IN THE HIGH COURT OF JUDICATURE AT PATNA Criminal Miscellaneous No.18025 of 2008 Shyamdeo Prasad Singh, son of Sri Alakhdeo Singh, resident of village-Telhari, P.S. Rupow in the district of Nawadah. Presently residing in Ward No.2, Devi Mandap Road, Jhumari Tilaiya, P.S. Tilaiya in the district of Kodarma (Jharkhand). ………………………………………………………...Petitioner. Versus 1. The State Of Bihar. 2. Shyam Kumar Singh, son of Sri Ram Sagar Singh, resident of Village-Bakhtiarpur, P.S. Bakhtiarpur in the district of Patna. ……………………………………………Opposite Parties. ---------------------------------- For the Petitioner : Mr. Akhileshwar Prasad Singh, Sr. Advocate. For the State : Mr. Jharkhandi Upadhyay, A.P.P. For O.P. No.2 : Mr. Dinesh Jha, Advocate. ------------------------------------- O R D E R 7. 14.10.2011. The petitioner has filed this application, under Section 482 of the Code of Criminal Procedure, for quashing the order dated 19th of February, 2008 passed by Sri A.K. Srivastava, Sub Divisional Judicial Magistrate, Barh, Patna, in Complaint Case No.74(C) of 2007, whereby the petitioner has been summoned under Section 204 of the Code of Criminal Procedure, on 2 inquiry, finding prima facie case under Section 406 of the Indian Penal Code and Section 138 of the Negotiable Instruments Act, 1881. 2. The facts leading to this application is that opposite party no.2, Shyam Kumar Singh, filed the complaint petition, numbered as Complaint Case No.74 (C) of 2007 with the contention that the accused- petitioner, Shyamdeo Prasad Singh, who was engaged in transport business, was on friendly term with him. The accused-petitioner asked the complainant-opposite party no.2 for investing Rs.3,00,000/- in his business and promised to return back the principal amount Rs.3,00,000/- to him in a short time with 10% of the earning incurred by investing the aforesaid money. Thereafter, the complainant-opposite party no.2 gave Rs.3,00,000/- to the accused-petitioner in cash on 10th of April, 2004 at his house in Village P.S.-Bakhtiarpur, District-Patna. After expiry of one year from the date of payment of money Rs.3,00,000/- to the accused- petitioner, the complainant-opposite party no.2 started making demand of the aforesaid principal amount alongwith 10% of the earning from the business of that 3 amount but the accused-petitioner gave evasive reply. On great persuasion, the accused-petitioner gave a cheque of Rs.1,00,000/- to the complainant-opposite party no.2 drawn on Standard Chartered Bank, Branch M-1, South Extension, Par.II, New Delhi on 28.12.2006 at the house of the complainant-opposite party no.2 and also promised to pay the remaining amount within few months. On 28.12.2006, the complainant-opposite party no.2 deposited the aforesaid cheque bearing no.311975 at Dena Bank, Bakhtiarpur Branch, Patna, for credit in his Account No.7222 but the same was returned unpaid on 12.1.2007 with an endorsement that there was insufficient fund in the account of the accused-petitioner to honour the cheque. Thereafter, the complainant- opposite party no.2 made oral request to the accused- petitioner to give the amount of the cheque and also sent a legal notice through his Advocate, Sri Dinesh Jha, on 3.2.2007 to the petitioner but all went in vain. As such, the accused-petitioner did not make the payment to the complainant-opposite party no.2 as given to him by the complainant-opposite party no.2 and has committed fraud and deception by misappropriating Rs.3,00,000/- of the 4 complainant-opposite party no.2. 3. After filing of the complaint petition by the complainant-opposite party no.2, Shyam Kumar Singh, on inquiry under Section 202 of the Code of Criminal Procedure, the court of Sri A.K. Srivastava, Sub Divisional Judicial Magistrate, Barh, Patna, has summoned the accused-petitioner, finding prima facie case under Section 406 of the Indian Penal Code and Section 138 of the Negotiable Instruments Act, 1881. 4. Learned counsel appearing on behalf of the petitioner submits that if the prosecution story is accepted to be true on its face value, no offence under Section 406 of the Indian Penal Code is made out as the allegation is of simple refusing to return the money as given by the complainant-opposite party no.2 to the accused- petitioner. It has also been submitted that, in fact, prior to the date of issuance of the cheque, the cheque-book of the petitioner was lost for which a report was registered in Karolbagh Police Station giving the details of the account number and the name of the Bank. As such, in case of missing/loss of the cheque, the offence under Section 138 of the Negotiable Instruments Act, 1881, 5 will not make out against the accused-petitioner and placed reliance on a decision of the Apex Court in the case of Raj Kumar Khurana Vs. State of (NCT of Delhi) and another [(2009) 6 SCC 72]. 