Equivalent Citation:
2002(1)ALD(Cri)364, 2002(1)ALT(Cri)269
IN THE HIGH COURT OF ANDHRA PRADESH
Crl. Petn. Nos. 3860 to 3866 of 2000
Decided On: 10.12.2001


Appellants: ATV Projects India Ltd. and Anr.
Vs.
Respondent: Nagarjuna Finance Ltd. and Anr.

Hon'ble Judges:B. Sudershan Reddy, J.

Counsels:

For Appellant/Petitioner/Plaintiff: Milind G . Gokhale , Adv.

For Respondents/Defendant: G . Anandam, Adv.

Subject: Criminal
Subject: Banking

Acts/Rules/Orders:
Criminal Procedure Code (CrPC), 1973 - Sections 482; Negotiable Instruments Act, 1881 - Section 138


Cases Referred:
Ashok Yeshwant Badave v. Surendra Madhavarao Nighojakar, II (2001) BC 1 (SC), I (2001) CCR 358 (SC), II (2001) SLT 669, (2001) 3 SCC 726; Anil Kumar Sawhney v. Gulshan Rai, (1993) 4 SCC 424, 1993 SCC (Cri.) 1243

Disposition: Petitions dismissed

Case Note:

Criminal - validity of proceedings - Section 482 of Criminal Procedure Code, 1973 and Section138 of Negotiable Instruments Act, 1881 - petitioner and respondent entered into hire purchase agreement - agreed machine delivered by respondent against post dated cheque issued by petitioner - petitioner alleged that machine was not functioning properly and instructed bank to stop payment - cheque presented were returned dishonoured pursuant to said instruction - respondent filed criminal complaint under Section 138 of Act - petitioner resisted complaint as debt in respect of which cheque is issued is disputed - determination of condition of machine cannot be entertained being question of fact -Court declined to interfere in proceedings initiated by respondent.

ORDER

B. Sudershan Reddy, J.

1. This batch or criminal petitions may be disposed of by a common order since common question arises for consideration in all these cases. It would be enough if the facts in criminal petition No. 3860 of 2000 are noticed.

2. Criminal petition No. 3860 of 2000 is filed by the petitioners to quash the proceedings in C.C. No. 126 of 1998 on the file of the learned IV Metropolitan Magistrate, Nampally in which the petitioners are arrayed as the accused.

3. The 1 st respondent herein filed complaint against the petitioners herein for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the Act'). It is the case of the respondent-complainant that the 1 st petitioner represented by the 2nd petitioner as its Chairman entered into hire purchase agreement dated 4.2.1995 and availed finance from the complainant. It is alleged that the 1 st petitioner-company represented by the 2nd petitioner also agreed to repay the finance amount of Rs. 2,50,000.00 with interest in 36 monthly installments each for Rs. 9,39,236.10 and in accordance with the schedule forming part of the hire purchase agreement dated 4.2.1995 entered into by the 1st petitioner represented by the 2nd petitioner accepting the repayment in the manner appended in the said schedule. The petitioners accordingly issued two cheques dated 15.9.1997 and 15.10.1997 for Rs. 9,39,236.10 each drawn on the Bank of India, Madura Branch, Madura, Uttar Pradesh and signed by the accused No. 3 as one of the authorized signatories of the 1 st petitioner towards partial discharge of the debt payable to the complainant by way of Installments.

4. The cheques were presented for realization. They were returned dishonoured with memo dated 21.10.1997 endorsing 'payment stopped'. Thereafter the respondent-complainant got issued notice on 21.11.1997 calling upon the petitioners to pay the said amount of the two cheques within 15 days from the date of receipt of the notice issued under the provisions of Section 138 of the Act. The petitioners received the notice but failed to pay. This is the sum and substance of the complaint.

5. The case of the petitioners is that the 1st petitioner had entered into hire purchase agreement dated 4.2.1995 and placed an order with 2nd respondent-complainant for purchase of machinery worth R.2,50,000.00 to be repaid in 36 monthly instalments @ Rs. 9,39,236.10 inclusive of interest at 24% p.a. The machinery supplied by the 2nd respondent is defective and not performing properly and they were not thejnachines which were actually demanded by the petitioner. In the circumstances the petitioners were constrained to file suit bearing O.S. No. 496 of 1997 on the file of the II Civil Judge, Senior Division, Madura seeking appropriate directions as against the respondent-complainant to replace the machinery with new machinery in sound and working condition. The suit is stated to be pending.

6. It is also stated that the petitioners filed a criminal complaint against the 2nd respondent-complainant for the offences punishable under Sections 417, 420, 465 and 471 of the Indian Penal Code before the Judicial Magistrate, Sadar, Madura by the complaint No. 1180/9/97 and the same is pending.

