IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWELFTH DAY OF OCTOBER TWO THOUSAND AND NINE PRESENT HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL PETITION No.8243 OF 2009 Between: Ganesh Patkar ..... Petitioner/Accused AND 1. The Sate of Andhra Pradesh, Rep. by its Public Prosecutor, High Court of A.P., Hyderabad. 2. M/s. Lanco Hills Technology Park Pvt. Ltd. ..... Respondents The Court made the following: ORDER: This Criminal Petition, under Section 482 of the Code of Criminal Procedure, 1973, is filed by the petitioner herein to quash the proceedings in C.C.No.719 of 2007, on the file of the learned III Additional Chief Metropolitan Magistrate, City Criminal Courts, Hyderabad, presently transferred to the file of the learned XVIII Additional Chief Metropolitan Magistrate, Hyderabad, registered for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. 2. The second respondent/complainant filed the private complaint alleging as follows: The petitioner herein worked as Vice President (Architecture) in the second respondent company herein from 23.08.2006 to 25.11.2006 and he was allotted 3,650 shares @ Rs.240/- each amounting to Rs.8,76,000/- and the said amount was arranged by the second respondent company herein as per the terms and conditions of the Agreement, dated 08.11.2006. As per the said agreement, the amount is repayable in 36 equal installments @ Rs.24,333/- per month, commencing from six months after the date of allotment of shares. In the event of default in monthly repayment for any reason or the employee ceases to be in services of the company or death or in the event of contravention of any of the terms of the agreement, the second respondent company herein shall be at liberty to recall the outstanding employee advance amount. The petitioner resigned from the second respondent company on 25.11.2006. Thereafter, it is alleged that to discharge the said liability, the petitioner herein issued a cheque bearing No.543007, dated 08.11.2006, for Rs.8,76,000/-, drawn on ICICI Bank Ltd., Banjara Hills Branch, Jubilee Hills, Hyderabad, in favour of the second respondent company herein. When the cheque was presented by the second respondent company herein on 06.03.2007, it was dishonoured with an endorsement “Insufficient Funds”. After giving statutory legal notice, dated 14.03.2007, the present complaint is filed. 3. Learned counsel appearing for the petitioner herein contended that the transaction is purely of civil nature; that though the statutory legal notice, dated 14.03.2007, got issued by the second respondent company herein, it is not in accordance with Section 138 of the Negotiable Instruments Act, 1881; that the cheque in question was given towards security for allotting the shares; and therefore, the prima facie case under Section 138 of the Negotiable Instruments Act, 1881, has not been attracted. Hence, she prays to quash the same. 4. There cannot be any dispute that inherent powers under Section 482 of the Code of Criminal Procedure, 1973, can be exercised by this Court when there is an abuse of process of Court, or to secure the ends of justice, or to give effect to the orders passed under the Code. It is equally well settled that if the allegations in the complaint do not make out a prima facie case for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, then only the question of quashing the complaint arises. 5. To constitute an offence incorporated in the main enacting clause of Section 138 of the Negotiable Instruments 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. It is equally well settled that a proper notice is not given as contemplated under Section 138(b) of the Negotiable Instruments Act, 1881, then the proceedings cannot be initiated. 7. Learned counsel appearing for the petitioner herein relied upon a decision reported in Rahul Builders v. Arihant Fertilizers & Chemicals & another[1], wherein it was held thus: “an omnibus notice without specifying as to what was the amount due under the dishonoured cheque would not subserve the requirement of law. Respondent 1 was not called upon to pay the amount which was payable under the cheque issued by it. The amount which it was called upon to pay was the outstanding amounts of bills i.e. Rs. 8,72,409. The notice was to respond to the said demand.” There cannot be any dispute that an omnibus demand is made without specifying what was the amount due under the dishonoured cheque, then it is not a proper notice contemplated under Section 138(b) of the Negotiable Instruments Act, 1881. 8. The whole object of Section 138(b) of the Negotiable Instruments Act, 1881, is to give an opportunity to the accused to pay the amount due under cheque given by him. But in this case, the statutory legal notice, dated 14.03.2007, clearly disclosed that as against the advance amount of Rs.8,76,000/- given by the second respondent company herein, towards applying shares, the petitioner herein handed over the cheque bearing No.543007, dated 08.11.2006, for Rs.8,76,000/-, drawn on ICICI Bank Ltd., Banjara Hills Branch, Jubilee Hills, Hyderabad, in favour of the second respondent company herein towards discharge of his liability, and after resignation of the petitioner, when the second respondent company demanded to settle the dues, the petitioner requested the second respondent company herein to present the above mentioned cheque in March, 2007. Therefore, the petitioner herein was called upon to pay the amounts equivalent to the said cheque. Hence, a specific demand was made for payment of Rs.8,76,000/-. The cheque amount was also Rs.8,76,000/-. The cheque number was given and the purpose of giving the cheque is also given. Therefore, prima facie, the statutory legal notice, dated 14.03.2007, is a proper compliance of the Section 138(b) of the Negotiable Instruments Act, 1881. 9. Coming to the second aspect that the transaction is of civil nature, it cannot be accepted in view of the fact that when the cheque in question, prima facie, is shown to have been issued for legally enforceable debt, then the presumption under Section 139 of the Negotiable Instruments Act, 1881, can be drawn. If it is drawn, the presumption is that the cheque is given for legally enforceable debt or liability. Of course, by adducing necessary evidence in the trial Court, it can be rebutted. Admittedly, the cheque in question was dishonoured with an endorsement “Insufficient Funds”. Therefore, it cannot be said that the transaction is of civil nature. 10. Coming to the last contention that the cheque in question was given for security purpose, the same cannot be accepted in view of the fact that it is the specific case of the second respondent company herein that the cheque in question was given for discharge of the liability covered for allotting certain shares to the value of Rs.8,76,000/-. Whether the cheque in question was given for discharging the liability as contended by the second respondent company herein, or whether the cheque was given as a security as contended by the petitioner herein, are the questions of fact which are required to be decided and determined by adducing necessary evidence in the trial Court. Those disputed questions of fact cannot be decided and determined by exercising the powers under Section 482 of the Code of Criminal Procedure, 1973. Hence, there are no grounds to quash the same. 11. The Criminal Petition is devoid of merit and is accordingly dismissed. However, observations, if any, made in this order are only for the purpose of disposal of this Criminal Petition only. ______________ (K.C.BHANU, J) Dated: 12th October, 2009. KL [1] (2008) 2 Supreme Court Cases, 321