IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
VIRENDER SINGH, J.
Abhishek Rao – Petitioner
Versus
State of H.P. and Another – Respondents
Cr. MMO No. 66 of 2023
Decided On : 27-12-2023
NI Act - Cheque Bounce - Section 138 - Summary of Acts and Sections: The court discussed the provisions of Section 138 of the Negotiable Instruments Act and the instructions issued by the Reserve Bank of India regarding the acceptance of non-CTS cheques. The court highlighted the relevant clauses of the RBI letter and circulars to determine the validity of the cheque in question and its acceptance by the bank.
Fact of the Case:
The petitioner sought to quash a complaint under Section 138 of the NI Act regarding a post-dated cheque that was dishonored due to insufficient funds. The accused claimed that the cheque was stolen and that non-CTS cheques were not acceptable after a certain date.
Finding of the Court:
The court found that the accused's grounds for quashing the complaint were not substantiated. It noted that there was no evidence of the alleged theft of the cheque and that the acceptance of non-CTS cheques was not completely discontinued as per the circulars issued by the Reserve Bank of India and the Punjab National Bank.
Issues: The issues revolved around the validity of the cheque, the acceptance of non-CTS cheques, and the accused's claims of theft.
Ratio Decidendi: The court emphasized the lack of evidence supporting the accused's claims and relied on the circulars and instructions issued by the Reserve Bank of India and the Punjab National Bank to determine the validity of the cheque and its acceptance.
Final Decision: The petition was dismissed, and the accused was directed to appear before the trial court.
JUDGMENT :
VIRENDER SINGH, J.
1. Petitioner-Abhishek Rao has filed the present petition, under Section 482 of the Code of Criminal Procedure (hereinafter referred to as ‘CrPC’) with a prayer to quash complaint No. 321-3 of 2015, dated 17th December, 2015, as well as, the proceedings resultant thereto, which are stated to be pending before the Court of learned Additional Chief Judicial Magistrate, Nalagarh, District Solan, H.P. (hereinafter referred to as ‘the trial Court’).
2. For the sake of convenience, the parties to the present lis are, hereinafter, referred to, in the same manner, as, they were referred to by the learned trial Court.
3. Brief facts, leading to the filing of the present petition, before this Court, may be summed up, as under:
3.1. Complainant-Rakesh Kumar has filed the complaint, under Section 138 of the Negotiable Instruments Act (hereinafter referred to as ‘NI Act’), against accused-Abhishek Rao, qua cheque No. 491938, dated 31st August, 2015. The said cheque is stated to be post-dated cheque. The said cheque, when presented for encashment, was returned back with the observation that the person, who has issued the cheque, was not having sufficient funds, in his account. Thereafter, the complainant had issued statutory notice and after waiting for the statutory period, the complaint has been filed, against the accused.
3.2. The learned trial Court found a case for commission of offence, punishable under Section 138 of the NI Act, against the accused and as such, summoning order was passed on 21st March, 2016. After securing the presence of the accused, the learned trial Court found a prima facie case, punishable under Section 138 of the NI Act, against the accused, as such, notice of accusation was put to him on 20th June 2019.
3.3. When, notice of accusation was put to the accused, he has not pleaded guilty and claimed trial. Consequently, the complainant was directed to adduce the evidence.
3.4. The evidence of the complainant was closed on 6th April, 2022 and the matter was adjourned for 17th May, 2022. On that date, the accused did not appear and application for exemption was considered and allowed. The matter was, thereafter, adjourned for 14th June, 2022. The accused again did not appear on 14th June, 2022, and moved the exemption application, which was allowed for that day and the matter was adjourned for 28th July, 2022.
3.5. On 28th July, 2022, neither the accused appeared before the Court, nor, any application for exemption was moved, on his behalf. As such, his presence was secured by issuing non-bailable warrants. The said non-bailable warrants remained un-executed till the time, the record was requisitioned, by this Court, in the instant petition.
4. By way of the present petition, which has been filed before this Court, on 14th November, 2022, the petitioner, has sought the following reliefs:
“(i) That the Complaint No. 321-3 of 2015 dated 17.12.2015 as well as proceedings thereto pending before the Learned Additional Chief Judicial Magistrate Nalagarh, District Solan, H.P. may kindly be quashed.
(ii) Entire record pertaining to the present case, may please be summoned for the kind perusal of this Hon’ble Court.
(iii) Any other order which this Hon’ble Court may deem fit, just and proper in the facts and circumstances of the present case, may be passed, in the interest of law and justice.”
5. The relief has been sought mainly on the ground that the cheque in question is non-CTS cheque and as per the instructions, dated 18th March, 2013, issued by the Reserve Bank of India, the old cheques, i.e. non-CTS cheques, are not acceptable in any of the nationalized Banks and only CTS cheques are acceptable, after 18th March, 2013. In this regard, he has relied upon the instructions, issued by the Himachal Pradesh State Cooperative Bank Ltd., Head Office, The Mall, Shimla-171 001, as well as, the circular of the Reserve Bank of India, dated 18th March, 2013.
6. It is the case of the accused (petitioner) that the com
AI
Non-CTS cheques remain valid as negotiable instruments and can be the basis for a complaint under Section 138 of the NI Act.
A cheque returned with the endorsement 'Refer to Drawer' due to it being non-CTS does not attract the offence under Section 138 of the Negotiable Instruments Act if it was not issued for a legally en....
An invalid cheque, due to bank merger, does not attract liability under Section 138 of the Negotiable Instruments Act; courts can quash proceedings lacking legal enforceability.
Quashing of FIR is an exception rather than an ordinary rule, and the High Court should exercise the powers under Section 482 Cr.P.C sparingly with circumspection.
Dishonour of cheque – Consequences of scuttling criminal process at a pre-trial stage can be grave and irreparable.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.