SHRADHA FOUNDATION PVT LTD Vs. SURYO UDYOG LTD

JUDGEMENT

(1.) THIS petition under Section 482, Cr. P. C. is filed invoking the inherent power of the Court to quash the proceeding in Complaint Case No. 17 of 1993 on the file of the learned Judicial Magistrate, First Class, Bhubaneshwar.

(2.) SURYO Udyog Limited, a public limited Company, registered under the Companies act, 1956 is having its registered office at Sahid Nagar, Bhubaneswar. M/s. Shradha Foundation (P) Ltd. is a private limited Company of which Shri S. P. Jaiswal is the Director. Both M/s. Shradha Foundation and Shri S. R Jaiswal (hereinafter referred to as 'the accused person') are petitioners and M/s. Suryo Udyog ltd. (hereinafter referred to as 'the complainant') is the opposite party No. 1 in the present proceeding. The complainant filed the aforesaid complaint under Section 138 of the Negotiable Instruments Act, 1881 (for short 'the Act') alleging, inter aha, that the accused persons for satisfaction of the outstanding dues had issued an Account Payee Cheque dated 24. 9. 1992 for a sum of Rs. 77,000/- drawn on the State Bank of India, Howrah Branch. The said cheque was presented for encashement, but returned unpaid with endorsement "payment stopped by the drawer". Thereafter the complainant issued a notice to the accused persons intimating the fact of return of the cheque and demanded payment of the amount within 15 days of receipt of the said notice. Despite that when they did not pay the amount, the complainant filed the case alleging that in order to defraud the creditor they had issued the cheque which was returned unpaid for want of sufficient funds in their account and therefore, they are liable for punishment under section 138 of the Act.

(3.) COGNIZANCE of the offence having been taken the accused persons were noticed to appear. In response to the notice, they entered appearance through their counsel under Section 205, Cr. P. C. and filed a petition to recall/rescind the impugned order, whereby cognizance of the offence was taken, and to drop the proceeding. It was urged that a case could be maintained if the cheque was returned either because of the amount of money standing to the credit of the account of the drawer was insufficient to honour the cheque or that it exceeded the amount arranged to be paid from that account by an agreement with the Bank. In the present case the grievance of the complainant being that the cheque was returned with endorsement "payment stopped by the drawer" and not that the drawer had insufficient funds in the account, the impugned order of taking cognizance under section 138 of the Act is bad in law. Upon hearing, the learned Magistrate did not feel inclined to rescind or recall the impugned order and consequently rejected the petition.