THE HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL PETITION No. 2535 of 2008 ORDER: 1. This Criminal Petition is filed under Section 482 Cr.P.C. to quash all further proceedings in C.C. No. 4634 of 2006 on the file of the I Additional Chief Metropolitan Magistrate, City Criminal Courts, Nampally, Hyderabad. 2. It is alleged in the complaint that A.1 to A.5 ordered goods for purchase from the complainant company. A.6 is dealer of A.1 firm. A.1 to A.5, after receipt of the goods, resold the same to A.6, and towards sale consideration of goods purchased, A.1 to A.5 issued cheque under the signature of A.6, in the name of the complainant, and A.1 to A.6 promised and undertook to honour the same. But, when the complainant presented the cheque, it was dishonoured with endorsement ‘account closed’. Hence, the complaint. 3. Heard the learned counsel for the petitioners. None appears for the first respondent inspite of service of notice. 4. There cannot be any dispute that inherent powers under Section 482 Cr.P.C. can be exercised when there is an abuse of process of Court or to secure ends of justice or to give effect to any order under the Code. When the allegations in the charge sheet do not make a prima facie case for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, then only the question of quashing the same would arise. 5. To constitute an offence incorporated in the main enacting clause of Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘the Act’) the following three conditions have to be established: 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 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. 6. The petitioners herein are A.1 to A.4 in the complaint. Even as seen from the allegations in the complaint, A.1 to A.5 received the goods supplied by the complainant. There were no business contracts between A.6 and the complainant. A.6 was not supplied any goods by the complainant. The allegation is that A.1 to A.5 sold goods to A.6, and that A.6, in turn, issued a cheque in favour of the complainant. Therefore, there is no existing legal liability between A.6 and the complainant. The liability to pay the amount, if any, on the allegations in the complaint, is on A.1 to A.5, to whom the goods were supplied by the complainant. Goods were not supplied to A.6. The cheque was not issued by A.1 to A.5 to the complainant. When there is no existing legal liability between A.1 to A5 and the complainant, complaint for an offence punishable under Section 138 of the Act is not maintainable against them. The complainant cannot file a suit to recover any amount against A.6, as, admittedly, he had not been supplied any goods. There is no allegation that in pursuance of the directions given by A.1 to A.5 and after acknowledging the goods from them, A.6 issued the cheque to the complainant. Mere issuance of cheque does not amount to an offence punishable under the Act, unless it is shown that it is issued for legally enforceable debt. The liability, if any, on the part of A.6 is to pay the amount to A.1 to A.5 from whom he purchased the goods. Therefore, the allegations in the complaint, even if taken as true and correct, they do not make out a prima facie case for the offence punishable under Section 138 of the Act against the petitioners and hence, continuation of the impugned proceedings against the petitioners is nothing but abuse of process of Court. 7. The Criminal Petition is, accordingly, allowed quashing the proceedings in C.C. No. 4634 of 2006 on the file of the I Additional Chief Metropolitan Magistrate, City Criminal Courts, Nampally, Hyderabad, insofar as the petitioners are concerned. ---------------- 8.7.2010 DRK THE HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL PETITION No. 2535 OF 2008 Date: 8.7.2010 Between: Harita Raksha Enterprises & others …Petitioners And M/s. Northern Minerals Ltd. & another …Respondents THE HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL PETITION No. 2535 of 2008 8.7.2010