Boddu Jhansi Rani, vs The State Of Telangana,
2023 Latest Caselaw 1584 Tel

      HIGH COURT FOR THE STATE OF TELANGANA
                      AT HYDERABAD
                           *****
           Criminal Petition No.11646 OF 2022

Between:

Boddu Jhansi Rani                         ... Petitioner

                          And
The State of Telangana,
rep. by its Public Prosecutor,
High Court for the State of Telangana,
Hyderabad & another                       ... Respondents


DATE OF JUDGMENT PRONOUNCED:             12.04.2023

Submitted for approval.

THE HON'BLE SRI JUSTICE K.SURENDER
 1  Whether Reporters of Local
    newspapers may be allowed to   Yes/No
    see the Judgments?

 2    Whether the copies of judgment
      may be marked to Law                   Yes/No
      Reporters/Journals

 3    Whether Their
      Ladyship/Lordship wish to see          Yes/No
      the fair copy of the Judgment?




                                    ___________________
                                     K. SURENDER, J
                                   2




           * THE HON'BLE SRI JUSTICE K. SURENDER
                     + CRL.P. No. 11646 of 2022

% Dated 12.04.2023

# Boddu Jhansi Rami                            ... Petitioner

                            And
$ The State of Telangana,
rep. by its Public Prosecutor,
High Court for the State of Telangana,
Hyderabad & another                            ... Respondents


! Counsel for the Petitioner: Sri. Penjuri Venugopal


^ Counsel for the Respondents: Sri S.Sudershan

                                  Additional Public Prosecutor for R1


>HEAD NOTE:

? Cases referred
                                  3


         THE HONOURABLE SRI JUSTICE K.SURENDER

            CRIMINAL PETITION No.11646 OF 2022

ORDER:

1. This Criminal Petition is filed to quash the proceedings in

C.C.No.1551 of 2019 on the file of XIV Additional Judge-cum-XVIII

Additional Chief Metropolitan Magistrate at Secunderabad for the

offences under Section 138 of the Negotiable Instruments Act.

2. The petitioner is questioning the prosecution under Section

138 of the Negotiable Instruments Act for return of the cheque

presented after three months from the date on the cheque.

3. The case of the 2nd respondent is that the cheque bearing

No.029221 dated 21.09.2018 for Rs.9.00 lakhs was issued. The

said cheque was presented for clearance on 27.12.2018 in the bank

where the 2nd respondent was maintaining his account and same

was returned unpaid on the ground of 'insufficient funds'.

4. Aggrieved by the said return of the cheque, notice was issued

and thereafter, for the reason of not paying amount covered by the

cheque, complaint was filed.

5. The only ground raised by the learned counsel for the

petitioner is that the cheque is dated 21.09.2018, however, the said

cheque was presented on 27.12.2018, which is beyond the validity

period of three months of the cheque. For the said reason, the

prosecution cannot be maintained against the petitioner/accused.

He relied on the judgment of the Hon'ble Supreme Court in the

case of Shri Ishar Alloy Steels Ltd., v. Jayaswals Neco Limited in

Appeal (crl.)219 of 2001 arising out of Special Leave Petition (Crl.)

3854 of 2000, dated 22.02.2001, wherein, the Hon'ble Supreme

Court while dealing with the case under Section 138 of the Act,

wherein the cheque was presented beyond six months. It was held

that the criminal Court had no jurisdiction to issue process to the

appellant and accordingly set aside the criminal proceedings.

6. On the other hand, learned counsel appearing for the 2nd

respondent would submit that the cheque is not returned for the

reason of not being valid but specific reason was given that funds

were insufficient. Once the cheque is returned on the ground of

insufficient funds, the ingredients required to be satisfied under

Section 138 of the Act are made out and accordingly, the

prosecution can be maintained. He also submits that the issues

raised by the accused can only be decided during the course of trial

and proceedings cannot be quashed under Section 482 of Cr.P.C.

7. It is not in dispute that the subject cheque was presented

beyond the three month period of the date of the cheque. The

Reserve Bank of India had issued notification on 04.11.2011 signed

by the Chief General Manager in-Charge. The said notification was

issued in exercise of the powers conferred by Section 35A of the

Banking Regulation Act, 1949 and accordingly directed the Banks

not to make payment of the cheques/drafts/pay order/bankers

cheque if the cheques are presented beyond the period of three

months from the date of such instruments.

Section 35A in BANKING REGULATION ACT,1949 reads as follows:

[ 35A Power of the Reserve Bank to give directions. -- Where the Reserve Bank is satisfied that-- in the 178 [public interest]; or 179 [ in the interest of banking policy; or] to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or to secure the proper management of any banking company generally, it is necessary to issue directions to banking companies generally or to any banking company in particular, it may, from time to time, issue such directions as it deems fit, and the banking companies or the banking company, as the case may be, shall be bound to comply with such directions. The Reserve Bank may, on representation made to it or on its own motion, modify or cancel any direction issued under sub-section (1), and in so modifying or cancelling any direction may impose such conditions as it thinks fit, subject to which the modification or cancellation shall have effect.]

8. Under Section 138-A of N I Act, it is mentioned that the

cheque should have been presented to the Bank within a period of

six months from the date on which it is drawn or within the period

of validity. Section 35-A of the Banking Regulation Act, 1949

confers powers to the Reserve Bank for giving directions in the

interest of public or banking policy. Accordingly directions were

issued that the Banks should not make payment of the cheques

which are presented beyond the period of three months from the

date of such instrument.

9. Section 138-A of the Negotiable Instruments Act deals with

two contingencies, firstly, the cheque being presented within a

period of six months and the secondly, within the period of its

validity whichever is earlier. By virtue of the notification of the

Reserve Bank of India, the period of validity would be three months

and the cheque should have been presented within a period of

three months. The Bank has committed an error in entertaining the

cheque and giving memo stating that the cheque was returned for

the reason of 'insufficient funds'. It is the specific direction of the

Reserve Bank of India that the Banks should not entertain the

cheque beyond the period of three months which had to be

scrupulously followed by the Bank and should have returned the

cheque on the ground of being stale or invalid.

10. The basis for prosecution is the return of the cheque which

was presented beyond the period of its validity. Applying the

judgment reported in Shri Ishar Alloy Steels Ltd., v. Jayaswals Neco

Limited's case (supra), the Criminal Court does not have jurisdiction to

proceed with the trial of the petitioner.

11. In the result, the proceedings against the petitioner in

C.C.No.1551 of 2019 on the file of XIV Additional Judge-cum-XVIII

Additional Chief Metropolitan Magistrate at Secunderabad, are

hereby quashed.

12. Accordingly, the Criminal Petition is allowed. Consequently,

miscellaneous applications, if any, shall stand closed.

_________________ K.SURENDER, J Date: 12.04.2023 Note: LR copy to be marked.

B/o.kvs

THE HON'BLE SRI JUSTICE K.SURENDER

CRIMINAL PETITION No.11646 OF 2023

Dt.12.04.2023

kvs