5. On bare perusal of the complaint petition (Annexure-„1‟ to this application), it appears that the allegation of the complainant-opposite party no.2 is that he had given Rs.3,00,000/- to the accused-petitioner to invest the same in his transport business on an agreement that, that the same will be returned with 10% of the earning incurred on that amount but on several requests, made after expiry of one year by the complainant- opposite party no.2, the accused-petitioner gave a Cheque of Rs.1,00,000/- to the complainant-opposite party no.2 with an assurance that the remaining amount would be returned very soon, on presentation of the cheque by him for credit in his account, the same was dishonoured due to insufficient fund in the account of the accused- petitioner. 6. The impugned order dated 19.2.2008 discloses that on perusal of the complaint petition and the statements of the five witnesses as examined in course of 6 inquiry under Section 202 of the Code of Criminal Procedure, the learned Sub Divisional Judicial Magistrate, summoned the accused-petitioner finding prima facie case under Section 406 of the Indian Penal Code and Section 138 of the Negotiable Instruments Act, 1881. Section 406 of the Indian Penal Code relates to the punishment for criminal breach of trust and the criminal breach of trust is defined under Section 405 of the Indian Penal Code. Section 138 of the Negotiable Instruments Act, 1881 relates to the dishonour of cheque for insufficiency, etc., of funds in the account. Section 405 of the Indian Penal Code and Section 138 of the Negotiable Instruments Act are read as under: “405. Criminal breach of trust.- Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses of disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits “criminal breach of trust”. 7 138. Dishonour of cheque for insufficiency, etc, of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudiced to any other provision of this Act, be punished with imprisonment for a term which may extend to [two] year, or with fine which may extend to twice the amount of cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank 8 regarding the return of the cheque as unpaid; and (c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.” 7. From the reading of the averments made in the complaint petition in their entirety and accepting the allegations to be true, it appears that there is no case of the accused-petitioner of entrustment of the property and misusing the same dishonestly in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied and the case as alleged in the complaint petition appears to be breach of contract by the petitioner, which is of civil in nature. As such, the offence under Section 406 of the Indian Penal Code is not made out against the accused-petitioner. 8. In the case of Raj Kumar Khurana (Supra), the Hon‟ble Apext Court has held that Section 138 of the Negotiable Instruments act creates a legal fiction of deemed commission of offence when a cheque 9 is dishonoured either due to insufficiency of funds or the amount mentioned in the cheque exceeds the amount arranged to be paid from a particular account by an agreement with the Bank. The fiction does not extend to lost cheque. On reading of the provisions of Section 138 of the Negotiable Instruments Act, 1881, it is clear that dishonour of the cheque by the Bank will constitute an offence under Section 138 of the Negotiable Instruments Act, 1881, when the amount standing in the credit of that account is insufficient to honour the cheque or the cheque amount exceeds to amount arranged to be paid from that account. From the averment of the complaint petition, it appears that there is specific case that the cheque of Rs.1,00,000/- issued by the petitioner was dishonoured by the Bank with an endorsement that there was insufficient fund in the account of the petitioner and not on the ground of „cheque reported lost by the drawer‟. As such, the decision of the Apex Court in case of Raj Kumar Khurana (Supra) will not be applicable in the facts and circumstances of the present case. 9. In the facts and the circumstances of the case, 10 the impugned order summoning the accused-petitioner finding prima facie case under Section 406 of the Indian Penal Code appears to be abuse of the process of the court but prima facie the offence under Section 138 of the Negotiable Instruments Act, 1881, appears to be made out against the accused-petitioner. 10. Accordingly, the impugned order dated 19.2.2008 passed by Sri A.K. Srivastava, Sub Divisional Judicial Magistrate, Barh, Patna, summoning the accused-petitioner under Section 406 of the Indian Penal Code in Complaint Case No.74(C) of 2007 is hereby quashed and the application is allowed to that extent only. So far as summoning the accused-petitioner for the offence under Section 138 of the Negotiable Instruments Act, 1881 in the aforesaid complaint case is concerned, the trial will continue against the accused- petitioner in that regard. P.S. (Rajendra Kumar Mishra, J)