Instruments Act. Thereupon the petitioners who are the accused, filed the present criminal petition under section 482 of the Code to quash C. C. 367/91 pending on the file of the V Metropolitan Magistrate, Hyderabad. The fact that the petitioners issued the cheque dt. 30-3-1991 for Rs. 5 lakhs on the Karnataka Bank is not in dispute. Similarly the further fact that the said cheque was presented at Hyderabad for collection on 1-4-1991, on 8-4-1991 the said cheque was bounced with an endorsement "funds expected, present again" and for the second time when it was presented in the month of May, 1991 it once again bounced as per the endorsement of the bank "referred to drawer" dt. 16-5-1991 is not in dispute. In V. R. Krishnan v. V. S. Narayanan, 1990 (1) Madras Weekly Notes (Cri) 76, it is observed that in the banking parlance the reason "referred to drawer" when cheques are returned unpaid is used generally of returning the cheque for want of funds from the drawer s account. To the same effect are the decisions reported in Voltas Limited v. Hiralal Agarwala (Cal) 1991 (71) Com Cas 273 : (1991 Cri LJ 609)

( 2 ) IN this case it is more than evident that on both the occasions, the cheque was bounced due to paucity of funds in the account of the 1st petitioner. The correspondence between the parties and as a matter of fact, the averments in the Criminal Petition categorically show that the cheque in question bounced on both the occasions for want of funds. In the Telex dated 1 referring to the first dishonour the first petitioner mentioned as follows : "we could not honour due to financial constraint" The said Telex is annexure c in the material papers. Similarly in the latter dated 26/05/1991 by the petitioners to the whole time director, it is mentioned as follows :"we explain to you, due to various financial constraints we were not able to make payments in time due to which arrears were accumulated. We have every intention of clearing up of the arrears". It is significant to note that this letter was addressed after the cheque in question was bounced for the second time.

( 3 ) COMING to the averments in the criminal petition it is observed as follows : "as the petitioner is in financial difficulties for the last about one year the first petitioner has been irregular in payment of instalments to the first respondent - The petitioner No. 1 by their Telex message dated 13-5-1991 expressed their financial difficulties and requested respondent No. 1 to bear with the petitioner No. 1.

( 4 ) THE petitioner No. 1 by its letter dated 10/07/1991 once again stated the financial crisis through which it was passing requested the first respondent to wait for some more time for payments.

( 5 ) THUS, even in the petition it was clearly admitted that the first petitioner company was passing through financial crisis and consequently could not arrange for payment of the amount covered by the cheque in question. Thus this is not a case where the Andhra Pradesh decision refer

Click Here to Read the rest of this document