RAM SINGH AMARSINGH Vs. KANDASAMAY TEXTILES AND CO

JUDGEMENT

(1.) The accused in C. C. No. 24 of 1993 on the file of the Chief judicial Magistrate, Salem have filed this petition under Sec. 482, Cr1. P. C. praying to call for the records in the said proceedings and quash the same. Short facts are: The respondent has filed a private complaint against the accused/petitioners for an offence under Sec. 138 of the Negotiable instruments Act (which I shall here after refer to as the Act). The allegations in it are briefly as follows: The first accused is the partnership firm in which accused 2 to 5 are the partners and they are jointly looking after the affairs of the 1st accused firm. Accused 2 to 5 wanted to have a loan facility with the complainant. So, they jointly executed a letter on 19. 5. 1992 in favour of the complainant agreeing to bind themselves jointly and severally for any of the borrowing to be made by them from the complainant. In pursuance of the said guarantee letter, on 1. 9. 1992, the 2nd accused representing others, discounted their firm cheque drawn in favour of the complainant under cheque dated 24. 9. 1992 for Rs. I ,00,000 and received the value of the cheque. The 2nd accused has also executed a cheque discount from on 1. 9. 1992 itself and paid a cheque discount commission charges of Rs. 1,250. The 2nd accused has discounted the above said cheque on their firm by representing the firm and its partners. Only on his assurance and the belief that all the accused will see that the cheque is honoured as assured by itlem all, the complainant paid the value of the cheque by way of a separate current self cheque of the complainant. On 24. 9. 1992, accused 2 and 3 requested the complainant not to present the cheque on 24. 9. 1992 and instructed to present it during the last week of November, 1992. The complainant presented the cheque on 26. 11. 1992 for collection. It was returned for the reason Funds Insufficient along with the memo dated 26. 11. 1992. The complainant received back the cheque on 27. 1 1. 1992 and issued statutory notice to the accused on 8. 12. 1992. All the accused had received the said notice. They have failed to pay the value of cheque within 15 days from the date of receipt of the notice. Hence the complaint.

(2.) Mr. K. Sengottiyan, learned counsel appearing for the petitioner, would submit that the cheque was not issued for the discharge of legally enforceable debtor liability but was issued for getting a loan and so, dishonour of such a cheque for the reason Funds Insufficient cannot give rise to an offence under Sec. 138 of the Act. Per Contra, Mr. Munirathnam, learned counsel appearing for the respondent, would submit that cheque was dated 24. 9. 1992 and on that date there was liability payable by the accused to the complainant and so, it must be taken that the cheque was issued for the discharge of a legally enforceable debt or liability and that would bring the case within the purview of Sec. 138 of the Act. He would add that the cheque was issued for the discharge of a legally enforceable debt and hence looking the case from any angle, it can form the basis for an offence under Sec. 138 of the Act.

(3.) I have carefully considered the submission made by the rival counsels. To consider the said submissions, Paragraphs 4 and 5 of the complaint need extraction and they read as follows: (4) In pursuance of the said guarantee letter, apart from other transactions, on 1. 9. 1992, the 2nd accused representing the others, discounted their firm cheque drawn in favour of the complainant, under cheque dated 24. 9. 1992 for Rs. 1,00,000 (Rupees one lakh only) bearing Cheque No. 651767 to be drawn on M/s. City Union Bank Limited, Salem-I, and received the valuer of cheque. The second accused has also executed a cheque discount form on 1. 9. 1992. Itself and paid a cheque discount commission charges of Rs. 1 ,250. (5) The 2nd accused has discounted the above cheque of their firm by representing the firm and its partners, assuring to honour the cheque, on the date mentioned therein. Only on his assurance and the belief that all the accused will see that the cheque is honoured, as assured by them all, the complainant paid the value of cheque byway of separate current self cheque of the complainant. Hence the subject cheque was issued by the accused to the complainant, towards the amount due to be paid to the complainant.