TMI Blog2022 (1) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeds the arrangement. In VINOD TANNA ANR. VERSUS ZAHEER SIDDIQUI ORS. [ 2001 (9) TMI 1078 - SUPREME COURT] , the Supreme Court, while dealing with a case where the cheque drawn by the accused was not been honoured by the bank on account of drawer s signatures being incomplete, held that dishonour of cheque for the aforesaid reason would not constitute an offence under Section 138 of the NI Act and, accordingly, the criminal proceedings against the accused were quashed. The aforesaid decision of the Supreme Court came up for consideration before the same Court in the case of Laxmi Dyechem vs. State of Gujarat and others, [ 2012 (12) TMI 106 - SUPREME COURT] . The Supreme Court in the aforesaid decision did not follow the ratio laid down in Vinod Tanna s case [ 2001 (9) TMI 1078 - SUPREME COURT] ,. - The Supreme Court on the basis of the aforesaid observations and the ratio, while dealing with a case in which the cheques were dishonoured by the bank on the ground that drawer s signatures were incomplete and that no image was found or that the signatures did not match, came to the conclusion that criminal prosecution against the accused in such cases should be allowed to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued the cheques in question, deliberately and intentionally in order to cheat and defraud the respondent, endorsed signature of only one of the partners on the cheques, as a result of which the same were dishonoured by the banker. The respondent/complainant served a legal notice upon the petitioners through registered post and when the petitioners failed to liquidate the cheque amount, the complaint, which is subject matter of this petition, came to be filed before the trial Magistrate. The learned Magistrate, after recording the preliminary evidence, took cognizance of the offences and issued process against the petitioners. The complaint and the order issuing process against the petitioners are under challenge before this Court. 3) The primary ground that has been urged by the petitioners is that the complaint and the order of issuing process is not legally tenable as the dishonor of cheque due to mismatch of signatures or incomplete signatures does not constitute an offence under Section 138 of the NI Act. Petitioners have relied upon judgment of the Supreme Court in the case of Vinod Tanna. Vs. Zaheer Siddiqui, (2002) 7 SCC 541 to support their contention. 4) I have hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im with a banker for payment of any amount of money to another person from out of that account for the discharge of any debt, is returned by the bank unpaid either because 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. At first blush, it appears that it is only in two situations that Section 138 of the NI Act is attracted, firstly when there are insufficient funds available in the bank account of the person who is drawing the cheque and secondly where it exceeds the arrangement. However, the provision has been interpreted by the Supreme Court in a number of judgments in a manner so as to include within its ambit even the cases where the dishonor of cheque has taken place for the reasons other than the aforesaid two reasons. 7) In NEPC Micon Limited And Others vs. Magma Leasing Limited,( 1999) 4 SCC 253, the Supreme Court rejected the contention that Section 138 of the NI Act has to be interpreted strictly or in disregard of the object sought to be achieved by the Statute. Relying upon its earlier judgment in the case of Kanwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act draws presumption of dishonesty against drawer of the cheque if he without sufficient funds to his credit in his bank account to honour the cheque issues the same and, therefore, this amounts to an offence under Section 138 of the Act. For the reasons stated hereinabove, we are unable to share the views expressed by this Court in the above two cases and we respectfully differ with the same regarding interpretation of Section 138 of the Act to the limit extent as indicated above. 9) The question whether stop payment instructions, which result in dishonor of a cheque, would amount to an offence under Section 138 of the NIA Act, was considered by the Supreme Court in M. M. T. C. Ltd. Vs. M/S Medchl Chemicals, (2001) 1 SCC 234, and it was held that same would come within the ambit of definition of offence under Section 138 of the NIA Act. Similar view was taken by the Supreme Court in the case of Goaplast (P) Ltd vs. Chico Ursula D'Souza, (2003) 3 SCC 232. 10) In the face of foregoing discussion, it is clear that the Supreme Court has interpreted the provisions contained in Section 138 of the NI Act in a liberal manner so as to achieve the object for which the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Technology Development Corporation Ltd. (supra) that a dishonour of the cheque by the drawer after issue of a notice to the holder asking him not to present a cheque would not attract Section 138 has been specifically overruled in Modi Cements Ltd. case (supra). The net effect is that dishonour on the ground that the payment has been stopped, regardless whether such stoppage is with or without notice to the drawer, and regardless whether the stoppage of payment is on the ground that the amount lying in the account was not sufficient to meet the requirement of the cheque, would attract the provisions of Section 138. 14) The Supreme Court on the basis of the aforesaid observations and the ratio, while dealing with a case in which the cheques were dishonoured by the bank on the ground that drawer s signatures were incomplete and that no image was found or that the signatures did not match, came to the conclusion that criminal prosecution against the accused in such cases should be allowed to proceed and the judgment and orders passed by the High Court quashing the criminal proceedings were set aside. 15) Both the judgments of the Supreme Court in Vinod Tanna s case as well ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
