Mr. A Sudarshan Reddy and Mrs. Monica Pole, learned Counsel representing
the respective parties and also the Addl. Public Prosecutor.
2. In both
these criminal petitions, petitioner and respondents are the same.
3. The complainant
filed C.C. Nos. 1293 and 1294 of 2000 on the file of XXIII Metropolitan
Magistrate, City Criminal Courts, Hyderabad against the petitioners
herein under Section 138 of Negotiable Instruments Act, 1881, herein
after referred to as "the Act" for the purpose of convenience.
The allegations made in these complaints are to the effect that the
cheques given by the petitioners were bounced. It is also stated that
the first respondent-complainant had alleged that these cheques were
given for the liability of M/s Sujana Corporation and M/s Sujana Corporation
is a sister concern of the petitioner company. It is further stated
that in the entire complaint, there is no averment regarding the liability
and -it is also stated that the petitioner company is no-way concerned
with M/s Sujana Corporation Limited and hence the complaints and the
proceedings in C.C. Nos. 1293 and 1294 of 2000 are liable to be quashed.
4. Mr. Sudarshan
Reddy, learned Counsel representing the petitioner with all emphasis
had submitted that here is a case where the allegations in the complaints
do not disclose any liability at all and there is no question of presuming
any liability under the provisions of the Act and in such a case, these
complaints under Section 138 of the Act are not maintainable and the
same are liable to be quashed. Learned Counsel had placed strong reliance
on the decisions reported in U. Mallikarjun v. R. Vimala, 1997(2) ALT
Crl. 342 and in Mohana Krishna v. Union of India, MANU/AP/0086/1995.
5. On the
contrary, Ms. Monica Pole, learned Counsel on behalf of Mr. Milind G.
Gokhale representing the first respondent had contended that the question
relating to the liability or the absence of liability may not be of
any consequence at all and these are questions of fact to be decided
at the time of trial and these questions need not be taken into consideration
while deciding a criminal petition under Section 482 of the Code of
Criminal Procedure, 1973, hereinafter referred to as "Code"
for short for the purpose of convenience. Learned Counsel while further
elaborating her arguments had also drawn the attention to the decisions
reported in M/s. MMTC Ltd. v. Medchi Chemical and Pharma Chemicals Private
and in ATV Projects India Ltd., Mumbai v. Nagarjuna Finance Ltd., 2002(1)
ALD (Crl.) 364
both the Counsels.
7. I have
perused the complaints filed in both these matters. It may be appropriate
to have a look at the allegations made in para 4 of the complaint, which
reads as hereunder :
It is submitted
that the complainant has received the Bank Return Memo of the Bankers
of complainant dated 18.9.1999 along with the Memo of the Bankers of
the accused dated 16.9.99 and after coming the knowledge of the complainant
that the cheques was bounced due to "Insufficient Funds' immediately
approached the accused 1 and 2 as they have agreed to repay the outstanding
due by their sister concern i.e. M/s Liberty Corporation Limited formerly
known as M/s Sujana Corporation and issued the present cheque promising
that the cheques would be honoured when presented; and informed that
the cheques had been bounced and requested them to repay the amount
of the contents of the cheque to avoid further legal complications.
The accused neither responded to the request of the complainant nor
complied with the request made by the complainant. Finally, the complainant
got issued a legal notice dated 28.9.1999 under Section 138 of N.I.
Act to the accused herein and the accused have received the said notice
vide Acknowledgements dated 6.10.1999 but till date the accused neither
complied with the notice nor replied to the said legal notice. As such,
the accused have committed an offence punishable under Section 138 of
8. From the
allegations referred to supra, a contention was advanced by the learned
Counsel for the petitioner that there is no liability at all and in
the absence of any liability, the question of initiating action under
Section 138 of the Negotiable Instruments Act does not arise at all.
The question of liability and the proof of allegations made in relation
there to are all questions of fact.
9. In Mallikarjun
v. R. Vimala (supra) at 343, the Apex Court held:
It is clear
that the cheques should be issued by the drawer in discharge of full
or part of the liability and if the cheque was dishonoured due to insufficient
funds, etc., then only 138 of the Act is attracted, if other conditions
are complied. On a perusal of the averments that there is no averment
in the discharge of any legally enforceable debt or other liability.
10. The same
view was expressed in Mohan Krishna v. Union of India (supra).
Bhoopal v. Sanam Jhansi Devi, 2002 (1) ALD 817, it was held:
I am unable
to agree with the contention of the learned Counsel for the petitioner
that the complaint against the petitioner is not maintainable because
the company is not made a party to the proceedings. Section 141 of the
Act, strongly relied on by the learned Counsel for the petitioner, lays
that the person who has drawn the cheques and as well as the company
will be liable for the offence under Section 138 of the Act. Therefore,
from Section 141 of the Act, it is clear that part from the company,
the person who has drawn the cheque also is liable for punishment under
Section 138 of the Act. So merely because the company in which the petitioner
was a Director is not shown as an accused in the complaint, it cannot
be said that the complaint against the petitioner is not maintainable.
I see no
force in the contention of the learned Counsel for the petitioner that
since the cleques were issued as security for payment but not in discharge
of a legally enforceable debt proceedings under Section 138 of the Act
are not maintainable. In view of Section 139 of the Act, the presumption
is that the cheques issued in favour of the 1st respondent was in discharge
of legally enforceable liability. Since the phrase used in Section 139
of the Act is "shall presume", the burden of proof is on the
petitioner to establish that the cheques were not issued in discharge
of a legally enforceable debt or liability. The averments in the complaint,
prima facie, disclose that the 1st respondent had deposited Rs. 1,00,000/-
with the company and the cheques drawn by the petitioner and another
was issued towards payment of the said amount. It is for the petitioner
to establish that the cheques of Rs. 1,00,000/-, which was dishonoured,
was not in fact issued towards the discharge of the legally enforceable
debt or liability due to the 1st respondent. The question as to whether
there is a legally enforceable debt or liability to 1st respondent or
not can be decided only after the parties adduce evidence during the
trial, but not at this stage,
11. In ATV
Projects India Ltd., Mumbaiv. Nagarjuna Finance Ltd. (supra) was held
that where there is subsisting debtor not is a question of fact and
it can be decided in trial only and hence complaint cannot be quashed
under Section 482 of the Code.
12. In M/s
MMTC Ltd. v. Medchi Chemical and Pharma Private Limited (supra), the
Apex Court had arrived at the conclusion that the Court in exercise
of inherent powers cannot quash complaint on grounds that cheques were
not given for any debt or liability and there is no requirement that
complainant must specifically allege in complaint that there is a subsisting
13. In A.V.
Murthy v. B.S. Naga Basavanna, it was held by the Apex Court that:
was alleged that the cheque was drawn to pay back amount advanced by
the complaint four years back and dismissal at threshold on the ground
that as amount was advanced four years prior there was no legally enforceable
debt, not proper."
14. In the
light of the facts and circumstances referred to supra, the questions
which had been raised and argued elaborately by the learned Counsel
for the petitioners in these Criminal Petitions, in my considered opinion,
are questions of fact to be decided at the time of trial and such questions
of fact used not be decided while deciding the criminal petitions under
Section 482 of the Code.
from any angle, these criminal petitions are devoid of merits and accordingly
these criminal petitions are dismissed.