The absence of a legally enforceable debt or liability at the time of cheque issuance negates the offence under Section 138 of the Negotiable Instrument Act.

By the Court.-Heard the learned counsel for the petitioner and learned counsel for the State. No one appears on behalf of the complainant opposite party No.2 in spite of repeated calls, though the name of learned counsel is appearing in the list. Even on 25.6.2014 no one had appeared for the complainant opposite party No.2, in spite of repeated calls and in order to give a chance to the learned counsel for the opposite party No.2, the case was adjourned for today. As stated above, today also no one appears on behalf of the complainant.

2. The petitioner is aggrieved by the order dated 21.6.2001 passed by Sri K. Kumar, learned Judicial Magistrate, 1st Class, Hazaribag, in Complaint Case No. 444 of 2001/T.R. No. 154 of 2001 whereby on the basis of the statement made in the complaint, and the statement of the complainant on solemn affirmation, the prima-facie offence under Section 138 of the Negotiable Instrument Act (hereinafter referred to as the ‘Act’) has been found against the petitioner and summon was ordered to be issued against him for facing the trial.

3. By order dated 11.4.2002 this application was admitted and further proceeding against the petitioner was stayed. Upon notice the complainant opposite party No. 2 appeared and filed counter affidavit.

4. The complainant opposite party No. 2 filed the complaint case before the Chief Judicial Magistrate, Hazaribag, which was registered as Complaint Case No. 444 of 2001. From the perusal of the complaint petition it appears that there was an agreement for sale of land between the parties" for a consideration of Rs. 30.90 lacs. It is stated in the complaint petition that a sum of Rs. 2 lacs was paid as earnest money in accordance with the agreement executed at the complainant's residence at Hazaribag, vide crossed A/c payee cheque No. MSHL/141/863540 dated 29.3.2001 on A/c No. 01190005362 of the State Bank of India, Hanuman Nagar, Patna. The complainant presented the said cheque on 30.3.2001 in his account in the State Bank of India, but he was informed in writing on 24.4.2001 by his Banker that the payment of the said cheque amount had been stopped by the drawer, i.e., the petitioner. Thereafter after giving notice to the petitioner, which as stated, remained un-replied, the complaint petition was filed within the statutory period. The statement of the complainant was recorded on solemn affirmation in which he supported his case, on the basis of which, the prima-facie offence has been found against the petitioner by the impugned order dated 21.6.2001 passed by the Court below which has been challenged in the present application.

5. Learned counsel for the petitioner has submitted that the impugned order passed by the Court below is absolutely illegal in as much as, the payment was stopped by the petitioner and in that view of the matter the offence under Section 138 of the Act shall not be attracted in the case, as according to that section, the offence is made out only when there is insufficient amount in the account to honour the cheque, or cheque amount exceeds the amount arranged to be paid from that account by an agreement made between that bank and the account holder. Learned counsel accordingly, submitted that since this matter relates to stopping the payment by the petitioner, Section 138 of the Negotiable Instrument Act shall not be attracted in the case. It is further submitted by learned counsel for the petitioner that in any event, according to the complaint petition itself, the cheque was issued as an earnest money, but the deal did not finalise between the parties and accordingly, there was no legally enforceable debt or other liability between the complainant and the petitioner and on this count also no offence under Section 138 of the Act is made out against the petitioner.

6. According to the petitioner's case there was an agreement between the parties on 29th March, 2001 for the sale of the land in question which is situated at Patna. The complainant reach