TMI Blog1992 (6) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... ell through, he issued a cheque dated December 8, 1989, bearing No. 787656 drawn on the Cheppad branch of the Lord Krishna Bank for repayment of the amount. Thereafter, with the intention of cheating the complainant and to make unlawful enrichment to himself, the accused caused the issuance of a lawyer's notice on September 25, 1989, alleging incorrect acts. By the intervention of mediators, the accused agreed to remit a sufficient amounts in the bank so as to honour the cheque. The complainant agreed to forgo interest on the amount. Contrary to this agreement, without remitting the amount in the bank for honouring the cheque, the accused informed the bank to stop payment of the amount covered by the cheque. The complainant presented the cheque through the Punalur Branch of the Canara Bank for encashment. That cheque was dishonoured by memo dated April 4, 1990, stating payment stopped by the drawer . The complainant proceeded to state that the accused had no funds with his bank either on December 8, 1989, or on any subsequent date and so he issued stop memo to the bank. When the cheque was dishonoured, a lawyer's notice was sent to the accused on April 18, 1990, requiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er from out of that account. The money so drawn must have been for the discharge of the whole or part of any debt or other liability. The said cheque must be returned by the bank unpaid. The return of the cheque must be either because the amount of money standing to the credit of that account is insufficient to honour the cheque or it exceeds the amount arranged to be paid from that account by an agreement made with the bank. On satisfying these conditions, the drawer of the cheque will be deemed to have committed an offence under the section if the other requisites in the proviso are satisfied. As per the proviso, the cheque should have been presented to the bank within a period of six months from the date on which it was drawn or within the period of its validity, whichever is earlier. The payee should make a demand for the payment of the amount covered by the cheque by giving notice in writing to the drawer within 15 days of the information regarding the return of the cheque. Within 15 days of the receipt of the said notice, the drawer of the cheque must fail to pay the amount covered by the cheque to the payee or the holder in due course of the cheque. 5. In the instant case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an an offence under Section 138 of the Act be made out. According to us. such an approach will defeat the very purpose of the enactment. 8. The offence under the section cannot depend on the endorsement made by the banker while returning the cheque. Irrespective of the endorsement made by the banker, if it is established that in fact the cheque was returned unpaid either because the amount of the money standing to the credit of the account of the drawer 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 offence will be established. The endorsement made by the banker while returning the cheque cannot be the decisive factor. 9. Learned counsel representing the petitioner brought to our notice the following decisions in support of his contention that the offence under Section 138 of the Act will depend on the wording of the endorsement made by the banker while returning the cheque. The first decision referred to by him is of a learned single judge of the Punjab and Haryana High Court in Abdul Samad v. Satya Narayan Mahawar [1993] 76 Comp Cas 241. In that case, the Ranker returned the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adverse implications on the financial soundness of the drawer of the cheque and consequently affect his reputation also. So if the banker refrains from making such a derogatory endorsement, should the object of the legislation be defeated ? 11. The rule of strict interpretation of penal statutes in favour of an accused is not of rigid or universal application. It must be considered along with other well established rules of interpretation. When it is seen that the scheme and object of the statute are likely to be defeated by the strict interpretation, courts must endeavour to resort to that interpretation which furthers the object of the legislation. It is well recognised that a statutory provision must be construed, if possible, to avoid absurdity and mischief. In K.P. Varghese v. ITO [1981]131ITR597(SC) : [1981]131ITR597(SC), their Lordships observed (at pages 605 and 606) : It is now a well-settled rule of construction that where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the Legislature, the court may modify the language used by the Legislature or even 'do some vio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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