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MADRAS HIGH COURT
Pratap Singh, J.
Mrs. R. Jayalakshmi - Petitioner
versus
Mrs. Rashida - Respondent
Criminal Original Petition Nos. 2778 to 2781-91
Decided on 22.10.1991
Important Points
Where cheque is returned with remarks "refer to drawer" and "payment countermanded by the drawer", such a cheque would not come within the ambit of S. 138, Negotiable Instruments Act i.e. it cannot he treated as returned due to insufficient funds of the drawer.
Petitions praying that in the circumstances stated therein and in the respective affidavits filed therewith the High Court will be pleased to quash the complaint filed on dated 6.11.1990 in C.C. Nos. 1481, 1482, 1483 & 1484 of 1991 respectively before the Judicial Magistrate No. II, Poonamallee and now pending before the IX Metropolitan Magistrate, Saidapet, Madras by invoking the extra Ordinary jurisdiction of this Court under Section 482, Cr. P.C.
Subject
Criminal Law - Dishonored Cheques
Act Referred
Headnote
(Paras 6 & 7)
Held: A plain reading of the Section 138 of the Act would clearly indicate that only in those two contingencies viz., when the cheque was returned unpaid because of insufficiency of funds and/or that it exceeds the amount arranged to be paid, offence is committed. In some cases, where the cheque is returned unpaid with endorsement "refer to drawer", it has been held by this court that endorsement "refer to drawer" is an euphemismistic way of informing the payee that the drawer of the cheque has got no amount to his credit to honour the cheque. Such is not the case here. In all the complaints, the cheques were returned unpaid with endorsements "refer to drawer" and "payment countermanded by the drawer". So the reason of referring to the drawer has been pin pointed in the endorsement itself viz., that payment was countermanded by the drawer. Such a case would not come within the ambit and scope of Section 138 of Negotiable In struments Act. (para 5)
Counsel for the parties:
For the Petitioner: V. K. Sridharan, Adv.
For the Respondent: Ashok Menon, Adv.
Pratap Singh, J. - These petitions coming on for orders on Thursday the 1st day of August, 1991 upon perusing the petition and the respective affidavits filed in support thereof and upon hearing the arguments of Mr. V. K. Sridhatan, Advocate for the petitioner, in all the petitions and of Mr. Ashok Menon, Advocate for the Respondent in all the petitions and having stood over for consideration till this day, the Court made the following Order:
The accused in C.C. 1481 of 1991 to C.C. 1484 of 1991 on the file of judicial Magistrate No. II, Poonamallee, has filed these petitions, under Section 482 Criminal Procedure Code, praying to call for the records in the aforesaid cases and quash the same.
2. The respondent in Crl. O.P. No. 2778/91 had filed the private complaint in c.c. No. 1481/ 91 against the petitioner, arraying her as the accused for offence under Section 138, Negotiable Instruments Act. The allegations in it are briefly as follows:
The accused had dealings with the complainant. She had issued a cheque, dated 20.8.1990 for Rs. 60,550.18 for the goods purchased by her on 5.7:1990 from the complainant. The complainant presented the cheque on 15.9.1990 for encashment. She was informed by communication, dated 18.9.1990 by her bank that the cheque was returned unpaid with an endorsement "refer to drawer" and "payment countermanded by the drawer". The accused did not have funds in the bank. On account of the same, the cheque was returned. The accused had intentionally issued the cheque to defraud the complainant without having sufficient funds. She sent notice, dated 20.9.1990 to the accused giving notice of dishonour and demanding payment. The accused has not chosen to comply with the demand of the complainant. The allegations in the reply sent by the accused that the goods were defective is false. The accused had not paid the amount within the period of 15 days. Hence the complaint.
3. In Crl. O.P. 2779 of 1991, the respondent has filed the private complaint against the petitioner for offence under Section 138, Negotiable Instruments Act, in C.C. 1482/91 on the similar allegations with regard to the cheque, dated 20.9.1990 for Rs. 48,833.75 which when presented for encashment was returned with an endorsement "refer to drawer" and "payment countermanded by the drawer". After giving the statutory notice and non-payment of the amount, that complaint has been laid. In Crl. O.P. 2780/91, the respondent has filed the private complaint against the petitioner in C.C. 1483191 for offence under Section 138, Negotiable Instruments Act on simililr allegations. In respect of the cheque, dated 25.8.1990 for Rs. 27,763.10. In Crl. O.P. 2781/9 I, the respondent has filed the private complaint in C.C. 1484/91 against the petitioner for offence under Section 138, Negotiable Instruments Act on similar allegations, in respect of the cheque, dated 15.9.1990 for Rs. 44,488.72.
4. Mr. V. K. Sridharan, the learned Counsel appearing for the petitioner, would contend that as per Section 138, Negotiable Instruments Act, only in case where the cheque was returned unpaid on the ground of insufficient funds or that it exceeds the amount arranged to be paid, the offence under Section 138, Negotiable Instruments Act, is made out and the cases on hand are not like that and hence offence under Section 138; Negotiable Instruments Act is not made out and on that ground, the complaints are liable to be quashed. Per contra, Mr. Ashok Menon, the learned Counsel appearing for the respondent, would contend that allegations made in the complaint are sufficient to make out offence under Section 138, Negotiable Instruments Act.
5. For appreciating the rival contentions of the learned counsels, the 'material portion of Section 138 of Negotiable Instruments Act needs extraction. It reads as follows:
"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 disch
