Vivek Jain vs State Of U.P. And Another
2015 Latest Caselaw 4865 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
           		Judgment reserved on : 19.11.2015                       
 
       		                             Judgment delivered on : 1.12.2015      
 

 
Case :- APPLICATION U/S 482 No. - 33112 of 2015
 

 
Applicant :- Vivek Jain
 
Opposite Party :- State Of U.P. And Another
 
Counsel for Applicant :- Murari Lal Jain
 
Counsel for Opposite Party :- G.A.
 

 

 
Hon'ble Om Prakash-VII,J.

Heard learned counsel for the applicant and learned AGA for the State.

This application under Section 482 Cr.P.C. has been filed with a prayer to quash the impugned orders dated 28.7.2015 and 25.3.2015 arising out of criminal complaint case no.757 of 2007 (Vikash Bansal Vs. Vivek Jain) under section 138 of the Negotiable Instrument Act, P.S. Kotwali, District Agra pending in the court of Judicial Magistrate, Court No.1, Agra. Further prayer has been made to stay the proceedings of the aforesaid case.

Submission of the learned counsel for the applicant is that no offence, as alleged in the summoning order, is made out against the applicant. Information for stop payment had been given to the Bank and due to that reason, the cheque in question was not encashed. Since there was sufficient fund in the account and applicant has given stop payment instruction, provision of section 138 of the Negotiable Instrument Act is not attracted in the matter. An objection filed by the applicant in this respect was illegally rejected. It was further submitted that the revision filed against the order of the Magistrate dated 25.3.2015 was also illegally rejected. Learned counsel for the applicant contended that there was no any liability of the applicant to pay any amount to the opposite party no.2. The cheque in question had been given to the opposite party no.2 as security. When applicant demanded the cheque in question from the complainant-opposite party no.2, he told that cheque is misplaced and as and when it is traced out, it will be paid to him (applicant). Thus, the summoning order was passed clearly in violation of the settled legal position.

Learned counsel for the applicant has referred to the judgment of this Court passed in the case of Rajendra Pratap Singh Vs. State of U.P. & Another [2015 (89) ACC 886] wherein this Court on the basis of insufficient funds in the said account and on the basis of information given by the complainant for stop payment, found the summoning order bad in the eye of law and proceedings of the complaint case was quashed.

Per contra, learned A.G.A. argued that the fact of payment of the cheque by the applicant to the complainant is not disputed. Business transaction between the parties was also not disputed. Submission of the applicant that he had paid the cheque in question for assurance is matter of fact, which requires evidence. The court dealing with the matter, at this stage, has to see only a prima facie case and there is a prima facie case as the cheque was dishonoured by way of stop payment instruction given by the applicant. Since there was sufficient fund in the said account, the applicant with malafide intention has informed the bank for stop payment. Thus, it was submitted that there is no any illegality or infirmity in the order passed by the courts below and there is no need to invoke the jurisdiction under section 482 Cr.P.C. to quash the entire proceedings of the case.

Initially, there was different opinion of the High Courts about the maintainability of the complaint under section 138 of the Negotiable Instrument Act where the drawer had stopped the payment and cheque was dishonoured due to that reason, but the Hon'ble Supreme Court in the case of Electronics Trade and Technology Development Corporation Limited Vs. Indian Technologists and Engineers (Electronics) Pvt. Ltd. & Another reported in AIR 1996 SC 2339 observed that "It would thus be clear that when a cheque is drawn by a person on an account maintained by him with the banker for payment of any amount of money to another person out of the account for the discharge of the debt in whole or in part or other liability is returned by the bank with the endorsement like (1) "refer to the drawer" (2) "instructions for stoppage of payment" and (3) "stamp exceeds arrangement", it clearly amounts to dishonour within the meaning of Section 138 of the Negotiable Instrument Act.

Hon'ble Apex Court in the case of M/s Modi Cements Ltd. Vs. Kuchil Kumar Nandi reported in 1998 AIR SCW 842 = 1998 CrLJ. Page 1397 has observed in paragraph no.16 that

"(16) We see grate force in the above submission because once the cheque is issued by the drawer a presumption under Section 139 must follow and merely because the drawer issues a notice to the drawer or to the Bank for stoppage of the payment it will not preclude an action under Section 138 of the Act by the drawer or the holder of a cheque in due course. The object of Chapter XVII, which is intituled as "OF PENALTIES IN CASE OF DISHONOR OF CERTAIN CHEQUES FOR INSUFFICIENCY OF FUNDS IN THE ACCOUNTS" and contains Section 138 to 142, is to promote the efficacy of banking operations and to ensure credibility in transacting business through cheques. It is for this reason we are of the considered view that the observations of this Court in Electronics Trade & Technology Development Corporation Ltd., Secunderabad (supra) in paragraph 6 to the effect "Suppose after the cheque is issued to the payee or to the holder in due course and before it is presented for encashment, notice is issued to him not to present the same for encashment and yet the payee or holder in due course presents the cheque to the bank for payment and when it is returned on instructions. Section 138 does not get attracted", does not fit in with the object and purpose for which the above chapter has been brought on the Statute Book."

Hon'ble Apex Court again in the case of M/s M.M.T.C. Ltd. & Another Vs. Medchl Chemicals & Pharma Pvt. Ltd. & Another reported in 2002 Vol. I SCC Pg.234 discussing the earlier decision in paragraph 19 held as under.

"There is therefore no requirement that the Complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on basis of averments in the Petitions filed by them the High Court could not have concluded that there was no existing debt or liability. Lastly it was submitted that a complaint under Section 138 could only be maintained if the cheque was dishonoured for reason of funds being insufficient to honour the cheque or if the amount of the cheque exceeds the amount in the account. It is submitted that as payment of the cheques had been stopped by the drawer one of the ingredients of Section 138 was not fulfilled and thus the complaints were not maintainable. Just such a contention has been negatived by this Court has, in the case of Modi Cements Ltd. v. Kuchil Kumar Nandi reported in (1998) 3 SCC."

If the law laid down in the above-mentioned cases are taken into consideration in the light of the facts and circumstances of the present case, it is evident that there was sufficient amount in the account maintained by the drawer on the date of presentation of the cheuque. Stop payment instruction was given to the concerned Bank by the drawer. It may be mentioned here that ordinarily the stop payment instructions are issued to the Bank by the account holder when there is no sufficient amount in the account. The reason for stopping the payment, however, can be manifold. It is essential that to issue stop payment instructions, there must be funds in the account. In the first place, as per presumption under section 139 of the Negotiable Instrument Act, the cheques must be issued towards the liability. The burden to prove non-existence of any debt or liability or the fact that the dishonour of the chque was not due to insufficient funds lies on the accused, which can be discharged by him during trial. Once the cheque is issued by the drawer, a presumption under section 139 of the Act must follow and merely because the drawer issues a notice to the drawee or to the bank for stoppage of the payment, it will not preclude an action under section 138 of the Act by holder to the cheque.

In the present matter, when the cheque is signed by the applicant, there was sufficient fund in the account, business terms are also admitted between the parties and the cheque in question was not encashed on the ground of stop payment instructions given by the applicant, the view taken by the courts below cannot be termed to be illegal or improper. The summoning order was passed on the basis of sufficient material available on the record. The law laid down by this Court in the case of Rajendra Pratap Singh (supra) does not help the applicant in any manner as there was sufficient fund in the account.

In view of the above, there is no illegality or infirmity in the impugned orders passed by the courts below and no ground exists to quash the proceedings of the aforesaid complaint case.

Application is accordingly dismissed.

Dtd./- : 01.12.2015.

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