Point of Law: Dishonour of cheque for the aforesaid reason would not constitute an offence under Section 138 of the NI Act and, accordingly, the criminal proceedings against the accused were quashed accused in such cases should be allowed to proceed and the judgment and orders passed by the High Court quashing the criminal proceedings were set aside.

JUDGMENT :

1) Petitioners have challenged the complaint filed by respondent against them for offence under Section 138 of Negotiable Instruments Act (hereinafter for short “the NI Act”) read with Section 420 IPC pending before the Court of Chief Judicial Magistrate, Anantnag. They have also challenged the order dated 27.08.2020, whereby the learned Magistrate has, after taking cognizance of the offences, issued process against the petitioners.

2) It appears from the record of the case that respondent has filed a complaint against the petitioners alleging that cheques bearing No.612444 dated 09.07.2020 for an amount of Rs.15.00 lacs, No.612445 dated 09.07.2020 for an amount of Rs.10.00 lacs and No.612446 dated 09.07.2020 for an amount of Rs.10.00 lacs drawn on J&K Bank Branch Khanabal in favour of respondent/complainant, when presented to the banker, were returned unpaid with the remarks “drawers signature incomplete”. According to respondent/complainant, the petitioners knowing fully-well that the cheques were to be signed by both the petitioners, who happen to be the partners of the firm that has issued the cheques in question, deliberately and intentionally in order to cheat and defraud the respondent, endorsed signature of only one of the partners on the cheques, as a result of which the same were dishonoured by the banker. The respondent/complainant served a legal notice upon the petitioners through registered post and when the petitioners failed to liquidate the cheque amount, the complaint, which is subject matter of this petition, came to be filed before the trial Magistrate. The learned Magistrate, after recording the preliminary evidence, took cognizance of the offences and issued process against the petitioners. The complaint and the order issuing process against the petitioners are under challenge before this Court.

3) The primary ground that has been urged by the petitioners is that the complaint and the order of issuing process is not legally tenable as the dishonor of cheque due to mismatch of signatures or incomplete signatures does not constitute an offence under Section 138 of the NI Act. Petitioners have relied upon judgment of the Supreme Court in the case of Vinod Tanna. Vs. Zaheer Siddiqui, (2002) 7 SCC 541 to support their contention.

4) I have heard learned counsel for the parties and perused the material on record.

5) The only question which falls for determination in the instant petition is as to whether dishonor of a cheque for the reason that there were incomplete signatures appearing on the cheque, constitutes an offence under Section 138 of the NI Act. In order to determine this question, the provisions contained in Section 138 are required to be noticed. It reads as under:-

“138. Dishonour of cheque for insufficiency, etc., of funds in the account.-Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, 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, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years’, or with fine which may extend to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply unless-

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawe