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.
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,
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
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.
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.