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Andhra Pradesh High Court
Ch. S.R.K. Prasad, J.
Cheruku Enterprises —Petitioner
versus
State Bank of Hyderabad & Anr. — Respondents
Crl. Petition No. 1141 of 2000
Decided on 26-6-2002
Counsel for the parties:
For the Petitioner:Mr. Abhinand K. Shavili, Advocate.
For the Respondent No. 1:Mr. A.V.S.S. Prasad, Advocate.
For the Respondent No. 2: Public Prosecutor.
Important Points
1. Complaint by holder in due course of negotiable instrument under Section 138 of NI Act is maintainable.
2. Section 138 of Negotiable Instruments Act does not empower to proceed against any person who has not drawn the cheque except in case covered under Section 141 of the Act.
Headnote:(i) Negotiable Instruments Act, 1881 — Section 138 — Holder-in-due course can maintain the comp-laint under — Bank having dis-counted the cheques became holder in due course and as the cheques bounced bank was competent to maintain complaint. (Para 5)
(ii) Negotiable Instruments Act, 1881 — Section 138 — Dishonour of cheque — Petition to quash comp-laint and proceedings — Petitioner was distributor for computer sets — A dealer issued cheques for supply of computers — Post dated cheques presented petitioner to complainant bank were discounted by bank — Cheques bounced and bank filed complaint against petitioner — Drawer of cheque i.e., dealer was shown as witness in complaint instead of being impleaded as accused — Bank’s right was only to proceed against drawer of cheque and no right to proceed against third party — Petitioner being not the drawer of cheque he could not be proceeded against — Proceedings were liable to be quashed. (Para 6)
Result: Petition allowed.
Ch. S.R.K. Prasad, J.— The petitioner invokes the inherent powers of this court under Section 482 Cr.P.C. for quashing of the procee-dings in C.C. No. 333 of 1999 on the file of the V Metropolitan Magistrate, Nampalle, Hyderabad.
2. It is necessary to have brief resume of the background of the facts of the case to appreciate the contentions canvassed. The petitioner deals with the sale of computers and is the distributor for Andhra Pradesh Region for Leo Computers. Sancha-yani, Madras is the All India Distri-butors for Leo Computers. The Head Office of Leo Computers is Taipee Taivan. The petitioner in turn has appointed a few dealers in Andhra Pradesh region for supply of compu-ters and always insists advanced post-dated cheques to supply computers to the dealers. The petitioner has opened cash credit account No. 50584 during September 1998 with the State Bank of Hyderabad, Sanjivareddi Nagar branch and since then it has been doing all transactions of the petitioner with the said first respondent. A loan of five lakh rupees sanctioned for running business. The petitioner has furnished 92 lakh worth properties as security to the bank. While the matters stood thus, one of the dealers of the petitioner at Vijayawada by name Someswar Rao had placed order for supply of 12 computers systems with the petitioner. The petitioner has collected post dated cheque bearing No. 337416 dated 23-10-1998 for a sum of six lakh rupees from the dealer. It was drawn on Punjab and Sindh Bank, Vijayawada for a sum of Rs. 6 lakh by Someswar Rao. After collecting the cheques from the dealer, 12 computers systems were supplied. In order to pay to Sanchayani Leo Computers, Madras the petitioner has approached the bank for discounting the cheque. The petitioner has to pay the same to the said Sanchayani Leo Computers, Madras. On the strength of Field Officer’s report the Branch Manager was pleased to credit the cheque in favour of the petitioner and the petitioner has discounted the cheque and paid money to Sanchayani for supply of 12 computes. The dealer at Vijayawada cancelled the order for purchase of 12 computers by which time the petitioner already purchased 12 computers systems by paying cash. Immediately it approached Sanchayani Leo Computers, Madras to take back the systems and pay back the amount collected. Hence the Sanchayani Leo Computers, Madras collected the computers from the petitioner but they did not return the money collected from the petitioner and later they cancelled the distributorship of its computer. The respondent bank deposited the cheque bearing No. 334717 dt. 23-10-1998 for clearance issued by Someswar Rao the dealer of the petitioner drawn in favour of the petitioner and the cheque was returned unpaid stating the reason as insufficient funds. The respondent bank immediately informed the peti-tioner regarding the dishonour of the cheque. It is represented by the petitioner to the bank about the cancellation of orders placed by its dealer Someswar Rao and by that time the bank has paid the discounted amount to Sanchayani Leo Computers, Madras and he has sought time for settling the transaction. The petiti-oner requested the bank to clear the amounts towards the discounted che-que as securities of the petitioner worth of nearly Rs. 92 lakh are lying with the bank. Thereupon the first respondent bank issued notice on 12-3-1999 calling upon the petitioner to pay the cheque amount imme-diately. A detailed reply was given on 10-4-1999 and the petitioner has subsequently paid an amount of Rs. 50,000/- on 20-7-1999 and another sum of Rs. 50,000/- on 29-9-1999 towards the discounted cheque. The bank has filed criminal complaint in C.C 333 of 1999 before the V. Metro-politan Magistrate, Hyderabad invo-king the provisions of Section 138 of Negotiable Instruments Act. Aggrieved by the same, the petitioner has pre-sented this criminal petition.
3. The learned counsel for the petitioner contends that the bank has no right to present
