The filing of an insolvency petition and its pendency does not disentitle the complainant from seeking penal action under Section 138 of the Negotiable Instruments Act for an offence already committed by the accused.

Thangaraj, the accused, the petitioner herein has filed this petition under Sec.482, Crl.P.C. seeking to call for the records in C.C.No.244 of 1998 on the file of Judicial Magistrate, Walajapet, Vellore District and quash the proceedings.

2. Mr. Jothi, the learned counsel for the petitioner, would at length argue by citing several judgments that the proceedings initiated against the petitioner under Sec.138 of the Negotiable Instruments Act have to be quashed mainly on the ground that the petitioner filed insolvency petition in I.P.No.7 of 1998 on the file of Subordinate Judge, Ranipet, Vellore District, in which notice to the creditors including the complainant, the respondent herein, was issued and that therefore, once the petition for insolvency is filed under the Provincial Insolvency Act and once the enforcibility of the debt has been covered for the relief in the insolvency proceedings with a prayer for adjudication in the insolvency proceedings, the complainant, the respondent herein cannot have any independent cause of action outside the scope of Insolvency Act, so as to seek the relief in the criminal court under Sec.138 of the Negotiable Instruments Act and as such, the said proceedings are liable to be quashed.

3. In elaboration of the above ground, Mr.Jothi, the learned counsel appearing for the petitioner by pointing out the relevant provisions of the Negotiable Instruments Act, would make the detailed submissions which could be summarised as follows:

“(a) Sec.138 of the Negotiable Instruments Act provides that where cheque was issued by the drawer for the discharge of any debt or other liability and the said cheque, when presented, is returned by the Bank unpaid, such drawer shall deem to have committed an offence. However, the Provisos (a), (b) and (c) of Sec. 138 of the Act would make it clear that the said section would apply only when three conditions were complied with,

(i) The cheque shall be presented to the bank. within a period of six months;

(ii) After dishonour, a statutory demand shall be made within 15 days; and

(iii) The drawer failed to make the payment within 15 days from the date of receipt of the said notice of demand.

(b) The explanation appended to the section would indicate the debt or liability mentioned in Sec.138 of the Act shall be a legally enforceable debt or other liability. By adding this Explanation to the section, it is clear that issuance of cheque for the discharge of a mere debt or liability, which is not a legally enforceable debt or liability, would not attract the penal Sec.138 of the Negotiable Instruments Act. In other words, if the ingredients, namely, the legally enforceable debt is absent, then there could be no prosecution under the Act. Therefore, the prosecution ought to establish that the cheque was issued towards the discharge of the debt, which is enforceable and that too, legally enforceable, Unless these parameters are satisfied, the complaint shall not be entertained by the criminal court.

(c) Though the word ‘legally’ ‘enforceable debt’ is not mentioned in the main section, it would be clear that a debt or liability shall be legally enforceable, when it is read along with the Explanation.

(d) The Apex Court, in Sundaram Pillai v. Pattabiraman Sundaram Pillai v. Pattabiraman, [1985] 1 S.C.C. 591 while interpreting the word explanation as contained in Sec. 10(2) of the Tamil Nadu Buildings (Lease and Rent Control) Act, would hold that the object of an Explanation to a statutory provision is to explain the meaning and intendment of the Act itself, to clarify the same so as to make it consistent with the dominant object which it seems to sub serve, to provide additional support to the dominant object of the Act in order to make it meaningful and purposeful and to advance the object of the Act in can help or assist the court in interpreting the true purport and intendment of the Act.

(e) Though the Explanation does not widen the scope of the main clause, the real meaning