The offense under Section 138 of the Negotiable Instruments Act, 1881, is limited to cases where a cheque is returned unpaid due to insufficient funds in the account and does not extend to cases where the cheque is dishonored for other reasons, such as stopped payments.

, J.

1. Tamilnadu Tubes and its managing partner, Shri Swaminathan, have come to this court in this petition under Sec.482 of the Criminal Procedure Code, 1975, for quashing of complaint dated May 11, 1990, annexure P-1.

2. The complainant, Parkash Tubes Limited, who is engaged in manufacturing of GI steel and black pipes and other items having its factory at Parkash Nagar, Bahadurgarh, had appointed Tamilnadu Tubes as the consignee agent. As per the terms of the agreement, the complainant was to send the goods to the petitioners on consignment basis which were to be sold in the State of Tamilnadu at the best prices and after deducting the expenses incurred by the accused for handling the goods, they were to remit the balance price to the complainant at its registered office at Bahadurgarh. The complainant sent goods worth Rs.3,72,170 to the petitioner in the month of February, 1990. The petitioners after deducting their commission on the sales sent four cheques amounting to Rs.3,28,137 as detailed* in para 6 of the complaint. All these cheques had been drawn on the Catholic Syrian Bank Limited, Madurai. The accused had also sent sale memos confirming the sale of the goods arid statements showing the deductions and the amounts payable to the complainant. They had also agreed ,to clear the amounts on or before February 28, 1990. The cheques were, thus, issued for discharging the debt payable by the petitioners to the complainant-company towards the sale price of the goods sold. Cheque No.466702 for Rs.50,000 and cheque No.466703 for Rs.50,000 were returned unpaid by the bankers along with the advice annexed as annexure-V with the complaint. On receipt of the above advice, the complainant served notices upon the petitioners to make the payment in lieu of the dishonoured cheques within 15 days. These notices were duly received and replied to by the petitioners. However, the amounts were not paid. That on the dates of issuance of the cheques and their presentation, there was no sufficient balance in the account of the petitioners to enable the bankers to honour the cheques. The petitioners had thus committed an offence punishable under Sec.138 of the Negotiable Instruments Act, 1881 .

3. Though the petitioners challenge their liability to make the payment as the debt was not due, they have also challenged the prosecution on the basis that no of fence under section, 138 of the Act had been committed.

4. Admittedly, the cheques in this case were dishonoured on the advice of the petitioners to stop the payment. Learned counsel for the respondents has urged that stopping of payment was a ruse played by the petitioners and in fact they had no balance available with them on the date the cheques were issued or presented and as such the offence will still be one falling under Sec.138 of the Act.

5. The Negotiable Instruments Act, 1881 , was amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988. Sec.138 reads as follows : "138. Dishonour of cheque for insufficiency, etc. , of funds in the account.--Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemeed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six mont