291☺️ESCAPE CHEQUE BOUNCE CASE? When proved legally enforceable debt or liability does not exist?

#chequebounce #escape #legallyenforceabledebt

Andhra High Court
Uplanche Mallikarjun And Ors. vs Rat Kanti Vimala And Anr. on 3 July, 1997
Equivalent citations: 1997 (2) APLJ 389
Bench: T R Rao
JUDGMENT

2. The first respondent filed a complaint against the petitioners for an offence punishable under Section 138 of the Negotiable Instruments Act (for short 'the Act'), read with Section 142 of the Act alleging that the petitioners 1 to 3 and others established a Marriage Trust styled as 'Kanyaka Parameswari Charitable Marriage Trust', registered as 2195 and maintained the office at Market Cross Roads, Siddipet of Medak District and approached the complainant and requested her to become member of the said Trust, that believing their version she joined as a member by paying some amount as directed by them, that then the petitioners issued a cheque for Rs. 30,000/- drawn on State Bank of India, Chikkadpalli Branch, Dtd. 30-6-1996, that it was presented and returned unpaid with an endorsement "insufficient funds" on 17-7-1996, that the complainant got issued a notice on 27-7-1996 requesting to pay the amount, that the petitioners failed to pay the amount and that therefore, the petitioners deceived the complainant.
3. Now the petitioners filed the petition requesting to quash the proceedings.
4. The learned counsel for the petitioners submitted that from a reading of the averments of the complaint it is clear that there is no allegation that there is a legally enforceable debt or liability and for discharge of the same the cheque was issued, that in the absence of any such allegation the provision of S. 138 of the Act does not get attracted. It is further submitted that if the cheque is given as a gift or charity and if it is dishonoured it does not amount to an offence under S. 138 of the Act, and requested to quash the proceedings.
5. The learned counsel for the respondent submitted that the petitioner met the complainant and requested to become a member of the said Marriage Trust and then she believed their version and became a member and completed all the formalities by paying the amount as directed and the petitioners herein issued a cheque on 30-6-1996 for Rs. 30,000/- and the same was dishonoured and hence, they are liable for an offence under S. 138 of the Act.
6. There is no dispute with regard to the issuance of cheque by the petitioners which was presented and the same was dishonoured with an endorsement 'insufficient funds'. The only point that arises for consideration is whether the complaint is maintainable in the absence of any allegation that the cheque was issued in discharge of whole or part of the legally enforceable debt or liability. It is useful to refer to S. 138 of the Act, which reads as under :-
"Where any cheque drawn by a person on an account maintained by him with a bank for payment of any amount of money to another person from out of that account for the discharge, 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 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 have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque. .............."
Thus it is clear that the cheque should be issued by the drawer in discharge of the full or part of the debt or liability and if the said cheque was dishonoured due to insufficient funds, etc., then only S. 138 of the Act gets attracted, if other conditions are complied with. On a perusal of the averments of the complaint, there is no averment that the cheque was issued by the petitioners in discharge of any legally enforceable debt or other liability. I am fortified in my conclusion by the decision of Division Bench of this Court in B. Mohan Krishna v. Union of India , wherein this Court, in para 51 (of Andh LT) : (para 50 of Cri LJ) of its judgment, observed as under :-
"......... Where a cheque is issued not for the purpose of discharge of any debt or other liability, the maker of the cheque is not liable for prosecution. For example, if the cheque is given by way of a gift or present and if it is dishonoured by the bank, the maker of the cheque is not liable for prosecution. Unless the two conditions set out in S. 138 are satisfied, no criminal liability can be fastened. ......"
Therefore, in the light of the foregoing discussion, I hold that the complaint is not maintainable and the petitioners are entitled to quash the proceedings.
7. In the result, the petition is allowed and the proceedings in CC No. 275 of 1996 on the file of the Judicial Magistrate of First Class, Banswada are quashed.
8. Petition allowed.