1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Crl. Misc. No. 216-M of 2008 Date of Decision: 23.4.2008 *** M/s New Bansal Poultry Farm Etc. .. Petitioners Vs. Punjab Financial Corporation. .. Respondent. CORAM: HON'BLE MR. JUSTICE ARVIND KUMAR, Present:- Mr. Kapil Aggarwal, Advocate for the petitioners. Mr. G.S. Gill, Advocate for the respondent. *** ARVIND KUMAR, J. Through the present petition under Section 482 Cr.P.C., the petitioners are seeking quashing of complaint dated 10.8.2005 (Annexure P/1) filed by respondent Corporation against them under Sections 138 of the Negotiable Instruments Act (for brevity, the Act) as also the order dated 10.12.2007 (Annexure P-2) passed by Chief Judicial Magistrate, Sangrur by dint of which the petitioners have been served with notice of accusation (Annexure P2/A) for the aforesaid offence. It emerges out from record that the respondent filed a complaint in the Court containing the allegations that petitioners No.1 to 3 took a loan from the respondent financial Corporation and in order to discharge their liability, petitioner No.4, who is the sister concern of petitioner No.1 firm, issued a cheque bearing No. 054821 dated 15.6.2005 for an amount of Rs.2,34,000/- in favour of respondent Corporation, which on presentation was dishonoured on account of “insufficient funds” maintained by the account holder. Accordingly, notice was issued to petitioners No.1 firm asking him to make the payment and despite that, except an amount of Rs.80,000/-, the payment was not made and thus, the complaint was 2 instituted. In response to the notice of motion, the respondent Corporation made representation through its counsel. I have heard learned counsel for the parties and have also gone through the paper-book carefully. It has been contended that the cheque in question has not been issued by petitioners No.1 to 3 and thus, no criminal liability can be fastened upon them. So far as petitioner No.4, who has issued the cheque is concerned, since he was not issued any mandatory notice, therefore, prosecution launched against him is bad. Even otherwise, the entire payment has already been made by him to the respondent Corporation. The arguments advanced on behalf of petitioners are justified. Section 138 of the Act was enacted to punish unscrupulous drawers of cheques who, though purport to discharge their liability by issuing cheque, have no intention of really doing so. Apart from civil liability, criminal liability is sought to be imposed by the said provision on such unscrupulous drawer of the cheque. However, with a view to avert unnecessary prosecution of an honest drawer of the cheque and with a view to give an opportunity to him to make amends, clause (b) of the proviso has been enacted according to which the payee or the holder of the cheque in due course is required to give a written notice to the drawer of the cheque within a period of thirty days from the receipt of information from the bank regarding the return of the cheque as unpaid. Further under clause (c) of the Act ibid provides fifteen days time from the date of receipt of the notice to make the payment and only if he fails to make the payment, a complaint may be filed against him. The observance of stipulations in clause (b) and its aftermath in clause (c) being a pre-condition for invoking Section 138 of the Act, giving a notice to the drawer before filing complaint under Section 138 of the Act is a mandatory requirement. In the instant case what goes undisputed is that the cheque in question was not issued by petitioners No.1 to 3 and only to discharge the liability to some extent of the loan facility availed by petitioners No.1 to 3, petitioner No.4 issued the cheque in question being the sister concern of petitioner No.1 firm. It is also not in dispute that though the cheque was issued by petitioner No.4, the notice calling upon to make the payment of 3 the dishonoured cheque was issued in the name of petitioner No.1 firm. It is nowhere the case of respondent-Corporation that petitioner No.4 was ever served with notice required under Clause (c) of proviso to Section 138 of the Act. Thus, in the circumstances, this Court has no hesitation to say that the mandatory notice was not served upon petitioner No.4 as required under Section 138(c) of the Act and accordingly to avoid prosecution, the drawer can make payment within 15 days of receipt of summons from the Court, as has been held by the Hon'ble Apex Court in the case of C.C. Alavi Haji Vs. Palapetty Muhammed 2007(3) RCR (Criminal) 185. It is elicited from the record that up to 24.1.2006 the entire payment of the cheque in dispute was made to respondent Corporation i.e. Rs.80,000/- on 20.7.2005 and Rs. 1,54,000/- on 24.1.2006 as is evident from Annexures P-4/A and P-5 i.e. receipts issued by respondent Corporation, which fact itself speaks about the genuineness of the drawer. In the case of D.Vinod Shivappa Vs. Nanda Belliappa 2006(3) RCR (Criminal) 145, the Hon'ble Apex Court observed as follows:- “One can also conceive of cases where a well intentioned drawer may have inadvertently missed to make necessary arrangements for reasons beyond his control, even though he genuinely intended to honour the cheque drawn by him. The law treats such lapses induced by inadvertence or negligence to be pardonable, provided the drawer after notice makes amends and pays the amount within the prescribed period. It is for this reason that clause (c) of proviso to Section 138 provides that the section shall not apply unless the drawer of the cheque fails to make the payment within 15 days of the receipt of the said notice. To repeat, the proviso is meant to protect honest drawers whose cheques may have been dishonoured for the fault of others, or who may have genuinely wanted to fulfil their promise but on account of inadvertence or negligence failed to make necessary arrangements for the payment of the cheque. The proviso is not meant to protect unscrupulous drawers who never 4 intended to honour the cheques issued by them, it being a part of their modus operandi to cheat unsuspecting persons.” In view of the discussion above, the continuance of prosecution against the petitioners is nothing but an abuse of process and there is no impediment to exercise the inherent powers under Section 482 Cr.P.C. and thereby to quash the impugned complaint and subsequent proceedings thereto against the petitioners. It is ordered accordingly. The petition stands allowed accordingly. (ARVIND KUMAR) JUDGE April 23,2008 Jiten