Section 138 of the Negotiable Instruments Act is not attracted if the cheque amount exceeds the debt due.

Malai Subramanian J. - The petitioners were accused in C.C. No. 430 of 2000 on the Judicial Magistrate No. I, Pollachi, who seek to quash the complaint pending against them for an offence under section 138 of the Negotiable Instruments Act, 1881. The first petitioner is the company represented by the chairman and other petitioners are the directors of the company.

2. According to the facts as averred in the complaint, the complaint-company was dealing in cotton. While so, the complaint supplied cotton to the accused-company and on March 25,2000, the accused-company issued a cheque for a sum of Rs. 4,68,581 towards the existing liability. Subsequently, on May 2, 2000, the complainant received a demand draft for a sum of Rs. 2,00,000 from the accused and as on May 2, 2000, the amount due to the complaint was only Rs. 2,68,581. Since that amount was not paid, the complaint presented the cheque on August 30, 2000, and the same was returned on August 31,2000, with an endorsement "garnishee order received". Therefore, the complaint issued a notice on September 13, 2000, demanding the repayment of a sum of Rs. 2,68,581 within 15 days and the notice were received by the directors, namely, petitioners Nos. 2, 3 and 6 on September 20, 2000, and the notice sent to the first accused was returned as left and so far as the said notices sent to petitioners Nos. 4 and 5 are concerned, they were returned on September 28, 2000. Since the remaining amount was not paid by the accused, the complaint came out with a complaint which is sought to be quashed by the accused.

3. The original cheque amount is for Rs. 4,68,581. Subsequently, the complaint has admitted that he received a demand draft of R». 2,00,000 towards part payment of the cheque amount. Therefore, as on May 2, 2000, the amount due to the complaint is only Rs. 2,68,581. Instead of presenting this cheque at a later stage, the complaint ought to have returned the original cheque and subsequently obtained a new cheque for a amount of Rs. 2,68,581. Instead of doing so, the original cheque dated March 25, 2000, for an amount of Rs. 4,68,381 was presented in the bank which was returned. The contention of learned counsel appearing for the respondent/ complaint is that the said cheque was retained by the complaint only-by way of security to the amount of Rs. 2,68,581. If this contention is accepted, the complaint cannot come with a complaint for an offence under section 138 of the Negotiable Instruments Act because any action taken against the drawer of the cheque which was kept by way of security will not lie.

4. Section 138 of the Negotiable Instruments Act reads that where any cheque was drawn for payment of any amount of money for the discharge in whole or any part of any debt or other liability and the same is dishonoured by the bank, the person who drew the the cheque shall be punishable. Therefore, the cheque drawn should be towards the discharge of either the whole debt or part of the debt. If the cheque is more than the amount of the debt due, I am afraid, section 138 cannot be attracted. This is a case where the cheque amount was more than the amount due on the date when the cheque was presented. The presentation of the cheque and subsequent dishonour alone raised a cause of action. When the cheque cannot be said to be drawn towards the discharge of either the whole or part of any debt or liability, section 138 is not attracted. On this sole ground, the complaint is liable to be quashed and is accordingly quashed. The petition is, therefore, allowed. Consequently, connected Crl. M.P. Nos. 9221 and 9222 of 2000 and Crl. M.P. No. 455 of 2001 are closed.

Petition allowed.