@JUDGMENTTAG-ORDER
1. Dhanakodi, the petitioner herein has filed this petition u/s 482, Cr.F.C. seeking to quash the proceedings u/s 138 of the Negotiable Instruments
Act (hereinafter referred to as ""the Act"") arising out of private complaint filed by A.S. Dwaragan, the respondent herein.
2. Learned counsel for the petitioner, though raised several grounds in the application fired u/s 482, Cr.P.C., would argue the petition mainly on the
following two grounds;-
1. As per the agreement between the complainant and the accused dt.25.4.98, the disputed cheque can be presented for collodion only after
completion of construction of the building. The presentation of the cheque by the complainant before compliance of undertaking by completion of
work would not give rise to the cause of action since on the date of presentation of me cheque, there is no legal enforceable liability. As such,
section 138 of the Act is not maintainable.
2. The cheque in question was dishonoured and returned by the Bank with an endorsement ""Payees vernacular endorsement requires attestation by
drawer or by a Magistrate with seal"". Unless it is returned with an endorsement ""There is no sufficient fund in the account"", there cannot be any
complaint u/s 138 of the Act, especially when there is no averment in the complaint that the cheque amount was not available in the Bank,
3. On these two points, learned counsel for the petitioner and the learned counsel for the respondent were heard at length. Before dealing with the
points raised, it would be worthwhile to refer to the factual aspects.
4. On 25.4.98, an agreement was entered into between the complainant and the accused for construction of a residential building in the ground
floor of Plot No.3420, Tamil Nadu Housing Board, Mugappair Division, Avadi. As per the agreement, the complainant took up the construction
work and completed the same. The complainant was due to be paid a sum of Rs.45,000.
5. At the intervention of the mediators, the petitioner/accused settled the amount by issuing a cheque dt.5.4.99 for Rs.15,000. The
grahapravesham ceremony was also conducted on 26.3.99. Thereafter, the complainant presented the cheque as instructed by the accused on
12.6.99. The same was returned on 13.6.99 with an endorsement ""Payees vernacular endorsement requires attestation by drawer or by a
Magistrate with seal
6. Thereafter, the complainant sent a statutory notice on 17.6.99. The same was received by the accused on 26.6.99. The accused sent a reply
dt.5.7.99 which was received by the complainant on 9.7.99. In the said reply, it is ,stated that the cheque was given on condition that the same
shall be presented for collection only after completion of construction work and therefore the accused has the liability to honour the cheque only
after completion of the construction. Since no cheque amount was paid, the complainant filed a complaint before the Court concerned on 6.8.99.
6, After taking cognizance, learned Magistrate issued process to the accused/ who in turn filed an application on 27.1.2000 before the learned
XXIII Metropolitan Magistrate, Saidapet requesting for dropping the proceedings by raising various contentions. After hearing learned counsel for
the parties, learned Magistrate ultimately dismissed the petition holding that there is no ground made out to drop the proceedings by an order
dt.2.6.2000. Thereafter, the petitioner filed this application u/s 482, Cr.P.C, on 27.7.2000 before the Court seeking for quashing of the
proceeding.
7. At this juncture, it shall be noticed that the petitioner has not chosen to challenge the order passed by the learned Magistrate dismissing his
application for dropping the proceedings by filing a revision. On the other hand, the petitioner has independently filed this application by raising
various points including the point raised before the Trial Court seeking for quashing of the entire proceedings, contending that the continuance of
the said proceedings is illegal and abuse of process of the Court.
8. As noted above, the main points which have been urged before this Court are two folds.
9. The first point relates to the breach of undertaking as agreed by the parties on 25.4.98. According to the petitioner/accused, the cheque shall be
presented only on completion of construction work. Since the construction work was not completed, there is no liability for honouring the cheque.
10. This contention cannot be accepted at this stage because it is the specific case of the complainant that the construction of the house was
completed on 23.3.99 and grahapravesham was also completed on 26.3.99. The gril fixing was also completed on 5,4.99 and only thereafter, the
cheque was presented on 12.6.99. As such, the presentation of the cheque which was issued towards discharge of liability is perfectly valid.
11. There is no denial of the fact that the cheque was issued by the petitioner/accused in favour of the complainant. Section 139 of the Act
provides for presumption by which it is clear that once the cheque was issued by the drawer to the payee, it shall be presumed that the same was
issued for discharging the legally enforceable liability. Under those circumstances, the first point does not merit acceptance.
12. Let us now come to the second point. Learned counsel for the petitioner would vehemently contend that the cheque was not dishonoured for
want of funds and there is no averment in the complaint that there is no fund available in the Bank when the cheque was presented and therefore,
the complaint, in the absence of basic averment, is not maintainable.
