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PETITIONER: K.K. SIDHARTHAN

       Vs.

RESPONDENT: T.P. PRAVEENA CHANDRAN AND ANOTHER

DATE OF JUDGMENT:       08/10/1996

BENCH: G.N. RAY, B.L. HANSARIA

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T HANSARIA.J.      Respondent  No.1,   hereinafter  referred   to  as  the respondent, filed  a complaint  against the  appellant under section 138 read with 149 of the Negotiable Instruments Act, 1881 (for  short the  ‘Act’) and section 420 of the IPC read with sections 190 and 200 of the Code of Criminal Procedure. The gravamen  of the  allegation is  that the petitioner had issued  two   post-dated  cheques   dated   10.10.1994   and 31.12.1994, each  for a sum of Rs 3,00,000/- drawn on Indian Overseas Bank,  Trichur Branch.  But on  the  cheques  being presented, the  same were returned unpaid on 15.10.1994 with the endorsement  "Payment countermanded  by the drawer". The complaint further  stated that  the  cheques  were  returned unpaid for  want of  sufficient funds  in the  account.  The appellant approached  the High  Court of Kerala for quashing the complaint  but the  High Court  refused to  do so. hence this appeal. 2.   The main part of Section 138 of the Act reads as below:      "138.  Dishonour   of  cheque   for      insufficiency  of   funds  in   the      account. -  Whore 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, or  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      deemed to have committed an offence      and shall, without prejudice to any      other provision  of  this  Act,  be

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    punished with  imprisonment  for  a      term which  may extend to one year,      or with  fine which  may extend  to      twice the amount of the cheques, or      with both." This shows  that section  138 gets  attracted  in  terms  if cheque is dishonoured because of insufficient funds or where the amount  exceeds the  arrangement made  with the bank. It has, however,  been  held  by  a  Bench  of  this  Court  in Electronics Trade and Technology Development Corpn, LTD, vs. Indian Technologists  and Engineers  (Electronics) (P) Ltd., 1996 (2)  SCC 739,  that even  if a  Cheque  is  dishonoured because of  ‘stop Payment’  instruction to the bank, section 138 would get attracted. 3.   The case  of the  appellant is  that the  cheques  were returned, not  because of insufficient funds, but because he had issued stop memo to the bank for reasons detailed in the letter of  appellant’s Advocate dated 4.10.1994 addressed to the respondent.   This  letter was replied by the respondent on 12.10.1994 stating, inter alia, that the allegations made in the letter of 4.10.1994 were not true; and date and place may be  fixed for  perusal of  the  accounts  and  connected records.   The appellant has produced and connected records. The appellant  has produced   A  communication of the Indian Overseas Bank,  Thrissur, Branch, which is at page 64 of the Paper Book,  showing that  when the cheques in question were presented there  was sufficient  balance   in the account of the appellant.   This communication bears the numbers of two cheques which  tally with  those mentioned in the complaint. we are  therefore,  satisfied  that  the  cheques  were  not returned because of insufficient funds, as is the allegation in the complaint. 3A.   It may  be stated  that the  learned counsel  for  the respondent  filed   a  written  submission,  without  having obtained permission when the case has been finally heard and reserved for  judgment, on  7.10.1996 in  which it  has been stated that  the cheques  in question  were  issued  against Account No.  562 of  the petitioner,  in which  there was no cover.   The further  submission is  that the  letter of the Bank Manager which is at page 64 really. 5.  From the facts mentioned above, we are satisfied that in the present  case cheques were presented after the appellant had directed  its bank  to ’stop  payment’.  We have said so because though it has been averred in the complaint that the cheque dated 10.10.1994 was presented for collection on that date itself  through the  bank of  the respondent  which  is Catholic Syrian  Bank Ltd.  from the aforesaid letter of the Indian  Overseas   Branch,  we  find  that  the  cheque  was presented on  15.10.1994 (in clearing).  The lawyer’s notice to the  respondent being  of 4th  October,  which  had  been replied on  12th from  Cochi, which  is  the  place  of  the respondent, whereas the Advocate who issued notice on behalf of the  appellant was  at Thrissur, it would seem to us that the  first   cheque  had   even  been  presented  after  the instruction of  ’stop payment’  issued by  the appellant had become known to the respondent. 6.   The aforesaid being the position, we are satisfied that no case  under Section  138 of the Act has been made out and we, therefore,  quash the  complaint.   We may make it clear that we have not addressed ourselves on the question whether the respondent  was in  fact entitled  to receive any amount from the appellant. 7.   The appeal  is, therefore,  allowed.   In the facts and circumstances of the case, we make no order as to costs.

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