The dishonouring of cheques for an existing liability amounts to breach of promise, a civil liability, and does not constitute a criminal offence under Section 406 or Section 420 of the Indian Penal Code.

Pritpal Singh, J. - Two connected petitions under Section 482 of the Code of Criminal Procedure (CrI. Misc. No. 4315-M of 1985 and Crl. Misc. No. 6411-M of 1985) are being disposed of by this order. In the first petition a complaint dated April 20, 1985 (Annexure P.3) filed by Chaman Lal respondent under Sections 406, 415, 420 and 506 of the Indian Penal Code against the petitioner in the Court of Sub-Divisional Judicial Magistrate, Panipat, is sought to be quashed. In the second petition a First Information Report No. 138 dated January 27, 1985, recorded at the Police Station at the instance of the same respondent under Section 406 and 420, Indian Penal Code, against the petitioner on the same facts is also sought to be set aside.

2. In the impugned complaint and the First Information Report it is alleged by the respondent Chaman Lal that he is manufacturing carpet wollen yarn in the Industrial Area, Panipat. He supplied the yarn to the petitioner on various occasions between 27th of December 1980 and 23rd May, 1991. After the delivery of these goods on seven occasions the respondent demanded payment of the price thereof. The petitioner thereupon issued eight cheques of different dates in his favour. These cheques, on presentation to the Bank, were dishonoured. On these allegations it has been alleged that the petitioner has defrauded the respondent. and has committed breach of trust.

3. At the very outset it may be mentioned that this Court held in Iqbal Singh Randhawa v. Doctor Satpaul Goyal, 1977 C.L.R. (Pb. & Har.) 134, that an offence under section 406, Indian Penal Code, is, an antithesis of offence under section 420, Indian Penal Code. In a case of criminal misappropriation the property is voluntarily kept in the custody of an accused whereas in a case of cheating the accused, by adopting deceitful means, induces the complainant to part with the property. Thus, an accused cannot, be tried for these two offence simultaneously. Either he his committed an offense under Section 406, Indian Penal Code or under Section 420, Indian Penal Code.

4. I held in my earlier judgment in Chhote Lal Aggarwal v. The State of Punjab, 1987 (1) C.L.R. 48, that unless the delivery of the goods bad been made against a cheque then due to the dishonouring of the same, which was issued for an already existing liability, no criminal offence is made out. A distinction has to be drawn between a case where a cheque is issued in order to discharge an existing liability and a case where it is issued against delivery of goods with an assurance that it will be encashed when presented to the Bank. In the first case it would amount only to a breach of promise if the cheque is not encashed but in the second case it may be prima facie evidence of an intention to cheat.

5. In the present case the respondent Chaman Lal has alleged that he had supplied goods to the petitioner on various occasions and only thereafter the price thereof was demanded by him and to discharge this existing liability the petitioner had issued a number of cheques in respondents favour which were dishonoured on presentation to the Bank. Clearly, therefore, the cheques were not issued against delivery of goods but were drawn in order to discharge a preexisting liability. I am, therefore, of view that the dishonouring of the cheques amounted to breach of promise which is a civil liability and no criminal offence is made out either under Section 406 or under Section 420 Indian Penal Code.

In this view of the matter the impugned complaint as well as the First Information Report and the proceedings taken in pursuance thereof in the Court of Sub - Divisional Judicial Magistrate, Panipat are hereby quashed.