IMPORTANT POINT
Countermanding of a cheque by a stop memo hardly affects the rights of the complainant to initiate proceedings u/s 138 of the Negotiable Instruments Act when the complainant has specifically stated that the accused had no amount in his account with the bank for honouring the cheque.

ORDER

K. Sreedharan, J. - This is a petition filed under section 482, of the Code of Criminal Procedure for quashing the complaint in C.C. 468/1990 on the file of the Judicial 1st Class Magistrate's Court, Punalur. Learned counsel representing the petitioner canvassed the correctness of the decision in Calcutta Sanitary Wares v. Jacob1. Consequently a learned Single Judge referred the petition to Division Bench for disposal.

2. Before dealing with the question of law raised, we consider it advantageous to refer to the averments made by the complainant before the Court below. They are in the following terms. Accused entered into an agreement for sale of his property with the complainant on 21.3.1989. In pursuance of that agreement, accused received Rs. 21,001/- in three instatements. Since the contract fell through, he issued cheque dated 8.12.1989 bearing No. 787656 drawn on the Cheppad Branch of the Lord Krishna Bank for repayment of the amount. Thereafter with the intention of cheating the complainant and to make unlawful enrichment to himself, the accused caused the issuance of a lawyer's notice on 25.9.1989 alleging incorrect fatts. By the intervention of mediators, accused agreed to remit sufficient amount in the bank so as to honour the cheque. The complainant agreed to forgo interest on the amount. Contrary to this agreement, without remitting the amount in the bank for honouring the cheque, accused informed the bank to stop payment of the amount coveled by the cheque. Complainant presented the cheque through the Punalur Branch of the Canara Bank for encashment. That cheque was dishonoured by memo dated 4.4.1990 stating "Payment stopped by the Drawer". The complainant proceeded on to state that the accused had no funds with his bank either on 8.12.1989 or on any subsequent date and so he issued stop memo to the bank. When the cheque was dishonoured, a lawyer's notice was sent to the accused on 18.4.1990 requiring him to pay the amount covered by the cheque. The notice was received by the accused on 20.4.1990. Accused did not pay the amount. Hence liable for offences under section 138 of the Negotiable Instruments Act, hereinafter referred to as "the Act", and section 420 of the Indian Penal Code.

3. For a proper understanding of the provisions contained in section 138 of the Act, we read the same :

"138. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person, from out of that account for the discharge in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both;

Provided that nothing contained in this Section shall apply unless -

(a). the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier;.

(b). the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c). the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation. - For the purposes of this section, "debit or other liability" means a legally enforceable deb