N G NARAYANASWAMY Vs. VIJAYANAND ROADLINES LIMITED

JUDGEMENT

(1.) THE short question which calls for consideration in this petition filed under Section 482, Cr. P. C. is whether a complaint for initiating criminal proceedings against the accused for an offence under Section 138 of the Negotiable Instruments Act ("the Act" for short), is maintainable in law in the absence of a notice to the drawer of the cheque as required under Section 138 (2) of the Act.

(2.) BRIEF facts for consideration are these : The complainant presented a complaint under Section 200, Cr. P. C. r/w. Section 138 of the Act alleging that the accused has committed an offence punishable under Section 138 of the Act with a further request to order for payment of compensation out of the fine amount under Section 357, Cr. P. C. The complainant is a Limited Company carrying on business of transportation and are leading parcel carriers in Northern and Sourthern parts of India. Their office is situate at Hubli. One of the Directors of the Company is authorised by the Managing Director as its power of attorney to file this complaint. It is alleged that the accused is doing the profession of Consultancy in Licence and Marketing having his office at Madras. The accused and one of his agents by name Shri Aji Narasimhan of Bangalore have visited the complainant's office during the month of March 1994 for the purpose of discussions and to enter into an agreement for providing financial aid or assistance to the complainant's company. After prolonged discussion between the two parties, they finalised the terms and conditions and entered into an agreement for providing financial aid to the complainant. As per the said agreement, it was specifically agreed by the accused with the complainant that the accused shall advance a loan of Rs. 30 crores in the month of June, 1994 and for that the accused represented to the complainant to make payment of Rs. 36,75,000/- towards up front fees to the accused for advancing loan or financial assistance of Rs. 30 crores to the complainant. The complainant paid an amount of Rs. 36,75,000/- to the accused believing the representation of the accused by an account payee Crossed Demand Draft. But the accused did not advance the cash assistance of Rs. 30 crores as agreed upon by him within the stipulated period. Thereafter, a fresh memorandum of understanding was entered into by the parties dated 13-2-1995. Even then, the accused did not advance the loan or financial assistance as agreed. When the complainant and his representative approached the accused in person on 5-11-1996, the accused showed a cheque D/- 13-11-1996 issued by M/s. Sahodya Housing and Leasing Ltd. , which was in favour of the accused for Rs. 30 crores. The accused had promised them to settle the accounts on realisation of the said cheque. When the complainant insisted the accused to make payment of loan on the said day itself, the accused expressed his inability and thereafter agreed to arrange a cheque from M/s. Sahodaya Housing and Leasing Ltd. , issued in his favour which would be endorsed in favour of the complainant on or before 30-11-1996. Thereafter the accused issued a cheque of State Bank of Travancore, Residency Road, Bangalore, D/- 30-11-1996 for Rupees 1,50,000/- payable to the accused by M/s. Sahodaya Housing and Leasing Ltd. , by making necessary endorsement on the back of the said cheque by making an endorsement to be payable to the complainant. The accused gave a letter D/- 5-11-1996 addressing to the complainant along with the said cheque. Thus the cheque for Rs. 1,50,000/- was issued in favour of the complainant towards the liability under the Contract/agreement D/- 13-5-1994. Thereafter, the complainant presented the said cheque for collection with his banker viz. , Canara Bank, Kalasipalyam Branch, Bangalore, and the said cheque was returned to the complainant on 4-12-1996 with a debit advice D/- 4-12-1996 as unpaid due to "insufficient Funds". Thereafter the complainant got issued a legal notice through his counsel on 16-12-1996 to the accused intimating the fact of dishonour of the said cheque and further called upon the accused to make payment of Rs. 1,50,000/- being the amount of the said cheque within 15 days from the date of receipt of the said legal notice failing which the complainant would be constrained to take both civil and criminal action against him. The said legal notice came to be served upon the accused. The accused then gave reply notice D/- 2-1-1997 taking false and baseless contentions with a view to avoid the liability of the payment of Rs. 1,50,000/- to the complainant. The accused after the expiry of 15 days after the receipt of the said legal notice of the complainant has not come forward to make payment of the said amount of Rupees 1,50,000/ -. Hence, the complainant is constrained to file the complaint before the Court below.

(3.) THE learned Magistrate before whom the complaint was presented, perused the complaint and the documents produced therein and according to him a prima facie case is made out and therefore, cognizance of the offence is taken by him and recorded the sworn statement of the accused and in his opinion "there are sufficient material grounds to proceed against the accused for the offence punishable under Section 138 of the N. I. Act. " Hence ordered to register a criminal case against the accused and issued summons to the accused, the legality and correctness of which is assailed in this petition.