JUDGMENT :

Prayer: Criminal Original Petition filed under Section 482 of Criminal Procedure Code, to call for the records and quash the proceedings on the file of V Judicial Magistrate, Salem bearing C.C.No.18 of 2014 as against the petitioners for an offence under section 138 of Negotiable Instruments Act, 1981.

1. This petition has been filed to quash the proceedings initiated under section 138 of the Negotiable Instruments Act in C.C.No.18 of 2014 on the file of the V Judicial Magistrate Court, Salem.

2. The crux of the complaint is that the respondent had extended financial facility in the form of short term loan to the petitioner company for the development of business. The accused have borrowed a sum of Rs.10 crores out of the sanctioned limit of Rs.15 crores as a short term loan and also executed necessary documents for the above said loan as per the terms and conditions of the banking rules and regulations. The accused had also issued a cheque bearing No.72625 dated 02.04.2013 for a sum of Rs.2,90,81,000/-, drawn on ICICI Bank, Shevapet Branch, Salem towards part payment of the said loan amount. When the above cheque was presented for encashment on 03.04.2013, the same was dishonoured for ‘funds insufficient’ on 04.04.2013. Thereafter, the complainant issued statutory notice, which was received by the accused 1 and 2 on 06.04.2013. But no reply was sent. Hence the complaint. The learned Judicial Magistrate took cognizance of the above complaint. The same is sought to be quashed by the petitioners mainly on the ground that at the time of availing financial assistance from the respondent by the petitioners, the second petitioner has handed over undated cheques while sanctioning and disbursing the loan as demanded by the bank. One such cheque was used for the purpose of loan processing charges and the remaining cheque was used to initiate the proceedings. It is also stated that in April 2013, the account of the firm became non performing asset which lead to issuance of notice under section 13 [2] of the SARFAESI. As a short circuiting procedure, without even intimating the firm or its partners, the respondent/ complainant filled up the cheque in question, which has been given to the borrower at the time of loan processing fee and initiated the prosecution. Possession notice issued under SARFAESI Act has also been challenged before DRT. A stay was granted subject to the payment of Rs.25 lakhs and the same was also complied.

3. It is further stated that the petitioners periodically paid the dues and the liability has been gradually reduced. Hence, it is his contention that there is no legally enforcible debt subsisting on the date of presentation of the cheque. The present cheque in question is undated cheque which was obtained while sanctioning the loan. The complaint is also silent as to who has issued the cheque on 02.04.2013. It is his contention that the cheque issued in the year 2011 has been used for filing the present case.

4. In addition to the grounds raised in the petition, it is the main contention of the learned Senior Counsel appearing for the petitioner that even the loan sanctioning letter vouch the fact that undated cheques have been collected by the bank. Therefore, the very allegation in the complaint that the cheque was issued on 21.04.2013 for a sum of Rs.2,90,81,000/- is an after thought and the same has been pressed into service only for maintaining the complaint. Hence, it is contended that the cheque in question has been issued as a security and the same cannot be enforced in the eye of law for prosecution under section 138 of the Negotiable Instruments Act. It is further contended that towards the loan amount, before the complaint, a sum of Rs.15,52,14,902/- was paid and thereafter Rs.79 lakhs has been paid in pursuant to the Order of this Court and totally Rs.16,31,14,902/- has already been paid and the amount payable is only Rs.21,31,490/-. Whereas, cheque has been filled for a huge sum of Rs.2,90,81,