IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 27.03.2025 CORAM THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN Crl.O.P.No.23219 of 2023 and Crl.M.P.Nos.16234 and 16235 of 2023 M/s. Rajkham Housing, Rep., by its Sole Proprietor, Mr.M.Arumugam, S/o. S.Murugesan, “Rajkham Sristi”, No.105, Arcot Road, Kodambakkam, Chennai – 600 024. ... Petitioner Vs M/s. Presidency Finance Limited, A Company incorporated under the provisions of the Companies Act, 1956, Represented by its Authorized Signatory/Authorized Representative, Mr.Hiralal having its registered office at Door No.24/12, 3^rd Floor, Raghaviah Road, T.Nagar, Chennai – 600 017. ... Respondent Criminal Original Petition is filed under Section 482 of Cr.P.C., to call for the records pertaining to S.T.C.No.1144 of 2023 on the file of the Judicial Magistrate Fast Tract Court No. III at Saidapet, Chennai and quash the same.

For Petitioner : Mr.M.Ravikumar for Mr.Arun.G For Respondent : G.Vivekanand

O R D E R

This petition has been filed to quash the proceedings in S.T.C.No.1144 of 2023 on the file of the Judicial Magistrate Fast Tract Court No. III at Saidapet, Chennai.

2. The petitioner is an accused in the complaint lodged by the respondent for the offence under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the NI Act' for short).

3. The case of the respondent is that the petitioner availed a loan to the tune of Rs. 3 Crores from the respondent and also entered into an agreement. As per the loan agreement, the petitioner agreed to repay the said loan with interest at the rate of 21% compounded on a monthly basis. From the inception, the petitioner failed to comply with their obligations as per the loan agreement and committed default in repayment of the loan amount and the interest agreed by the accused. On 28.02.2023, the petitioner had paid only a sum of Rs. 2,61,00,000/- on various dates against a total outstanding amount of Rs. 3,97,28,140/-. Therefore, the petitioner is in due of Rs. 1,36,28,140/- with future interest. Further, the cheque was issued by the petitioner on the date of the agreement for the loan and was presented for collection to the tune of Rs. 2 Crores in order to realise the loan amount. However, it was returned dishonoured for the reason "payment stopped by drawer". After causing statutory notice, the respondent filed a complaint.

4. The learned counsel for the petitioner would submit that even according to the respondent, and on the date of presentation of the cheque, there was only a due to the tune of Rs. 1,36,28,140/-. However, the cheque was presented for a sum of Rs. 2 Crores. Even according to the respondent, the petitioner had repaid the loan to the tune of Rs. 2,61,00,000/-, and he was in due to the tune of Rs. 1,36,28,140/-. It is a clear violation of the provision under Section 56 of the NI Act. In support of his contentions, the learned counsel for the petitioner relied upon the judgment of the Hon'ble Supreme Court of India in Crl. A. No. 1497 of 2022 (Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel and Another).

5. Heard the learned counsel for the petitioner and perused the materials available on record. Though notice has been served, the respondent has not entered appearance, either in person or through Counsel.

6. The only ground raised by the petitioner is that the respondent ought not have presented the cheque for collection for a sum of Rs. 2 Crores when the loan due was only to the tune of Rs. 1,36,28,140/-. Further, as on 28.02.2023, the petitioner had paid a sum of Rs. 2,61,00,000/- on various dates. Admittedly, the cheque was issued at the time of availing the loan and while executing the loan agreement dated 21.06.2021. After issuance of the said cheque, there was payment till 28.02.2023.

7. It is relevant to extract the provision under Section 56 of the NI Act, which reads as follows:-

“56. Indorsement for part of sum due.—No writing on a negotiable instrument is valid for the purpose of negotiation