A cheque must be presented to the drawee bank to constitute an offence under Section 138 of the N.I. Act.

ORDER

A private complaint under Section 200 of Cr.P.C. is filed by the respondent/complainant alleging that the cheque which was issued by the petitioner/accused towards legally enforceable debt, when presented for realization was dishonoured for want of funds.

2. Learned Magistrate after recording the sworn statement, took cognizance of the offence under Section 138 of the Negotiable Instruments Act and issued summons. Taking exception of the same, accused is before this Court.

3. Learned counsel for the petitioner/accused submits that the cheque was returned by the drawer bank calling upon the complainant to contact drawer/drawee bank and present again, which clearly implies that the subject cheque was not returned by the drawee i.e, by 'the Bank'. Hence, he submits that the cheque which was returned by the drawer Bank does not constitute the offence under Section 138 of the N.I Act, since the term 'the Bank' as specified in provisos A and B to Section 138 of the N.I Act refers to drawee Bank as held by the Hon'ble Supreme Court in the case of SHRI ISHAR ALLOY STEELS LTD VS JAYASWALS NECO LIMITED reported in (2001) 3 SCC 609 .

4. On the other hand, learned counsel for the respondent/complainant submits that the endorsement issued by the drawer bank, that the cheque may be re-presented after referring to the drawee Bank, constitutes an offence under Section 138 of the N.I Act. In support he places reliance on the decision of the Hon'ble Supreme Court in the case of LAFARGE AGGREGATES AND CONCRETE INDIA PVT. LTD., Vs. SUKARSH AZAD AND ANOTHER reported in 2014 (13) SCC 779.

5. Considered the submissions made by the learned counsel for the parties.

6. The only point that arises for consideration is that, whether the returning of the cheque by the drawer bank, calling upon the complainant to collect the cheque and thereafter re-present the cheque constitutes an offence under Section 138 of the N.I.Act.

7. Admittedly, the subject cheque was not presented by the drawee bank for realization and before it was presented, the drawer bank issued the endorsement. The Hon'ble Supreme Court in the case of SHRI ISHAR ALLOY STEELS LTD VS JAYASWALS NECO LIMITED supra with reference to the term 'a bank' and 'the bank' has held that the term 'a bank' referred to in clause-(a) to the proviso of Section 138 of the Act would mean 'the drawee bank' on which the cheque was drawn and not all banks where the cheque is presented for collection including the bank of the payee, in whose favour the cheque is presented/issued. In other words, to constitute an offence under Section 138 of the N.I. Act, the subject cheque should have been presented to "the bank". In the instant case, there is no material to substantiate that the subject cheque was returned by the drawee bank with an endorsement referred to the drawer or drawee so as to constitute an offence under Section 138 of N.I. Act. Hence, the decision of the Hon'ble Supreme Court in the case of the LAFARGE AGGREGATES AND CONCRETE INDIA PVT. LTD., Vs. SUKARSH AZAD AND ANOTHER supra is not applicable to the facts of this case. Accordingly, I pass the following:

ORDER

i. Petition is allowed.

ii. The impugned proceedings in C.C.No.165/2017 on the file of Civil Judge and JMFC, Sullia, D.K., is hereby quashed.