S. THANGARAJ, J.

The petitioners who are accused Nos. 1 to 10 (in Crl. O. P. No. 2983 of 1998) and 1 to 11 (in Crl. O. P. No. 2984 of 1998) have filed these petitions under section 482 of the Criminal Procedure Code, 1973, to quash the proceedings in C. C. No. 7080 and 7081 of 1997, respectively, on the file of the 18th Metropolitan Magistrate, Saidapet, Chennai.

The first petitioner represented by the second petitioner had availed of a grant of an intercorporate deposit on short-term basis to the tune of Rs. 2 crores on March 3, 1997, and the first petitioner executed two promissory notes dated March 3, 1997, each for Rs. 1 crore undertaking to repay the said sum with interest at the rate of 20 per cent. per annum within 60 days, i.e., by May 2, 1997. The first accused also issued cheques dated May 2, 1997, for the said sum. As the amount was not paid in time, the first petitioner requested for extension of time and issued cheques bearing Nos. 138822 and 138934 dated July 31, 1997, for the said sum. The second petitioner executed a personal guarantee and security of shares worth Rs. 2 crores. On the basis of those documents, the respondent extended the period of loans till July 31, 1997. On July 24, 1997, the first accused sent a letter requesting the complainant not to present the cheques on July 31, 1997, despite which the cheques had been presented by the complainant on July 31, 1997, in the Bank of Baroda, Alwarpet, Chennai, and the cheques were returned on August 1, 1997, with the endorsement "payment stopped by drawer". The complainant issued a notice dated August 5, 1997, and the same has been returned unserved with the endorsement "refused" on August 12, 1997. Thereafter the complainant has preferred these complaints under section 138 of the Negotiable Instruments Act, which were taken in C. C. Nos. 7080 and 7081 of 1997 by the learned 18th Metropolitan Magistrate, Saidapet, Chennai.The petitioners have raised five grounds for quashing the said proceedings.

The respondent/complainant has filed counter refuting those grounds.

The major grounds of challenge are :

(i) By letter dated July 24, 1997, the petitioners requested the respondent not to present the cheques on July 31, 1997, and they had given instruction to the bank to "stop payment" and in spite of it when the complainant presented the cheques for collection, it was returned with the endorsement "payment stopped by drawer" and, therefore, the petitioners are not liable under section 138 of the Negotiable Instruments Act.

(ii) There are no sufficient allegations in respect of the petitioners Nos. 2 to 10 and 2 to 11 made in the complaints except that they are directors of the first petitioner-company responsible for the day-to-day management of the affairs of the company and no specific allegation has been raised against them.

(iii) The complaints were filed by one K. G. Sampath, manager-finance, of the complainant-company on July 24, 1997, and the said person has no authorisation from the complainant-company to sign or file the criminal complaint for and on behalf of the said company.

(iv) The cheques were given only as security towards the loan amount and the accused had also given security of shares worth Rs. 2 crores to the complainant-company, that the complainant/respondent has encashed cheques for Rs. 2, 67, 396 and Rs. 3, 87, 124 respectively towards the interest on the said loan amounts for the period August 1, 1997, to September 30, 1997, and they extended the period of loan by three months from July 30, 1997.

(v) Petitioners Nos. 2 to 10 and 2 to 11 in Crl. O. P. Nos. 2983 and 2984 of 1998 respectively, have their office in Worli, Mumbai, whereas the notices were sought to be served in their address at Jaipur, and returned as "refused" which cannot amount to constructive service of notice and the same vitiates the proceedings.In support of the first contention that in spite of the petitioners notice not to present the cheque for encashment,