//
you're reading...
CHEQUE BOUNS CASE

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.

Parts of a cheque based on a UK example drawee...

Image via Wikipedia

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
     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.


Advertisements

About advocatemmmohan

ADVOCATE

Discussion

Trackbacks/Pingbacks

  1. Pingback: Service Law: Bharath Earth Movers Limited Service Rules: Rule 16-Resignation-Withdrawal of-Permissibility-Employee submitted a letter of resignation on 4.1.1993 and requested to be relieved from his duties `as per company rules’-Resignation accepted - 09/16/2011

  2. Pingback: Service Law: Bharath Earth Movers Limited Service Rules: Rule 16-Resignation-Withdrawal of-Permissibility-Employee submitted a letter of resignation on 4.1.1993 and requested to be relieved from his duties `as per company rules’-Resignation accepted - 09/16/2011

  3. Pingback: whether the sections 29 and 357 of the Criminal Procedure Code and section 138 of the Act should be read harmoniously and complementary to each other; and if so done, compensation could be awarded in cases under section 138 of the Act to meet the loss sus - 10/13/2011

  4. Pingback: whether the sections 29 and 357 of the Criminal Procedure Code and section 138 of the Act should be read harmoniously and complementary to each other; and if so done, compensation could be awarded in cases under section 138 of the Act to meet the loss sus - 10/13/2011

  5. Pingback: whether the sections 29 and 357 of the Criminal Procedure Code and section 138 of the Act should be read harmoniously and complementary to each other; and if so done, compensation could be awarded in cases under section 138 of the Act to meet the loss sus - 10/13/2011

  6. Pingback: LEGAL ISSUES whether the sections 29 and 357 of the Criminal Procedure Code and section 138 of the Act should be read harmoniously and complementary to each other; and if so done, compensation could be awarded in cases under section 138 of the Act to meet - 10/13/2011

  7. Pingback: LEGAL ISSUES whether the sections 29 and 357 of the Criminal Procedure Code and section 138 of the Act should be read harmoniously and complementary to each other; and if so done, compensation could be awarded in cases under section 138 of the Act to meet - 10/13/2011

  8. Pingback: Cheque bounce case – quashed by apex court = whether the director is liable even after resignation for cheque s issued after the resignation-inasmuch as the certified copy of the annual return dated 30.09.1999 is a public document, more particularly, in - 11/10/2011

  9. Pingback: Cheque bounce case – quashed by apex court = whether the director is liable even after resignation for cheque s issued after the resignation-inasmuch as the certified copy of the annual return dated 30.09.1999 is a public document, more particularly, in - 11/10/2011

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: