BHASKAR FERTILIZERS Vs. DINKAL AGRO CHEMICALS P LIMITED

JUDGEMENT

(1.) The petitioners are the accused, the 1st petitioner is a company and the 2nd petitioner is its proprietor and the respondent is the complainant, on whose complaint, the learned IVth Metropolitan Magistrate, Hyderabad, has taken cognizance of the of the offence under Section 138 of Negotiable Instruments Act, 1881 (for short, 'The Act') in C.C. No. 567 of 1993. The petitioners approached this Court to quash the proceedings under Section 482 Cri.P.C. on two grounds; (1) that the allegations in the complaint do not constitute the offence u/Ss. 138 and 142 of the Act, since the cheque was returned unpaid for the reason of "stop payment by the drawer;" and (2) that the cheque was not issued towards a pre-existing debt. It is contended by the counsel for the petitioners that the offence U\Section 138 of the Act, can be fastened on the petitioners only if there was prior debt and that the cheque was returned by the bank on the ground of insufficiency of funds or on the ground of exceeding the limits permitted by the bank, and that the cheque having been returned only on the ground of stop payment ordered by the petitioners, no penal liability is attracted under Section 138 of the Act.

(2.) The learned counsel for the respondent, controverting the above contentions, contended that the complaint contains the allegations necessary to make out the offence under Section 138 of the Act, that the endorsement of "stop payment" can be for several reasons and the possibility of insufficient funds in the account of the petitioner could not be eliminated and in fact the cheque was returned for insufficiency of funds in the account of the petitioners. Several decisions have been cited in support of the rival contentions, which will be referred to presently.

(3.) Before proceeding further, it is well to remember the amplitude of the enquiry in the exercise of this Court's jurisdiction under Section 482 Cr.P.C. One of the guidelines in the case R. P. Kapur v. State of Punjab, AIR 1960 SC 866 : (1960 Cri LJ 1239), a classic case on the point, is : (Para 6)