JUDGMENT :

Sanjay Dhar, J.-Petitioner has challenged the complaint filed by the respondent against him for offence under Section 138 of Negotiable Instruments Act (hereinafter for short “the NI Act”) pending before the Court of Judicial Magistrate, 1st Class (1st Additional Munsiff), Srinagar. Petitioner has also challenged order dated 26.07.2019, whereby the learned Magistrate has, after taking cognizance of the offence, issued process against the petitioner.

2. It appears from the record that respondent has filed a complaint against the petitioner alleging that a cheque bearing No.406696 dated 01.03.2019 for an amount of Rs.5.00 lacs, issued by petitioner in his favour which was drawn on J&K Bank Branch unit Habbak Crossing, Srinagar, was returned unpaid by the concerned bank with the remarks “funds insufficient and drawer’s signature differs”. The respondent is stated to have served a legal notice of demand upon the petitioner and when the petitioner failed to make the payment within the statutory period, 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 offence and issued process against the petitioner in terms of its order dated 26.07.2019. The complaint and the order issuing process against the petitioner is under challenge before this Court.

3. The petitioner has urged two grounds, one that the complaint and the order of issuing process are not legally tenable as the dishonour of cheque was due to difference in drawer’s signatures and, as such, offence under Section 138 of NI Act is not made out against the petitioner. The other ground that has been urged by the petitioner is that the cheque in question was given by the petitioner to the respondent as a security pursuant to a memorandum of understanding executed by the parties on 30th November, 2017, and not in discharge of any legally outstanding amount or in discharge of any debt.

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

5. The first question that falls for determination in the instant petition is as to whether dishonor of a cheque for the reason that there was difference of 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 drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course