Magistrate competent to take cognizance of the complaint.

JANARTHANAM, J.

T. S. Arunachalam, J., while hearing the arguments in this petition under Section 482, Code of Criminal Procedure, to quash the proceedings in C.C. No. 489 of 1992 on the file of the XV Metropolitan Magistrate, George Town, Madras, raising the question as to whether the return by a Banker of a cheque unpaid bearing an endorsement 'account closed', will fall within the scope and ambit of the two contingencies, viz., 'insufficiency of the amount of money standing to the credit of the account of the person', or, it exceeded the amount arranged to be paid from that account of a person by an agreement with that Bank', giving rise to a cause of action for launching a prosecution by preference of a private complaint for an offence under Section 138 of the Negotiable Instruments Act, 1881 (Act 26 of 1881) for short "the Act"), came to notice divergent views emerging from two learned Judges of this Court, Pratap Singh, J. and Padmini Jesudurai, J.

2. (a) In Binary Systems (P) Ltd. v. Noble Power (P) Ltd., Madras (1992 Mad LW (Crl) 307), Pratap Singh, J. was concerned with a cheque, which was returned with an endorsement 'stop payment'. Though in the head note, it is stated that '"stop payment" will not fall within the section ...' it is seen that such a categoric finding has not been recorded by learned Judge. It appears from a portion of the order quoted below that learned Judge was of the opinion that the return of the cheque should be possible of being brought under either of the two heads mentioned in Section 138 of the Act. However, in that particular case, learned Judge was not inclined to quash the pending prosecution in exercise of powers under Section 482 of the Code of Criminal Procedure (for short 'the Code'), since the complaint contained allegations that there was insufficiency of funds, though the Bank return was on the ground of payment having been stopped. It will be better to extract the observations of learned Judge :-

"(4) The learned counsel further contended that the cheques returned with an endorsement 'stop payment' and it was not returned due to insufficiency of funds because it exceeds the amount arranged to be paid and hence offence under Section 138 of the Negotiable Instruments Act was not committed.

On the latter occasion, the cheque has been returned with the endorsement 'stop payment'. The complainant submit that the accused have acted diabolically. On both the occasions, when the cheque reached the accused's bank in Bangalore for collection sufficient funds were not available resulting in the dishonour of the cheque.

Those are the positive allegations in the complaint to the effect that only due to the insufficiency of funds the cheque was returned, but diabolically the accused had acted and the cheque was returned with the endorsement 'stop payment'. So it is to be seen only during the course of trial whether the cheque was returned unpaid due to the insufficiency of funds as alleged in para 4 of the complaint or otherwise and when there are positive allegations to the effect in the complaint that cheque was returned due to insufficiency of funds, those allegations cannot be ignored and the complaint quashed at the threshold. For, those allegations are true or not can be tested only during trial. That stage has not yet come."

(b) In R. Jayalakshmi v. Rashida, (1991 Mad LW (Crl) 602, Pratap Singh, J., while considering the argument that only in a case where the cheque was returned unpaid on the ground of insufficiency of funds or that it exceeded the amount arranged to be paid an offence under Section 138 of the Act should be held to have been made out and not when the endorsement was 'payment countermanded by the drawer'. The relevant portion of the observations of learned Judge is as under :

"A plain reading of Section 138 of the Act would clearly indicate that only in those two contingencies, viz., when the cheque was returned unpaid because of insufficiency of funds and/or