INTECH NET LIMITED Vs. STATE OF A P

JUDGEMENT

(1.) Crl.P.No.2591 of 2004 is filed to quash the proceedings in C.C.No.1059 of 2004 pending on the file of XVII Metropolitan Magistrate, Hyderabad. Whereas, Crl.P.No.4523 of 2004 is filed to quash the proceedings in C.C.No.843 of 2004 pending on the file of V Metropolitan Magistrate, Hyderabad. In both the C.Cs. proceedings were initiated against the petitioners for the offence punishable under Section 138 of Negotiable Instruments Act.

(2.) Since the parties in both the petitions are same and as the issue involved in both the petitions is common, they are heard together and are being disposed of by this common order. In these two petitions, a short question, but important, that arises for consideration is whether a self cheque, if dishonoured, will attract the offence under Section 138 of the Negotiable Instruments Act (for short 'the Act'). The petitioners are accused 1 to 4 and the second respondent is the de facto complainant in both the petitions. A.1 is M/s.Intech Net Limited and A.2 to A.4 are its Directors. In the complaint, the secomd respondent alleged that the petitioners approached him, expressed their personal difficulties and sought for financial assistance to a tune of Rs.5,00,000/- with a promise that A.2 to A.4 are responsible for the loan and that the loan would be repaid within a short period. Thereafter, on the demand made by the complainunt, the accused have issued two cheques bearing Nos.006870 and 006871 dated 27.8.2003 and 28.8.2003 for Rs.2,50,000/- each drawn on Global Trust Bank Limited, Jubilee Hills branch, Hyderabad towards repayment of the amount taken by them. When the complainant presented the said cheques with the accused banker for encashment, the same were returned by the banker informing that there were no sufficient funds in the account with a further information that as they are self cheques, they would be returned across the counter and no written endorsement would be given regarding insufficiency of funds. Hence, the complainant issued statutory notice on 20.2.2004 and the same was received by the accused on 21.2.2004. As the accused did not make the payment covered under the bounced cheques within the stipulated time, the complainant initiated the proceedings under the Act. Cheque No.006871, dated 28.8.2003 is the subject matter of C.C.No.1059 of 2004 on the file of XVII Metropolitan Magistrate and Cheque No.006870 is the subject matter in C.C.No.843 of 2004 on the file of V Metropolitan Magistrate, Hyderabad.

(3.) It is contended by the learned counsel for the petitioners- accused that since the cheques are self-cheques, there is no evidence about their presentation to the bank. It is contended that to attract the provisions of Section 138 of the Act, (1) it has to be shown that the cheque should be drawn on another person; (2) it has also to be shown that it was issued towards discharge of legally enforceable debt; and (3) there should be an endorsement of the banker for return of the cheque for insufficient funds. Since none of the three ingredients are fulfilled, the learned Magistrate ought not to have taken cognizance of the offence and issued the process and therefore, the impugned proceedings are liable to be quashed. He further submits that since the cheques are self-cheques, there is no liability on the part of the petitioners. It is also contended that under Section 32 of the Act, the liability of the drawee arises only when he accepts the bill. In support of his submission, the learned counsel for the petitioners placed reliance upon a judgment of the Apex Court in Jagjivan Mavji Vithiani v. Ranchhoddas Meghji AIR 1954 S.C. 554.