The main legal point established is that the dishonour of a cheque, without more, does not necessarily constitute cheating under Section 420 of the Indian Penal Code.

1. Sitakant Govind Bhobe, the petitioner herein was accused of having committed an offence under Section 420 of the Indian penal Code. The case of the original complainant, who is the first respondent before me is that the accused gave a contract for construction of a road to the complainant; after the road was constructed the accused was avoiding the settlement of accounts; eventually accounts were settled in May 23, 1972 and it was found that the accused had to pay to the complainant a sum of Rs. 2370.94; the accused gave on the same day a cheque on the Central Bank of India for the amount due to the complainant and the complainant passed a receipt for the payment of the amount; the cheque was dishonoured; the complainant therefore filed a complaint before the Judicial Magistrate, First Class, Mapusa under Section 420 of the I.P.C. The case of the defence was that the complainant presented him with false accounts and made the accused part with Rs. 87.80 in excess of the amount due. According to the accused, the complainant did not deduct from the amount due by the accused to the complainant the amount that the complainant owed to the accused because of penalty for delayed completion of the work, totalling Rs. 1,445/-. The accused states that since the cheque was passed for an excess amount, he advised his bankers not to honour the cheque.

2. On these facts which appear from the records of the trial Court, the learned J.M.F.C. discharged the accused in exercise of the powers conferred upon him under Section 253(1) of the Criminal Procedure Code 1898, and it seems to me that he was right in doing so.

3. The first attack made by Shri Kolwalkar against the judgment of the learned Sessions Judge, Panaji which set aside the order of the Learned Magistrate is that the learned Sessions Judge had no jurisdiction to order the learned Magistrate to frame a charge and try the accused. Section 398, Criminal Procedure Code which is the only section which could possibly be invoked by the learned Sessions Judge empowers him to direct the Magistrate to make further inquiry into the case of any person accused of an offence who has been discharged in a complaint which has been dismissed. This point of law is elementary and it appears that the learned Sessions Judge did not take the care of looking up the law before he proceeded to pass the order.

4. The next question is that under Section 420, Indian Penal Code the accused could be charged only if he had induced the complainant to make a valuable security or anything which is signed or sealed and which is capable of being converted into a valuable security. The thing which the accused is alleged to have induced the complainant to part with, in the present case, is a writing duly signed, acknowledging the receipt of the cheque. Such a receipt is neither a valuable security nor is it a thing which is capable of being converted into a valuable security. When presented with this position of law, Shri Patkar, learned advocate for the complainant did not contend that the receipt was capable of being converted into a valuable security. He advanced the argument that the accused knew, when he paid the cheque, that there were no funds available in the Bank to honour the cheque and that this by itself constituted cheating. First of all the statement that there were no funds available in the Bank to honour the cheque is not supported by the record. The slip issued by the Bank snows that the cheque was returned because it was "referred to the drawer". The slip contains a number of printed items. The ninth item is, "Refer to Drawer" and the tenth item "Funds insufficient". The item ticked was the ninth item namely "Refer to Drawer". There is no tick against the tenth item i.e., "Funds insufficient". Secondly, the argument that the issuance of a cheque without recovery constitutes an offence under Section 420 is fallacious. The cheque was passed for work already done. Except for the receipt nothing was