The main legal point established in the judgment is the necessity of an explicit allegation regarding the insufficiency of funds in the account of the drawer to honour the cheque in a complaint under section 138 of the Negotiable Instruments Act.

L. MANOHARAN, J.

This matter has come up before us as per order of reference by a learned single Judge (Thomas, J.).

2. This Cri.M.C. is by the accused in S.T. No. 305 of 1993 on the file of the Chief Judicial Magistrate, Thrissur to quash Annexure D complaint filed by the 2nd respondent under section 138 of the Negotiable Instruments Act, 1881 as amended by Act 66 of 1988 (for short 'the Act'). Petitioner alleges that the said complaint does not contain allegation regarding the ingredients constituting the offence punishable under section 138 of the Act. According to the petitioner Annexure D complaint since does not contain an allegation to the effect that the cheque issued by the petitioner was returned by the bank unpaid as the amount of money standing to the credit of the petitioner is insufficient to honour the cheque, the complaint cannot be entertained and no cognizance could have been taken on the basis of the said complaint. Petitioner issued a cheque for an amount of Rs. 30,750/- in favour of the second respondent; but by Annexure A letter petitioner informed the Manager, South Indian Bank Ltd., Eriyad Branch that the payment as per cheque has to be stopped for the reasons stated therein. When the cheque was presented, the same was returned with the endorsement "Payment stopped". According to the second respondent he issued a notice to the petitioner as required under Clause (b) of the proviso to Section 138 of the Act and since payment was not made in response to the said notice within the time stipulated, Annexure D complaint was filed.

3. According to the 2nd respondent the question as to the insufficiency of fund to the credit of the petitioner for honouring the cheque is a matter for evidence and not a matter for allegation as Section 138 of the Act does not insist that such an allegation is necessary.

4. When the matter came up before a learned single Judge, the petitioner relied on three decisions of this Court in support of his contention that such an allegation is necessary for entertaining a complaint under section 138 of the Act. The decisions relied on were Bhageerathy v. Beena, (1992) 2 Ker LT 31 : (1992 Cri LJ 3946) rendered by Pareed Pillay, J., Ashok v. Vasudevan Moosad, (1993) 1 Ker LT 671 : (1993 Cri LJ 2486) rendered by one of us (Manoharan, J.) and Iqbal v. Uthaman, (1993) 2 Ker LT 237 rendered by Thomas, J. But the second respondent in support of the aforesaid contention relied on the decision in Pappachan v. Joy, (1993) 1 Ker LT 13 by Sankaran Nair, J. The learned single Judge (Thomas, J.) in the order of reference stated : "The last mentioned decision is, no doubt, runs counter to the other three decisions on this aspect. I do not think it proper to follow the decisions rendered by single Judges in the other three decisions, thought that may form the majority apparently, since one learned single Judge had taken a contrary view. This apparent conflict must be resolved for which it is only proper that the question is referred to a bench.”

5. All dishonour of cheques are not made punishable under section 138 of the Act. Only the dishonour of the cheque on account of the circumstances mentioned in Section 138 of the Act alone is made punishable under the said Section, and the condition stipulated in Section 138 of the Act is, the cheque "is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank." Therefore, unless the said condition is satisfied, the offence under section 138 of the Act would not be made out.

6. In the matter of taking cognizance on receiving a complaint, Section 190(1)(a) of the Code of Criminal Procedure (for short 'the Code') enjoins that any Magistrate of the First Class and any Magistrate of the Second Class specifically empowered in this behalf under sub-section (2) of Secti