The central legal point established in the judgment is the requirement of evidence to support allegations of misrepresentation and dishonest intention in determining offences under Sec. 406 and Sec. 420 of the Indian Penal Code.

1. Heard learned counsel for the petitioners, learned counsel appearing on behalf of the opposite parties and also learned counsel for the State.

2. Both the cases are being heard together and are being disposed of by a common order with the consent of the parties as they relate to the same transaction.

3. The petitioners have challenged the orders taking cognizance passed on 24.12.2002 and 28.10.2003 for offences under sections 138 of the Negotiable Instruments Act and also under sections 406 and 420 of the Indian Penal Code passed by the Chief Judicial Magistrate, Munger, in Case no. 864(C) of 2002 and Case no. 188(C) of 2003.

4. The complainant Shyam Bahadur Singh is dealing in film distribution and financing business at Munger and he had connections with film business at Mumbai. The petitioners, who are accused in this case, are engaged in production of Hindi films. It has been specifically stated that the petitioners have produced a Hindi film titled "Pardeshi Babu" starring Govinda, Ravina Tandon and others. It is alleged that the petitioners were in need of finance and had approached the complainant who is in the, financing business, to lend an advance of a sum of Rs. 40 lacs for the production of the said picture. It is said that the complainant paid Rs. 40 lacs to petitioners no. 2 who is the proprietor of M/s K.B. Picture as per agreement dated 18.11.1996. Later on, a dispute arose between the complainant and the accused persons and the matter went up to the Bombay High Court in ordinary civil jurisdiction and Rs. 16,50,000.00 was paid by petitioner no. 2 to the opposite party no. 2 at the time of release of the film "Pardeshi Babu".

5. It has been stated in the complaint petition that the dispute had been settled outside the court and a consent term was filed in the Bombay High Court being suit no. 5112 of 1998 on 29.8.2001. The complainant further alleges that petitioner no. 2 had agreed to pay a sum of Rs. 23,50,000.00 with discounting commission of 8% p.a. or the said sum till 29.7.2002 one month before the delivery release of the picture "Vidroh". The complainant at paragraph-5 has stated that he had approached the accused no. 2 to make payment after expiry of the due date under the agreement. However, no payment was made and hence the complaint was filed.

6. It would be relevant to quote paragraphs of the complaint petition :-

"That in discharge of the aforesaid liability the accused no. 2 had issued one post dated cheque bearing no. 068261 dated 7.8.2002 of account no. 1094 drawn on Indian Overseas Bank, Juhu, Bombay-400049 for a sum of Rs. 7,00,000.00 only."

7. When this cheque was presented to Manager of the aforesaid bank, it was dishonoured and a notice was sent to the petitioner no. 2 as required under the Negotiable Instruments Act and despite notice, the petitioner no. 2 did not make the payment within 15 days of receiving the said notice.

8. The allegation at paragraph-10 is that the dishonoured cheque was intentional and malafide. The accused no. 2 is fully aware of the fact that they did not have sufficient amount in his account, and thus he has committed offences under Sec.138 of the Negotiable Instruments Act as well as offences under Sections 406 and 420 of the Indian Penal Code.

9. At the outset, it may be stated that Mr. Amit Shrivastava, learned counsel for the petitioners, has submitted that he is not challenging that part of the order by which cognizance of offence has been taken under Sec.138 of the Negotiable Instruments Act rather his submissions are restricted to the cognizance taken under Sections 406 and 420 of the Indian Penal Code.

10. Long and elaborate arguments have been made by the learned counsel for the petitioners and learned counsel appearing on behalf of the opposite parties and my attention has been drawn to various documents which include the agreement dated 29.8.2001, the consent term at Annexure-5 to the counter-affidavit, the order passed by the Bombay High Court