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2001 Supreme(Online)(AP) 13

ANDHRA PRADESH HIGH COURT
Bilal Nazki, J
M/s. OPTS Marketing Pvt. Ltd. – Appellant
Versus
Mr. Eashwar M. Sajanani – Respondent
Crl. P. No. 556 of 1999|C. No. 24 of 1999



Prosecution for cheque dishonour under IPC is valid even after Section 138 of the Negotiable Instruments Act; allegations must demonstrate dishonest intent causing harm.

Headnote:(A) Indian Penal Code, 1860 - Section 420 - Code of Criminal Procedure, 1973 - Section 482 - Complaint for dishonour of cheque - A single Judge is bound to follow the law set by a Division Bench unless overruled by a Full Bench or Supreme Court - Prosecution under Section 420 is maintainable even after introducing Section 138 of the Negotiable Instruments Act if allegations show dishonest intention at the time of issuance - Such prosecution cannot be quashed under Section 482, Cr. P.C. if the complaint demonstrates dishonesty causing damage. (Paras 1, 8, 29, 27)

Table of Content
1. allegations of dishonest inducement concerning a loan. (Para 1)
2. criteria for high court to quash fir in cheating cases. (Para 2 , 9)
3. procedural requirements for case referrals in high court. (Para 3 , 4 , 5 , 6 , 7 , 8)
4. limits of the high court's quashing power. (Para 10 , 11 , 12)
5. implied representations made when issuing cheques. (Para 13 , 14 , 15 , 16 , 18 , 19)
6. maintainability of ipc 420 prosecutions post-negotiable instruments act. (Para 20 , 21 , 22 , 23 , 24 , 25)
7. requirements for establishing ipc 420 offenses despite cheque dishonor. (Para 26 , 27)
8. court's final rulings on procedure and maintainability. (Para 28 , 29)

1.One Mr. Eashwar M. Sajanani filed a private complaint against M/s. OPTS Marketing Pvt. Ltd., and its Managing Director and the Chief Executive, alleging that on 3-7-1997 the Managing Director and the Chief Executives of M/s. OPTS Marketing Private Limited, had approached him for a hand loan of Rs. 30,000/- for their urgent needs, representing that they had means to repay the amount, and dishonestly and deceptively induced him to part with Rs. 30,000/- against two post dated cheques for Rs. 15,000/- each, drawn on State Bank of India, Lalaguda Branch, Secunderabad, and when those cheques were presented for encashment, they were dishonoured. Inspite of notice demanding payment of the amount covered by the cheques, they have not repaid the amount and hence are liable for punishment under S.420 read with S.34, IPC . On 5-1-1999 the learned Magistrate referred the said complaint to Ramgopalpet Police Station, under S.156(3), Cr. P.C. , and directed the police to submit a report by 5-2-1999, on the basis of which a case in Cr. No. 24 of 1999 was registered by the Ramgopalpet Police. On 3-2-1999 the three named accused in that Crime filed Crl. P. No. 556 or 1999, under S.482, Cr. P.C. , for quashing the proceedings in Cr. No. 24 of 1999 of Ramgopalpet Police Station, placing reliance on some judgments of this Court including that of a Division Bench in D. Prakash v. State of A.P. Cri P. No. 6180 of 1995 dated 15-10-1996. When the case came up for admission before one of us (Bilal Nazki, J.) he doubted the correctness of the decision of the Division Bench in D. Prakash's case (supra). He, observing that as per the practice that has grown up in this Court of a single Judge, while not finding himself in agreement with law laid down by a Division Bench, referring the matters to a Full Bench, felt that the correctness of such procedure also deserves to be decided by a Full Bench along with the correctness of the above mentioned decision of the Division Bench, and formulated two questions for reference to the Full Bench, and directed the matter to be placed before My Lord the Chief Justice for appropriate orders. As per the directions of My Lord the Chief Justice, the following two points formulated by my learned brother Bilal Nazki, J. are referred to this Full Bench :
1. Whether a single Judge can differ with the law laid down by a Division Bench and refer it to Full Bench or is he bound to follow the Division Bench ?
2. Whether the law laid down by the Division Bench in Crl. P. No. 6180 of 1995 is good law ?

2. Point No. 1 : For a decision on this point R.1, R.2, R.5 and R.6 of the Rules of The High Court of Judicature, Andhra Pradesh, Hyderabad in its Appellate Jurisdiction ('Appellate Side Rules' for brevity) would be of useful assistance. As per R.5 of the Appellate Side Rules, a "Full Bench" shall be a "Bench of any number not less than three of the Judges for the time being present as judges of the Court". R.1 of the Appellate Side Rules, which relates to the matters to be heard and determined by a single Judge, provides for the single Judge, before whom the matter is posted for hearing, adjourning the case for hearing and determination by a Bench of two Judges. R.2 of the Appellate Side Rules, which relates to matters which are to be heard and determined by a Bench of two Ju












































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