13. He would cite the following Authorities:-
1. M/s. Balaji Seafoods Exports (India) Ltd. and another Vs. Mac Industries Ltd., ; 2. Shanku Concretes Pvt. Ltd. & others v. State of Gujarat &
Another, 2000 (2) M.W.N. (Cr.) DCC 85; 3. Dr. P.K. Mohammed Rasheed Vs. State of Kerala and Another, ; 4. Bhageerathy Vs. V. Beena
and Another, ; 5.. NEPC Micon Limited and Others Vs. Magma Leasing Limited, ; 6. M/S Modi Cements Limited Vs. Shri Kuchil Kumar Nandi,
; 7. K.K. Sidharthan Vs. T.P. Praveena Chandran and Another, ; 8.E.T. & T.D.C.L. v. Indian Technologists & Engineers, 1996 (I) C.C.R. 136;
9. Narang Industries Ltd. and another Vs. Ashok Leyland Finance Ltd.,
14. On the other hand, learned counsel for the respondent would cite other Authorities which are mentioned below and contend that the complaint
is maintainable. Whether fund was available on the date of presentation of cheque would be the matter of trial and the endorsement, on the basis of
which the cheque was returned by the Bank, would be a peculiar one. Since the petetioner is working in the very same Bank, such a peculiar
endorsement was made in order to defeat the rights of the complainant for taking action against the accused u/s 138 of the Act.
1. Veeraraghavan v. Lalith Kumar, 1995 (III) C.C.R. 379 ; 2. Crl. OP. Nos.880 batch of 1991 dt. 28.10.94 3. M.Y. Maharishi v. Tagore
Financiers, Madras, 1993 MWN 304; 4. G. Manohar v. Madras Cements Ltd., Madras -34. 1993 MWN 119.
15. It is true that all dishonoured cheques are not made punishable u/s 138 of the Act. It is equally true that the dishonour of cheque on account of
the fact that the amount was not available in the Bank is alone made punishable under the said section. In the private complaint in question, it is not
mentioned that cheque was returned with an endorsement ""Payees vernacular endorsement requires attestation by a drawer or a Magistrate with
seal"".
16. This reason of endorsement is quite irrelevant. It is clear from the averments of the complaint that the said endorsement has been purposely
made in the cheque at the instance of the accused since he is working in the Very same Bank. Therefore, merely because there is no endorsement
relating to non availability of funds, Ihe complaint cannot be thrown out. Moreover, it was not the case of the accused in his reply dt.5.7.99 that the
amount was available in the Bank on the date of presentation of the cheque.
Therefore, as replied, the complainant would be entitled to the cheque amount only after completion of building.
17. Under those circumstances, the absence of endorsement relating to want of funds made by the Bank in which admittedly the accused is
working would not put a seal on the right of the complainant from taking action against the accused u/s 138 of the Act. Equally it is true that there is
no averment in the complaint that there is no fund in the Bank when the cheque was presented and dishonoured.
18. As pointed out by the learned counsel for the petitioner, there are some decisions rendered by other High Courts holding that the absence of
those averments would make the complaint invalid. But when this question was referred to a Division Bench by the learned Single Judge of this
Court, all the other decisions cited by the learned counsel for the the petitioner were dealt with by the Division Bench, which in turn gave the direct
answer for the above question. The said answers are as follows:-
J. Veeraraghavan V. Lalith Kumar, 1995 (III) C.C.R. 379.
It shall be competent for a Magistrate to take cognizance of a private complaint, when the return by the Bank of the cheque bears an endorsement
of any of the contingencies or eventualities other than the ones mentioned in Section 138 of the Negotiable Instruments Act.
Invoking the inherent power u/s 482, Code of Criminal Procedure is not permissible to put an end to the prosecution, merely because the
averments in the complaint as relatable to insufficiency of funds, not being specifically mentioned, especially when the details as to the factum of
dishonour of a cheque, whatever be its reason, issued in discharge of a debt or other liability, in whole or in part, after its presentation within its
period of validity or six months from the date of such issue, whichever is earlier, coupled with the non-compliance by (he drawer of the demand
made on him and the institution of the prosecution within one month from such non-compliance, are all specifically mentioned in the complaint, as
that alone will constitute factors making out a prima facie case for an alleged offence u/s 138 of the Act to be taken cognizance of by the
Competent Court.
19. From these legal findings rendered by a Division Bench, it is clear that merely because it is not specifically mentioned in the complaint about the
insufficiency of funds in the Bank on the date of presentation of cheque, the proceedings arising out of the said complaint u/s 138 of the Act cannot
be said to be illegal. It is for the complainant to prove before the Court all the ingredients of section 138 of the Act during the course of trial.
20. With the above observations, the petition is liable to be dismissed. Accordingly it is dismissed. Consequently the connected Crl.M.P. is also
dismissed. The Trial Court is directed to dispose of the trial as expeditiously as possible.
