MODERN DENIM LIMITED Vs. LUCAS TVS LIMITED

JUDGEMENT

(1.) THE petitioners who are accused Nos. 1 to 10 (in Crl. O. P. No. 2983 of1998) and 1 to 11 (in Crl. O. P. No. 2984 of 1998) have filed these petitions under section 482 of the Criminal Procedure Code, 1973, to quash the proceedings in C. C. No. 7080 and 7081 of 1997, respectively, on the file of the 18th Metropolitan Magistrate, Saidapet, Chennai. THE first petitioner represented by the second petitioner had availed of a grant of an intercorporate deposit on short-term basis to the tune of Rs. 2 crores on March 3, 1997, and the first petitioner executed two promissory notes dated March 3, 1997, each for Rs. 1 crore undertaking to repay the said sum with interest at the rate of 20 per cent. per annum within 60 days, i.e., by May 2, 1997. THE first accused also issued cheques dated May 2, 1997, for the said sum. As the amount was not paid in time, the first petitioner requested for extension of time and issued cheques bearing Nos. 138822 and 138934 dated July 31, 1997, for the said sum. THE second petitioner executed a personal guarantee and security of shares worth Rs. 2 crores. On the basis of those documents, the respondent extended the period of loans till July 31, 1997. On July 24, 1997, the first accused sent a letter requesting the complainant not to present the cheques on July 31, 1997, despite which the cheques had been presented by the complainant on July 31, 1997, in the Bank of Baroda, Alwarpet, Chennai, and the cheques were returned on August 1, 1997, with the endorsement "payment stopped by drawer". THE complainant issued a notice dated August 5, 1997, and the same has been returned unserved with the endorsement "refused" on August 12, 1997.

(2.) THEREAFTER the complainant has preferred these complaints under section 138 of the Negotiable Instruments Act, which were taken in C. C. Nos. 7080 and 7081 of 1997 by the learned 18th Metropolitan Magistrate, Saidapet, Chennai.The petitioners have raised five grounds for quashing the said proceedings. The respondent/complainant has filed counter refuting those grounds. The major grounds of challenge are :

(3.) THE real meaning conveyed by the said decision in Electronics Trade and Technology Development Corporation Ltd.'s case is that instruction for 'stoppage of payment" amounts to dishonour within the meaning of section 138 of the Negotiable Instruments Act and the same was succinctly pointed out by their Lordships in the case of K. K. Sidharthan's case. THErefore, the view expressed by this court in Mubarak Nisha's case 1996 (88) CC 172; is not in consonance with the view expressed by their Lordships of the Supreme Court. When their Lordships of the Supreme Court have clearly held that instruction for 'stoppage of payment" would amount to dishonour within the meaning of section 138 of the said Act, no different interpretation can be given to the said decision in Electronics Trade and Technology Development Corporation Ltd.'s case.