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2006(1) Bankmann 85
ANDHRA PRADESH HIGH COURT
T. Ch. Surya Rao, J.
Chairman, Jawahar Co-operative Urban Bank Ltd. And Others — Petitioners
versus
Ramanjaneya Enterprises, Hyd.
And Another — Respondents
Crl. P. Nos. 6048, 6049 and 6050 of 2003
Decided on 1.10.2004
IMPORTANT POINT
Where cheque was returned unpaid or with endorsement that drawer accused co-operative urban bank Ltd was not a “clearing member” with collecting bank, prosecution u/s 138 Negotiable Instrument Act was not maintainable.
Headnote:Negotiable Instruments Act, 1881—Section 72 and 138—Banker cheques issued by accused Co-operative urban bank Ltd and cheques were returned unpaid—Prosecution of bank, its chairman, vice chairman and some of Directors—Quashing petition—Cheque were returned as accused cooperative urban bank Ltd was not a clearing member with collecting bank—Question whether offence under Section 138 of the Act was attracted ? No.
Held: In the instant case, because of the fact that the Jawahar Co-operative Urban bank Limited is not a clearing member of Reserve bank of India, the latter bank returned the cheques, it cannot, therefore, be held that the cheques have been returned for want of insufficiency of the funds or for exceeding the arrangements made or for any other reason. Obviously the cheques in question were not presented at the bank on which they had been drawn earlier. When there has been no valid presentation of the cheques in accordance with the provisions contained in Section 72 of the negotiable Instruments Act with “the Bank” on which they have been drawn the drawer of those cheques, namely, the petitioners herein cannot be held criminally liable. For the foregoing reasons, the complaint cases must fail. (Para 13)
Result: Petition allowed.
Ch. Surya Rao, J. —Inasmuch as common questions of fact and law are involved and as the parties well neigh are the same, these three criminal petitions can be disposed of together.
2. Three complaints were filed against the Chairman, Vice-Chairman and some of the Directors of the Jawahar Co-operative Urban Bank Limited under Section 138 of the Negotiable Instruments Act by M/s. Ramanjaneya Enterprises in C.C. .No.74 of 2002, M/s. Sri Venkateswara Finance in C.C. No. 75 of 2002, and Mrs. K. Rukmini in C.C. No.76 of 2002, on the file of the XV Metropolitan Magistrate, Hyderabad.
3. Several gullible villagers invested their hard earned monies under various fixed deposit receipts with the jawahar Co-Operative Urban Bank, Limited, Dilsukhnagar, Rangareddy district, the accused. All of them instructed the Bank to remit the accrued monthly interest to M/s. Ramanjaneya Enterprises, the complainant in C.C. No.74 of 2002. In discharge of that liability, it is said that the accused-Bank issued four banker cheques each for Rs.50,606/- dated 5-1-2001, 5-2-2001, 5-3-2001 and 5- 4-2001. The Managing Partner of the complainant presented three out of four banker cheques with his banker, State Bank of India, Bazarghat Branch; Hyderabad on 5-4-2001. They were returned with the endorsement “present again on 9-4-2001”. The Manager of the accused-Bank also wrote a letter to the complainant requesting him inter alia to present the cheques later on 9-4-2001. The complainant presented all the four banker cheques on 7-5-2001 in State Bank of India, Bazarghat Branch, Hyderabad again. However, all the four cheques were returned with the endorsement “not clearing member”. He, therefore, got a legal notice dated 11-5-2001 issued to the Chairman, Vice-Chairman and Directors of the accused-Bank Demanding payment of the amounts covered by those cheques to the tune of Rs. 2,02,424/- within 15 days from the date of receipt of the said notices. All of them, having received the said notices under various acknowledgments, even after lapse of 15 days therefrom, failed to pay the amounts covered by the four banker cheques. They did not even give any reply to the legal notices got issued by the complainant.
4. The Managing Director of M/s. Sri Venkateswara Finance, the complainant in C.C. No.75 of 2002, invested an amount of Rs. 5,00,000/- under a fixed deposit receipt dated 23-6-2000 with the Jawahar Co-operative Urban Bank Limited and the amount carries an interest at the rate of 18% per annum. Towards the payment of the interest accrued thereon the accused-Bank issued a banker cheque bearing No.006255, dated 5-4-2001. When the complainant presented the said cheque with the State bank of India, Bazarghat Branch, Hyderabad on 7-5-2001, the Bank returned it with the endorsement to the effect “not a clearing member.” Therefore, a legal notice dated 11-5-2001 was got issued by the complainant to all the accused-bank demanding them to repay the amount of Rs. 7,500/- covered by the banker cheque within 15 days from the date of receipt of the said notice, having received the notices under various acknowledgement, all of them failed to pay the amount nor did they get any reply issued to the legal notices issued by the complainant.
5. One Mrs. K. Rukmini, wife of the Managing Partner of M/s. Sri Venkateswara Finance obtained seven banker cheques for a total sum of Rs. 2,80,000/- at the rate of Rs. 40,000/- each from the accused -Bank in her name for the purpose of furnishing them as security in a business deal with a third party. But, the purpose was not served and as there was no occasion to utilize the said cheques, she approached the accused-Bank and requested them to cancel the said cheques and pay back her amount. After having postponed the payment for sometime, finally the Bank asked her to present the banker cheques in her account. Accordingly, the complainant presented the said seven cheques in her bank account with State Bank of India, Bazarghat Branc
