An invalid cheque, due to bank merger, does not attract liability under Section 138 of the Negotiable Instruments Act; courts can quash proceedings lacking legal enforceability.

JUDGMENT / ORDER :

The instant petition under Section 482 of Code of Criminal Procedure, 1973 (for short 'Cr.P.C.'), has been filed by the petitioner/accused, seeking to quash the proceedings against her in CC No.911 of 2022 on the file of the Court of II Additional Metropolitan Magistrate, Vijayawada, for the offence punishable under Section 138 read with 142 of the Negotiable Instruments Act, 1881 (for short 'N.I. Act').

2. The facts which led to the filing of this petition, in brief, are as follows :

(a) On 20.11.2018, petitioner/accused borrowed a sum of Rs.25,00,000/- from respondent No.2/complainant for her family and other expenses and executed a promissory note in his favour on the same day agreeing to repay the same with interest @ 24% per annum.

(b) On repeated demands of the complainant, the accused issued a Cheque Bearing No.032824, dated 20.09.2021 for Rs.42,00,000/- drawn on State Bank of Hyderabad, Mahabubabad Branch, Warangal District and on presentation for collection in ICICI Bank, Vijayawada, the said cheque was returned with an endorsement "Invalid Cheque (SBH)" under a return memo dated 22.09.2021.

(c) On 30.09.2021, the complainant got issued a legal notice to the accused and having received the same, the accused issued a reply dated 07.10.2021 requesting to send the attested copies of the promissory note and cheque. In compliance of the same, the complainant got issued a rejoinder dated 16.10.2021 and on receipt of the rejoinder, the accused got issued a reply dated 19.10.2021 with false and frivolous allegations and did not pay any amount to the complainant. As such, the complainant filed a private complaint, which was numbered as CC No.911 of 2022.

(d) Aggrieved thereby, petitioner/accused filed the present petition for quashment of the case against him. Hence the Crl.P.

Arguments Advanced at the Bar

3. Heard Sri Varun Byreddy, learned Counsel for the petitioner. Though notice was sent to respondent No.2, the same was returned and none appeared on his behalf.

4. Learned Counsel for the petitioner/accused would submit that the subject cheque dated 20.09.2021 was issued from State Bank of Hyderabad, which was merged with State Bank of India w.e.f., on 01.04.2017 and hence, the same is invalid. Learned Counsel would further submit that the subject cheque is valid upto Rs.10 lakhs and when a cheque has no negotiability beyond the said amount, it is improbable to say that the same was issued towards payment of legally enforceable debt. Learned Counsel would further submit that the ingredients of Section 138 of N.I. Act do not attract to the present case. In support of his contention, learned Counsel has placed reliance on the judgment of the High Court of Delhi in Premanand Prusty v. Sita Devi , 2023 SCC OnLine Del. 7745 and Allahabad High Court in Archana Singh Gautam v. State of U.P. and another , Application No.9536 of 2024 , dated 05.06.2024.

5. Now the point that would emerge for determination is :

Whether there are any justifiable grounds for quashment of the proceedings against the petitioner/accused in CC No.911 of 2022 on the file of the Court of II Additional Metropolitan Magistrate, Vijayawada, for the offence punishable under Section 138 read with 142 of Negotiable Instruments Act?

6. A bare perusal of Section 482 makes it clear that the Code envisages that inherent powers of the High Court are not limited or affected so as to make orders as may be necessary; (i) to give effect to any order under the Code or, (ii) to prevent abuse of the process of any Court or, otherwise (iii) to secure ends of justice. A Court while sitting in Section 482 jurisdiction is not functioning as a Court of appeal or a Court of r