7. In nutshell it is the case of the petitioners that the respondent-complainant had taken from the petitioner company 36 cheques each for Rs. 9,39,236.10 and Rs. 1,87,847.22 and subsequent to the civil dispute initiated by the petitioners and despite the fact that the petitioner-company had issued instructions to stop payment by letter dated 7.9.1997 the 2nd respondent presented the cheques and based on the return of the cheques filed the complaint.

8. Mr. Milind G. Gokhale, the learned Counsel appearing for the petitioners, submits that the debt in respect of which cheques were issued by the petitioners is a disputed debt which is disputed by the petitioners by filing civil suits. Therefore, Section 138 of the Act is not attracted. In nutshell it is the submission of the learned Counsel for the petitioners that unless the issue as to whether the 2nd respondent is entitled for the money under the said cheques is settled in the civil suit filed by the petitioners, the respondent-complainant cannot invoke Section 138 of the Act and file complaint against the petitioners.

9. In nutshell it is contended that on the date of the filing of the complaint there is no legally enforceable debt as such to be discharged by the petitioners herein. The respondent-complainant maliciously and fraudulently deposited the said cheques and filed the complaint which is nothing but an abuse of legal process.

10. It Is also contended by the learned Counsel for the petitioners that there is nothing like a post dated cheque. The so-called post dated cheques obtained by the respondent-complainant at the most are bills of exchange and therefore their dishonour would not give rise to a cause for filing complaint under Section 138 of the Act.

11. In Ashok Yeshwant Badave v. Surendra Madhavarao Nighojakar, MANU/SC/0170/2001, the Supreme Court while interpreting Section 5 and the provisions of Sections 6, 11, 138, 139, 140 of the Act, as amended by Act 66 of 1988, observed :
From a bare perusal of Sections 5 and 6 of the Act it would appear that a bill of exchange is a negotiable instrument in writing containing an instruction to a third party to pay a stated sum of money at a designated future date or on demand. On the other hand, a "cheque" is a bill of exchange drawn on a Bank by the holder of an account payable on demand. Under Section 6 of the Act a "cheque" is also a bill of exchange but it is drawn on a Banker and payable on demand. A bill of exchange even though drawn on a Banker, if it is not payable on demand, it is not a cheque. A "post dated cheque" is not payable till the date which is shown thereon arrives and will become cheque on the said date and prior to that date the same remains bill of exchange.

For prosecuting a person for an offence under Section 138 of the Act, it is inevitable that the cheque is presented to the Banker within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier. When a post dated cheque is written or drawn, it is only a bill of exchange and so long the same remains a bill of exchange, the provisions of Section 138 are not applicable to the said instrument. The post-dated cheque becomes a cheque within the meaning of Section 138 of the Act on the date which is written thereon and the 6 months' period has to be reckoned for the purposes of Proviso (a) to Section 138 of the Act from the said date. Thus while respectfully agreeing with the law laid down by this Court in the case of Anil Kumar Sawhney v. Gulshan Rai, MANU/SC/0578/1993, we hold that six months' period shall be reckoned from the date mentioned on the face of the cheque and not any earlier date on which the cheque was made over by the drawer to the drawee.

12. It is thus clear that a post dated cheque is not payable till the date which is shown thereon arrives. But the same will become cheque on the said date and prior to that date the same remains bill of exchange. In the circumstances, the contention that the post dated cheques obtained by the respondent-complainant would not give rise to a cause for their presentation for realisation is totally untenable and unsustainable.

13. However, whether there is any legally enforceable debt as such which is required to be discharged by the petitioners, is a question of fact. It is not possible for this Court to record any finding as to whether the mechinery that was supplied by the respondent-complainant is a defective one and as to whether the parties require to await the final adjudication of the suit filed by the petitioners, are to be gone into by the learned Magistrate in the impugned proceedings. It requires recording of evidence and exhibition of documents. At this stage any comment or opinion from this Court may cause available prejudice to the claim of the petitioners as well as the respondent. Such course is not permissible in law.

14. For the aforesaid reasons, I am not inclined to interfere at this stage to quash the proceedings initiated by the respondent-complainant.

15. For the aforesaid reasons, this batch of criminal petitions shall stand dismissed. Consequently the learned Magistrate shall proceed with the inquiry and trial without being influencd by any of the observations made by this Court. The defence of the petitioners is left open.

16. The learned Magistrate is directed to dispense with the attendance of the 1st petitioner-Chairman on the dates of hearing unless the learned Magistrate opines his presence to be necessary. An application in this regard shall be filed by the 1st petitioner and the same shall be ordered subject to such terms and conditions as the learned Magistrate deems fit and proper in the circumstances.