THE HON'BLE SRI JUSTICE P.S.NARAYANA Criminal Petition No.2783 of 2009 17th March, 2010 Between :- A. Rekha Bai .. Petitioner And The State of Andhra Pradesh, Rep. by its Public Prosecutor, High Court of Andhra Pradesh, Hyderabad and another .. Respondents THE HON'BLE SRI JUSTICE P.S.NARAYANA Criminal Petition No.2783 of 2009 ORDER:- Heard Sri Nagendra Reddy, the learned Counsel representing the petitioner, the learned Additional Public Prosecutor representing R.1 and Sri L.Harish, the learned Counsel representing R.2. 2. Sri Nagendra Reddy, the learned Counsel representing the petitioner would maintain that even in the light of the specific averment made that the cheque was issued for collateral guarantee as per the allegation made in the complaint since it could not attract the test of legally enforceable debt, the proceedings C.C.No.68/2008 on the file of the Judicial First Class Magistrate, Parigi, Ranga Reddy District, to be quashed. The Counsel also explained the scope and ambit of Section 138 and 142 of the Negotiable Instruments Act in this regard. 3. The learned Additional Public Prosecutor would submit that predominantly this being a question of fact, this aspect may have to be gone into at the appropriate stage and this is not a fit matter to be interfered with under Section 482 of the Criminal Procedure Code (hereinafter in short referred to as ‘the Code’ for the purpose of convenience). 4. Sri Harish, the learned Counsel representing R.2 placed strong reliance ICDS LTD. V. BEENA SHABEER AND ANOTHER[1]. The Counsel also would submit that it is no doubt true that this expression Collateral Guarantee had been used in the complaint in an elaborate sense and may be that this aspect also may have to be gone into at the appropriate stage since this question being predominantly a question of fact. 5. Heard the Counsel. 6. It is stated that the petitioner is accused in C.C.No.67/2008 on the file of the Judicial First Class Magistrate, Pargi, Ranga Reddy District. The 2nd respondent herein filed a private complkaint against the petitioner for the offence under Section 138 and 142 of the Negotiable Instruments Act. It is alleged in the complaint that the complainant and accused are friends and accused approached the complainant on 25-9-2008 for hand loan of Rs.3,00,000/- and on the same day, the complainant gave Rs.3,00,000/- to the accused and the accused issued a cheque No.217197, dt.25-9-2008 for Rs.3,00,000/- for collateral guarantee in favour of the complainant with regard to the hand loan. 7. Further it is alleged that the said cheque had been dishonoured on 8-11-2008 for the reason of insufficient funds and thereafter the complainant issued notice on 11-11-2008 and the same was served on the accused on 13-11-2008 but the accused failed to pay the amount within 15 days from the date of receipt of the notice. 8. Further specific stand had been taken that the contents of the complaint do not constitute the offence under Section 138 of the Negotiable Instruments Act. As per the complaint and notice, the cheque had been issued towards collateral security. Once the cheque is issued towards collateral security, the offence under Section 138 of the N.I.Act is not made out as the cheque has not been issued towards discharge of legal enforceable debt. Even, if the entire allegations in the complaint are considered as they are true, there is no possibility to conduct the accused under Section 138 of the N.I.Act. Therefore, the further proceedings in the said C.C., would abuse the process of law. Hence, quashing of the proceedings in C.C.No.68/2008 on the file of the Judicial First Class Magistrate, Pargi, had been prayed for. 9. The learned Counsel representing R.2-complainant placed strong reliance on ICDS LTD.’s case (referred 1 supra) wherein the Apex Court at paras 10 and 11 observed as hereunder:- “The language, however, has been rather specific as regards the intent of the legislature. The commencement of the Section stands with the words "where any cheque". The above noted three words are of extreme significance, in particular, by reason of the user of the word "any" the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any of debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment. The issue as regards the co-extensive liability of the guarantor and the principal debtor, in our view, is totally out of the purview of Section 138 of the Act, neither the same calls for any discussion therein. The language of the Statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embagro in the matter of application of the provisions of Section 138 of the Act. 'Any cheque' and 'other liability' are the two key expressions which stands as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the Statute. Any contra interpretation would defeat the intent of the legislature. The High Court, it seems, got carried away by the issue of guarantee and guarantor's liability and thus has overlooked the true intent and purport of Section 138 of the Act. The judgments recorded in the order of the High Court do not have any relevance in the contextual facts and the same thus does not lend any assistance to the contentions raised by the respondents.” 10. The defence, if ultimately establish, may be a ground for acquittal, but however this Court is satisfied that predominantly this being a question of fact, at this stage, it may not be just and proper to interfere with under Section 482 of the Code. 11. With the above observation, the Criminal Petition shall stand dismissed. _____________________ Justice P.S.Narayana 17th March, 2010 smr [1] (2002) 6 SCC 426