LexM/S ELECTRONICS TRADE AND TECHNOLOGY DEVELOPMENT CORPN., LTD., SECUNDERABAD versus M/S. INDIAN TECHONOLOGISTS AND ENGINEERS (ELECTRONICS) PVT. LTD. ANR.
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MIS ELECTRONICS TRADE AND TECHNOLOGY
A
DEVELOPMENT CORPN., LTD., SECUNDERABAD
v.
MIS. INDIAN TECHNOLOGISTS AND ENGINEERS
(ELECTRONICS) PVT. LTD. ANR.
JANUARY 22, 1996
[K. RAMASWAMY AND G.B. PATTANAIK, J.J.]
Negotiable Instmments Act, 1881 :
S. 13&-Stoppage of payment by Bank due to inst1uction-Notice given
by drawe,,_complaint filed-High Court coming to conclusion that the in-
gredients of S. 138 not prima facie made out and quashing the com-
plaint-Held; Ingredients of S. 138 satisfied-High Court's order set
aside-Trial Cowt directed to dispose of the matter expeditiously--On merits,
no opinion expressed .
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
124 of 1996 Etc.
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c
D
From the Judgment and Order dated 29.1.1992 of the Andhra
Pradesh High Court in Cr!. P. No. 1358 of 1991.
E
Dr. V. Gourishenkar, G. Saikumar and S. Rajappa for the Appellant.
L. Nageshwer Rao and S. U .K. Sagar for the Respondents.
The following Order of the Court was delivered :
F
Leave granted.
We have heard the counsel on both sides.
The appellant laid the complaints under Section 138 of the Nego- G
liable Instruments Act, 1881 (for short, 'the Act') for dishonour of cheque
for insufficiency of the funds in the accounts of the accused. The complaint
of the appellant read thus :
"The above cheque was presented by the complainant on
28.11.1990, through their Bankers Mis. Hyderabad Bank, Sarojini H
843
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844
SUPREME COURT REPORTS
[1996] 1 S.C.R.
Devi Road, Secunderabad for realisation, with the promise by the
accused, that the same will be honour~d when presented. However,
the said cheque was dishonoured with the Banker's endorsement
dated 29.11.1990. "l. referred to drawer. 2. instructions for stopping
payment and stamped. 3. exceeds arrangements". It is evident from
the Banker's memo dated 29.11.1990 that the said cheque was
dishonoured by the Bank for wants of funds only.
On receipt of the intimation dated 29.11.1990 from the Bank, the
complainant has issued a notice on 6.12.1990 to the accused by
Registered Post Acknowledgment Due, informing him that the
cheque dated 30.6.1990 was dishonoured by their bankers and
demanded payment within 15 days from the date of receipt of the
said notice. The said notice was received and acknowledged by the
accused. No payment has been made by the accused as required
under Section 138(C) of the Negotiable Instruments Act. The
accused 2 also stood as a guarantor to the payment of the com-
plainant, as the proprietor of M/s V.V. Rama Rao and Co.,
Saleemnagar Colony Hyderabad.
The accused 2 has issued the cheque knowing fully well that he
has no Bank balance to their credit and he cannot honour the
cheque for want of funds alone. He has not taken any steps to
honour cheque and arrange payment as required under Section
138(C) of the Negotiable Instruments Act. The accused has there-
by committed the offence under Section 138 of the Negotiable
Instruments Act. The dishonesty intention of the accused in in-
structing the Bank to stop payment in evident from the conduct of
the accused. He has instructed their Bank to stop payment only
with the malafide intention of escaping from the liability under
Section 138 of the Negotiable Instruments Act. He has so in-
structed their Bank so he has no funds to their credit. Hence the
accused is liable for the offence Under Section 138 of the Nego-
tiable Instruments Act."
Section 138 of the Act was brought on statute by Central Act 66 of
1988 w.e.f. April 1, 1989 with a view to penalise the accused in cases of
dishonour of certain cheques for insufficiency of funds in the accounts of
H the accused. It reads thus :
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'IRADE&TECH. DEVELOPMENT CORP."· INDIAN TECHNOLOGISTS &ENG. (ELECT.) P.LTD.
845
"138. Dishonour of cheque for insufficiency, etc., of funds in the
accounts. Where any cheque drawn by a person on an account
maintained by him with a banker for payment of any amount of
money to another person from out of that account for the dis-
charge, in whole or in part, of any debt or other liability, is returned
by the bank unpaid, either because of the amount of money
standing to the credit of that account is insufficient of the amount
of money standing to the credit of that account is insufficient to
honour the cheque or that it exceeds the amount arranged to be
paid from that account by an agreement made with that bank, such
person shall be deemed to Excerpt shown. Read the full judgment & AI analysis in Lexace.