NDLI: Modi Cements Ltd. Vs. Shri Kuchil Kumar Nandi

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	1881 : Sections 138 and 139 Negotiable Instruments Act
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Negotiable Instruments Act, 1881 (26 of 1881)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Criminal Law :Negotiable Instruments Act, 1881 :Sections 138 and 139-Dishonour of cheque-Complaint against-Cognizance of-By Metropolitan Magistrate-Drawer of cheque issued "stop payment" instructions to his back prior to presentation of cheque-High Court quashed complaint under S. 482 Cr. P.C. -Validity of-Held: "Stop payment" instructions will not preclude an action under S. 138-Such liability cannot be avoided even by giving notice to the payee or holder in due course, prior to presentation of the cheque, not to present the cheque but he presents it and the cheque is returned pursuant to "stop payment" instructions-Decision to that effect in para 6 of Electronics Trade and Technology Development Corporation's case [1996] 2 SCC 734 and followed in K.K. Sidharthan 's case [1996] 6 sec 369 being contrary to the object and purpose of Ss. 138-142, overruled-The fact that presumption under S. 139 is attracted to such a situation was wrongly ignored in the above cases-Drawer of the cheque will get an opportunity to rebut the presumption at the trial-Hence, High Court not justified in quashing the complaint at the threshold-Case restored before Metropolitan Magistrate and all contentions are kept open. Section 138-insufficient funds-At the time of drawing of cheque-Dishonesty-Presumption of-Held : Jn such a situation drawing of presumption of dishonesty on the part of the drawer under S. 138 not justified-Drawer can make arrangement or deposit amount in his account before cheque is presented-S. 138 gets attracted only when cheque is dishonoured.Sections 138 and 139-Dishonour of cheque-Complaint against-Cognizance of-Taken on being satisfied about existence of a prima facie case-High Court quashed complaint under S. 482 Cr. P.C.-Held: Issuance of cheque raises a presumption under S. 139-Drawer of cheque gets an opportunity to rebut that presumption at the trial-Petition under S.482 Cr. P. C. is tenable only when no offence even prima facie is made out-Whether a prima facie offence under S. 138 is made out or not depends upon the averments made in the complaint-Criminal Procedure Code, 1973, S.482. Interpretation of Statutes : Deeming provision-Held : Distinction between the deeming provision and a presumption is well discernible. The respondent had drawn three cheque in favour of the appellant in February 1994 in partial discharge of liability/debt. The appellant presented these three cheques on 9-8-1994 for encashment through its bankers. On 16-9-1994 the respondent's banker returned the said cheques as unpaid with the endorsement "payment stopped by the drawer". Later on it transpired that the respondent void his letter debated 8-8-1994 had given such instruction. The appellant on 13-9-1994 sent a legal notice in terms of Section 138 of the Negotiable Instruments Act, 1881 to the respondent demanding payment of the amounts under the cheques. Since the respondent failed to make the payment of the amount of the aforesaid three cheques within the stipulated period of 15 days, which expired on 2-10-1994, the appellant filed three criminal complaints against the respondent under Section 138 of the Act. The respondent filed applications for staying the proceedings, which were rejected. The respondent then filed three petitions under Section 482 of the Criminal Procedure Code, 1983 for quashing the complaints. The High Court allowed the petitions and quashed the complaints on the following grounds:-(1) The appellant has not pleaded in his complaint that the cheques were returned by the Bank unpaid either because 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. The necessary ingredients of Section 138 of the Act having not been pleaded the Court could not have taken cognizance of the offence. (ii) Mere endorsement of the Bank "payment stopped" was not sufficient to entertain the com plaint, as that was not an ingredient of the offence under Section 138 of the Act. Being aggrieved of the High Court's iudgment the appellant preferred the present appeal.
Judge	Hon'ble Mr. Justice S.P. Kurdukar
Neutral Citation	1998 INSC 149
Petitioner	Modi Cements Ltd.
Respondent	Shri Kuchil Kumar Nandi
SCR	[1998] 1 S.C.R. 1192
Judgement Date	1998-03-22
Case Number	244

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