IMPORTANT POINT
When the cheque has peen returned unpaid with bank endorsement "payment stopped" & there is no averment in the complaint that bank returned cheque due to insufficient funds the complaint can not be said making out offence u/s. 138 of Negotiable Instruments Act.

M.M. Pareed Pillay, .J- Petitioner is the accused in S.T. 56 of 1991 of the Court of the Additional Judicial Magistrate of the First Class, Palakkad. First respondent filed the complaint alleging offence under section 138 of the Negotiable Instruments Act, for short, the Act. Main contention of the petitioner is that Section 138 of the Act is not attracted as the cheque was returned unpaid with the bank's endorsement "payment stopped by drawer". It is argued that return of the cheque with the said endorsement would not come under the purview of section 138 and hence no offence has been made out against the petitioner, especially when there is no allegation in the complaint that the endorsement was made by the bank as there was no sufficient money in the bank.

2. Section 138 of the Act provides for punishment only in case cheque was returned unpaid due to

i. insufficiency of the amount in the account of the drawer of the cheque to honour the cheque and

ii. the amount covered by the cheque exceeded the arrangement to be paid to the account; and

iii. not on any other ground.

3. In the complaint it is stated that the cheque was returned with the endorsement '''payment stopped by the drawer". As the cheque was returned with the said endorsement and as there is no averment in the petition that the bank dishonoured the cheque for want of adequate funds in the account of the drawer it is not possible to hold that Section 138 of the Act is attracted. The section provides for two eventualities only and no other. As the ingredients under section 138 is not disclosed in the complaint no offence under the said Section is made out.

In that view of the matter the complaint is liable to be quashed. The complaint is quashed.

The Criminal M.C. stands allowed.

Petition allowed.