Delhi High Court
Sanjay Choubey vs Ms. Sindhu Araga on 21 January, 2010
Author: Sunil Gaur
A-5,6,7 & 8
* HIGH COURT OF DELHI : NEW DELHI
Judgment reserved on: January 19, 2010
Judgment pronounced on : January 21, 2010
+ Criminal M.C. No. 4340/2009
% Sanjay Choubey ... Petitioner
Through: Mr. Ambar Qamaruddin, Advocate
versus
Ms. Sindhu Araga ... Respondent
Through: Nemo.
Criminal M.C. No. 4341/2009
% Sanjay Choubey ... Petitioner
Through: Mr. Ambar Qamaruddin, Advocate
versus
Ms. Spandana Araga ... Respondent
Through: Nemo.
Criminal M.C. No. 4342/2009
% Sanjay Choubey ... Petitioner
Through: Mr. Ambar Qamaruddin, Advocate
versus
Ms. Sathyavati Araga ... Respondent
Through: Nemo.
Criminal M.C. No. 4343/2009
% Sanjay Choubey ... Petitioner
Through: Mr. Ambar Qamaruddin, Advocate
versus
Mr. A.B.R.P. Reddy ... Respondent
Through: Nemo.
Crl. M.C. Nos. 4340, 4341, 4342, 4343 of 2009 Page 1
CORAM:
HON'BLE MR. JUSTICE SUNIL GAUR
1. Whether the Reporters of local
papers may be allowed to see
the judgment?
2. To be referred to Reporter or not?
3. Whether the judgment should be
reported in the Digest?
SUNIL GAUR, J.
Criminal M.A. Nos. 14884, 14886, 14888 & 14890 of 2009
1. Exemption allowed, subject to all just exceptions.
2. Applications stand disposed of.
Criminal M.C. Nos. 4340, 4341, 4342 & 4343 of 2009 & Crl.
M. A. Nos. 14883,14885,14887,14889 of 2009
1. A common question raised in these four petitions is whether
dishonoring of cheques with remarks "stop payment", would be an
offence under Section 138 of the Negotiable Instruments Act, 1881
(hereinafter referred to as the N.I. Act).
2. Respondents are the share-holders of M/s. Empathy Digital
Media Private Limited, which was purchased by the petitioner and in
terms of the Memorandum of Understanding of 25th June, 2008, with
the Directors of the aforesaid Private Limited Company, four
cheques were issued by the petitioner on 15th March, 2009, in
discharge of legal liability in terms of the aforesaid Memorandum of
Crl. M.C. Nos. 4340, 4341, 4342, 4343 of 2009 Page 2
Understanding in favour of the respondents, who belong to one
family. The Total amount of these four cheques was Rs.65,16,557/- .
On presentation, these four cheques were dishonoured with the
remarks "stop payment", which led to filing of four different
complaints under Section 138 of the N. I. Act, against the petitioner,
who is common in all these four petitions. He has been summoned
as an accused in these four complaints under Section 138 of the N.
I. Act, quashing of which is sought in these four petitions.
3. Learned Counsel for the petitioner states that the question
involved in these four petition filed by him is common one and
therefore, these four petitions can be heard together. The crux of
the arguments advanced on behalf of the petitioner is that return of
cheques with remarks "stop payment" would not be an offence
under Section 138 of the N.I. Act. To state so, learned Counsel for
the petitioner relies upon three decisions of the Apex Court and
those are "Electronics Trade & Technology Development Corpn. Ltd.
Secundrabad v. Indian Technologies & Engineers (Electronics) (P)
Ltd. and Another" (1996) 2 SCC 739; "K.K. Sidharthan v. T.P.
Praveena Chandran And Another" (1996) 6 SCC 369, and "Modi
Cements Ltd. v. Kuchil Kumar Nandi" (1998) 3 SCC 249.
4. After having heard learned Counsel for the petitioner for quite
some time, this Court finds that the two decisions of the Apex Court
in Electronics Trade (Supra) & Sidharthan (Supra) have been
reconsidered by a larger Bench of three Judges in Modi Cement
Crl. M.C. Nos. 4340, 4341, 4342, 4343 of 2009 Page 3
(Supra) and it has been declared by the Apex Court in no uncertain
terms that they do not lay down the law correctly. The observations
made by the Apex Court in Modi Cement (Supra) needs to be taken
note of and are as under:-
"The aforesaid propositions in both these reported
judgments, in our considered view, with great respect are contrary
to the spirit and object of Sections 138 and 139 of the Act. If we are
to accept this proposition it will make Section 138 a dead letter, for,
by giving instructions to the bank to stop payment immediately
after issuing a cheque against a debt or liability the drawer can
easily get rid of the penal consequences notwithstanding the fact
that a deemed offence was committed."
5. The ratio of ruling in aforesaid "Modi Cement" (Supra) is that
the drawer of the cheque undoubtedly gets an opportunity under
Section 139 of the N.I. Act to rebut the statutory presumption
attached to the issuance of a cheque, which is dishonoured.
Otherwise too, bare reading of Section 138 of the N. I. Act makes it
clear that the dishonor of the cheque for insufficiency etc. would
attract its applicability. The reason for stopping the payment of the
cheques in question is a matter of fact which is not required to be
gone into in these proceedings. It would be open to the petitioner to
rebut the statutory presumption at trial while relying upon the reply
to the legal Notice issued by the respondents prior to the filing of
the complaints in question. The stand taken by the petitioner herein
Crl. M.C. Nos. 4340, 4341, 4342, 4343 of 2009 Page 4
in these petitions is also required to be considered by the trial court
at appropriate stage. It would be premature for this Court to do so
now. Prima Facie case under Section 138 of the N.I. Act is made out
against the petitioner. Impugned order summoning the petitioner as
an accused in these proceedings under Section 138 of N.I. Act,
cannot be faulted. No case for quashing of the complaints in
question and the summoning order is made out.
6. These petitions are dismissed in limini with the observation
that anything said herein shall have no bearing on merits at trial.
7. These petitions and pending applications are accordingly
disposed of.
Sunil Gaur, J.
January 21, 2010
rs
Crl. M.C. Nos. 4340, 4341, 4342, 4343 of 2009 Page 5
