Ad Circle Pvt. Ltd. Vs. Shankar and ors. - Court Judgment

Excerpt:
negotiable instruments act, 1881 (as amended) - section 138/141--dishonouring of cheques--complaint filed before metropolitan magistrate--complaint dismissed being not maintainable under section 203 cr. p.c.--criminal revision--sufficient reasons existed for mm to proceed against respondents as there was prim a case against them--order of mm set aside--mm directed to proceed with complaint in accordance with law.; there were sufficient reasons for the learned magistrate to proceed against the respondents under sections 136/141 of the act as there was a prima facie case against them.;in view of the above the order dated february 17, 1990 passed by shri d.r. jain, metropolitan magistrate, new delhi with regard to the dismissal of the complaint is hereby set aside. the learned magistrate is hereby directed to proceed with the complaint in accordance with law. - - jain after the appraisal of the oral as well as documentary evidence was of the view that the said complaint was not maintainable and dismissed the same under section 203 of the cr. (3) aggrieved and dis-satisfied with the said judgment and order the petitioner have approached this court. and (4) the drawer of the cheque failed to make the payment within fifteen days of the receipt of the above notice.mohd. shamim, j.(1) this revision petition is directed against the judgment and order dated february 17, 1990 passed by shri d.r. jain. metropolitan magistrate. new delhi. who, whereby the said order dismissed the complaint presented by the petitioner under sections 138/141 of the banking, public financial institutions and negotiable instruments laws (amendment) act. 1988. (hereinafter referred to as 'the act') for the sake of brevity). (2) brief facts which led to the present complaint are as under: that the petitioner-complainant is a private limited company incorporated under the provisions of the companies act, 1956 with its registered office at 29a, sir hariram goenka street, calcutta, with a branch office at 406, meghdoot, 94, nehru place, new delhi. mr. pradeep kumar gupta is a director of the petitioner company and is thus fully authorised and competent to present this petition. indian safety matches co. pvt. ltd. is a private limited company duly incorporated under the companies act with its registered office at 107. bhandari house, 91. nehru place, new delhi. the respondents are the directors of the aforesaid company and are jointly and severally liable for the offences committed by the said company. in 1988 the petitioner published an advertisement in various newspapers for and on behalf of the said company. the petitioners raised several bills for a total sum of rs. 1,03,965.00 . indian safety matches co. pvt. ltd. is still bound and liable to pay the said sum of rs. 1,03,965.00 to the petitioners. the said company as part satisfaction of the above said outstanding amount issued two cheques bearing nos. 584616 dated 11.10.88 for rs. 40,000.00 and a cheque bearing no. 374646 dated 15.12.88 for rs. 10,000.00 (a sum of rs. 50,000.00 in all). the above cheques were drawn on indian overseas bank. connaught place, new delhi. the first cheque to the tune of rs. 40,000.00 was issued in favor of the petitioner company whereas the second cheque in the sum of rs. 10,000.00 was issued in favor of pradeep kumar gupta, director of the petitioner company. both the cheques were issued under the signatures of sri shankar, respondent no. 1. the petitioner on april 3, 1989 deposited the said two cheques for encashment with their banker i.e. state bank of india, new delhi. however, the said two cheques were returned to the petitioner with the endorsement 'refer to drawer'. consequently, the petitioner served the respondents with notices dated april 20, 1989 under section 138(b) of the act by registered post. despite the service of the said notice dated april 20, 1989 the company refused and neglected to pay the said sum of rs. 50.000/. having seer. no alternative the petitioner was compelled and impelled to lodge a criminal complaint on may 16.1989. the said complaint came up for hearing before shri d.r. jain metropolitan magistrate, new delhi. shri d.r.jain after the appraisal of the oral as well as documentary evidence was of the view that the said complaint was not maintainable and dismissed the same under section 203 of the cr. p.c. (3) aggrieved and dis-satisfied with the said judgment and order the petitioner have approached this court. (4) learned counsel for the petitioner, mr. navin prakash. has contended that the learned magistrate fell into a grave error by coming to the conclusion that the present complaint was not maintainable under section 138 of the act. it fact. the learned lower court construed amiss the provisions of section 138 of the act. according to the learned counsel there was ample evidence on record for the magistrate to proceed with the complaint inasmuch as the impugned cheques were dishonoured for insufficiency of funds in the account of the company. (5) since we arc concerned with the construction of section 138 of the act, i am inclined to cite in extenso the provisions of the said section before embarking upon a detailed discussion of law anl evidence. the said section reads as under:- '138.dishonour of cheque for insufficiency, etc.. of funds in the account.