IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Crl. Misc. No. M-2940 of 2010 (O&M) Date of Decision: October 03, 2011 Harji Ram Chaudhary …Petitioner Versus State of Haryana and another … Respondents CORAM: HON’BLE MR. JUSTICE ALOK SINGH 1. Whether reporters of local news papers may be Allowed to see judgment? 2. To be referred to reporters or not? 3. Whether the judgment should be reported in the Digest? Present: Mr. Rakesh Dhiman, Advocate, for the petitioner. Mr. Gaurav Dhir, DAG, Haryana. Mr. Sandeep Arora, Advocate, for respondent No.2. Alok Singh, J. (Oral) Present petition is filed for quashing of Criminal Case No. 116 of 09.08.2007 – M/s Usha International Ltd. vs. M/s Amar Enterprises, pending in the Court of Additional Chief Judicial Magistrate, Gurgaon for an offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the Act). CRM M-2940 of 2010 The brief facts, inter-alia, are that complainant – respondent No.2 had preferred complaint under Section 138 of the Act on the ground that to discharge the liability of the outstanding amount, accused No.2 being the proprietor of accused no.1 company had issued an account payee cheque bearing No. 410016 dated 19.05.2007 for Rs.1,53,817/- drawn on Punjab & Sind Bank, Siliguri, in favour of the complainant; cheque was presented for encashment through the complainant’s banker i.e. City Bank N.A., Mumbai, but it was dishonoured by the UTI Bank (having tie up with Punjab & Sind Bank) vide Cheque Return Memo for the reason “Not Arranged For”; complainant had issued one notice on 26.06.2007 to the accused, however, despite of service of notice, no amount was paid by the accused within 15 days. I have heard learned counsel for the parties and perused the record. Annexure P/2 copy of the statutory notice issued/sent by the complainant to the accused would reveal that cheque issued by the accused was of Punjab & Sind Bank and same was returned vide memo dated 29.05.2007 for the reason “Not Arranged For”. Copy of reply of notice sent by the accused-petitioners dated 07.07.2007 is Annexure P/3. On being asked, learned counsel for the complainant Mr. Sandeep Arora has fairly stated that 2 CRM M-2940 of 2010 Annexure P/3 is the correct copy of the reply notice issued by the accused-petitioners to the complainant. Paragraph Nos. 4 to 6 of the reply notice (Annexure P/3) read as under:- “4. That it is stated by my client that the cheque No. 410016 dated 19.05.2007 for Rs.1,53,817/- was/is drawn on Punjab and Sind Bank, Hill Cart Road, Siliguri, however, due to the negligence of your company the said cheque was sent for clearance to a different bank that is U.T.I. Bank Ltd. Darjeeling Branch, which is not the banker of my client as such my client cannot be held responsible for dishonour of the said cheque. 5. That it is stated by my client that my client has brought this irresponsible and negligent act of your company in the knowledge of the concerned person moreover, my client has also sent by fax his statements of accounts maintained with Punjab and Sind Bank, Hill Cart Road, Branch for the month of June, 2007 wherefrom it is crystal clear that on the date as mentioned in the cheque, my client had more than sufficient balance to honour the said cheque but due to presentation of the said cheque for clearing to a wrong bank, the said cheque was dishonoured. 3 CRM M-2940 of 2010 6. That you have issued this legal notice without taking into consideration the circumstances and facts as mentioned above in paragraph 4 & 5 of this legal notice.” Perusal of the contents of paragraph Nos. 4 to 6 of the reply notice (Annexure P/3) would reveal that cheque was presented by the complainant in the UTI Bank (having tie up with Punjab & Sind Bank) and accused has specifically requested to the complainant to present the cheque afresh before the banker of the accused i.e. Punjab and Sind Bank for encashment saying in the account of the accused, sufficient amount is available for encashment of the cheque in question. Perusal of Annexure P/5, statement of account issued by Punjab and Sind Bank, Siliguri, (banker of the accused) would reveal that on 29.05.2007, the date of return of cheque by the UTI Bank, wherein cheque was wrongly presented by the complainant for encashment instead of Punjab and Sind Bank, petitioner was having sufficient amount of Rs.2,44,021.10 while cheque in question was of Rs.1,53,817/-. In the opinion of this Court, had cheque been presented for encashment in the Punjab & Sind Bank, same would have not been returned back for the reason of insufficient amount since accused-petitioner was having sufficient funds in his account. Moreover, return of the 4 CRM M-2940 of 2010 cheque by the UTI Bank for the reasons “Not Arranged For” would not amount to return of the cheque on account of insufficient amount in the account of the accused. Section 138 of the Act reads as under:- “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 prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the 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 5 CRM M-2940 of 2010 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. Explanation – For the purposes of this section, “debt or other liability” means a legal enforceable debt or other liability.” From the perusal of Section 138 of the Act, I have no hesitation to hold that if cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from the account by an agreement made with that bank, then offence can be said having been made out under Section 138 of the Act, if other requirement of Section 138 are also present. 6 CRM M-2940 of 2010 In the present case, initially cheque was not produced for encashment before the bank of the petitioner i.e. Punjab & Sind Bank and even on the request of the petitioner vide reply notice (Annexure P/3) was never presented before the Punjab & Sind Bank wherein petitioner was having sufficient amount for the encashment of the cheque, therefore, no offence can be said having been made out against the petitioner. Instead of filing the complaint, it was the duty of the complainant to produce the cheque for encashment in the Bank where petitioner was having account. In view of the above, present criminal complaint under Section 138 of the Act is not maintainable and no useful purpose would be served in keeping the same pending. Present petition is allowed. Complaint No. 116 dated 09.08.2007 stands quashed. However, complainant shall be at liberty to take such legal recourse which are available to him under the law. October 03, 2011 ( Alok Singh ) vkd Judge 7