- where any cheque drawn by a person on 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. of any debt or other liability, is returned by the bank, unpaid, either because fo 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 cheque, or with both: provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid: and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.(6) a close scrutiny of the relevant law, alluded to above, would reveal that a complainant is required to prove the following: to attract the provisions of section 138 of the act i.e. (1) a cheque drawn by a person must have been dishonoured for insufficiency of funds in the account; (2) the cheque must have been presented within a period of six months of the date on which it was drawn or within the period of its validity, whichever is earlier; (3) the payee or the holder must have made a demand for the payment of the amount by giving a notice in writing to the drawer of the said cheque within fifteen days from the date of receipt of the information by him with regard to the return of the cheque as unpaid; and (4) the drawer of the cheque failed to make the payment within fifteen days of the receipt of the above notice. with the above background let us now examine the facts of the present case and try to find out as to whether the provisions of section 138, adverted to above, are applicable to the facts and circumstances of the present case. (7) a close scrutiny of the impugned two cheques shows that the same were drawn on indian overseas bank on october 11. 1988 and december 15.1988. thus, the said dates are the crucial dates on which we have to find out as to whether the respondents were in possession of sufficient funds for the clearance of the above said two cheqes. the petitioner have placed on record certified copies of an extract of the current account statement of the company for the period from april 15, 1988 to march 31, 1989. after going through the same we find that the respondents never had credit balance in their account for more than rs. 1867.43. in fact, on the relevant dates i.e. october 11, 1988 the respondents were not having sufficient funds for the clearance of the above said cheque of rs. 40.000.00 . their statement of account reveals that in between october 4, 1988 and october 31, 1988 there was a credit balance of rs. 552.43 only. on december 15.1988 the said balance was further reduced to rs. 447.43 only. (8) besides the above statement of account the petitioner have also examined one shri daleep singh. clerk of the indian overseas bank. he has stated in unequivocal terms that a sum of rs. 527.43 only was in the current account of the company on 11.10.1988 and the same amount was to the credit of the company on the other relevant date i.e. 15.12.1988. there is absolutely no reason to disbelieve shri dalip singh on the above point as he is the most independent witness and has absolutely got no motive in the world to depose against the company. it can thus be safely concluded from the above that there was no amount in the account of the company to honour the cheques drawn by it which were presented by the petitioner to their banker. (9) the above said two cheques were returned to the petitioner on 6.4.1989 and 7.4.1989. the petitioner on receipt of the said cheques served the respondent with notices dated april 20, 1989 i.e. within fifteen days of the dishonour of the said cheques. there is no dispute with regard to the fact that the above said cheques drawn by the company in favor of the petitioner were presented to bank within six months from the date of their issue. thereforee, 1 need not dilate upon this point any further. (10) this is also not the case of the parties that she payment was made by she company to the petitioner of the impugned amount to the tune of rs. 50,000.00 in the circumstances stated above i am of the view that there were sufficient reasons for the learned magistrate to proceed against the respondents under sections 136/ 141 of the act as there was a prima facie case against them. (11) in view of the above the order dated february 17, 1990 passed by shri d.r. jain, metropolitan magistrate, new delhi with regard to the dismissal of the complaint is hereby set aside. the learned magistrate is hereby directed to proceed with the complaint in accordance with law.