ANDHRA PRADESH HIGH COURT
Criminal Appeal No. 181 of 1999. D/d. 4.7.2003
M/s. Avon Organics Ltd. - Appellant
M/s. Poineer Products Limited and others - Respondents
For the Respondent Nos. 1 and 2 :- Mr. K. Vijayender Reddy, Advocate.
For the Respondent No. 3 :- Public Prosecutor.
A. Negotiable Instruments Act, Sections
B. Negotiable Instruments Act, Section
C. Negotiable Instruments Act, Sections
D. Negotiable Instruments Act, Sections
Cases referred :
Kusum Ingots and Alloys Ltd. v. Pennar Peterson Securities Ltd., 2000(2) RCR(Crl.) 275 (SC)
P. Srinivasulu v. Nagaral Eraiah Sheetty @ N. Chinna Eranna Setty and Sons, 1994(4) An.W.R. 225.
Ashok Yeshwant Badeve v. Surendra Madhav Rao Nighojakar, 2001(2) RCR(Crl.) 165 (SC)
T.N. Khambati v. Vinayak Enterprises, 1995(2) RCR(Crl.) 58 (A.P.) : 1995 Crl.L.J. 560.
Ch. S.R.K. Prasad, J. - This criminal appeal is directed against the judgment in C.C. No. 858 of 1997 rendered by the XV Metropolitan Magistrate, Hyderabad, in acquitting the accused for the offence under Section 138 read with Sections 141 and 142 of Negotiable Instruments Act, 1881 (for short the 'Act').
2. The facts that arise for consideration can be briefly stated as follows : The accused issued a blank cheque without mentioning the date and the amount to the appellant herein and sent it along with a letter dated 7.8.1997 stating that it could be presented after one month for payment, if he failed and to pay the amount prior to 7.9.1997. He also requested fifteen days time on 22.8.1997. Thereafter, the cheque was presented after filling up the blanks found at the amount portion and the date and it was presented through ICICI Banking Corporation after putting the amount as Rs. 11,19,206/- and date as 22.9.1997. As can be seen from Ex.P-8, it was dishonoured. Thereupon, Ex.P-10 notice was issued on 3.10.1997. The accused received the said notice on 7.10.1997. Ex.P-12 is the postal acknowledgment. The appellant invoked the provisions of Section 138 of the Act by presenting the complaint for dishonouring of cheque and it was taken on file. The accused pleaded not guilty. Thereupon, the trial was conducted. The appellant alone was examined as P.W.1 and the dishonoured cheque was Ex.P-7. Exhibit P-8 is the cheque return memo dated 25.9.1997. Ex.P-9 is the cheque return intimation dated 26.9.1997. Ex.P-10 is the office copy of the notice. Exhibit P-1 is the certificate of incorporation. Ex.P-2 is the certificate extract of the minutes of Board of Directors dated 5.11.1997. Exhibits P-3 and P-5 are the delivery challan invoices. Ex.P-4 is the copy of consignment note. The learned Metropolitan Magistrate recorded a finding of not guilty and acquitted the accused. Thereupon, the appellant preferred this criminal appeal.
3. This appeal is presented against the acquittal order. This court can interfere only when it is shown that the judgment is perverse and there is no proper appraisal of the evidence, which led to miscarriage of justice. The powers vested in the Appellate court have been adumbrated under Section 386 Cr.P.C. It is to be seen whether there is any perversity in the judgment of the lower court.
4. The contention of the learned counsel for the appellant is that the blank cheque was issued for legally enforceable debt. It is necessary to have a look at section 138 of the Act, which reads as follows :
- "138. Dishonour of cheque for insufficiency, etc., of funds in the account :- Where any cheque drawn by a person on an account maintained by him with a banker 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, or with both :
- Provided that nothing contained in this section shall apply unless -
- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
- (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
- (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
- Explanation :- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability."
- "A 'cheque' is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand."
- "Effect of material alteration :- Any material alteration of negotiable instrument renders the same void as against any one who is a party thereto at the time of making such alteration and does not consent thereto, unless it was made in order to carry out the common intention of the original parties;
- Alteration of indorsee, and any such alteration, if made by an indorsee, discharges his indorser from all liability to him in respect of the consideration thereof."
- "The lower court found that Ex.P-1 does not contain the ingredients of a valid cheque so as to attract the provisions of Section 139 of the Negotiable Instruments Act. In a case where a blank cheque has been issued, the issuance of which is not denied by the accused, even though it was asserted by him that it was not issued with any dishonest intention, the presumption under Section 139 of the Act can be drawn. The presumption under Section 139 is a rebuttal presumption, and the accused admitted the same and has not cross-examined the prosecution witnesses. Mere filling up of the figures in the cheque by the complainant will not be a ground for invalidating the cheque and preventing the party from taking steps under Section 138 inserted by the Negotiable Instruments Laws (Amendment) Act 1988 on the ground of insufficiency of funds. This court has held that endorsement will not be a ground for throwing away the case under Section 138."
- "From a bare perusal of Sections 5 and 6 of the Act it would appear that bill of exchange is a negotiable instrument for writing containing an instruction to a third party to pay a stated sum of money at a designated future date or on demand. On the other hand, a 'cheque' is a bill of exchange drawn on a bank by the holder of an account payable on demand. Under Section 6 of the Act, a 'cheque' is also a bill of exchange. But it is drawn on a banker and payable on demand. A bill of exchange even though drawn on a banker, if it is not payable on demand, it is not a cheque. A post-dated cheque is not payable till the date which is shown thereon arrives and will become cheque on the said date and prior to that date the same remains bill of exchange."
- "Section 138 of the Act is introduced with a view to avoid the malignant trade practice of indiscriminately issuing cheques without sufficient funds. The amendment is introduced with a view to curb instances of issuing such cheques indiscriminately. So, having regard to the purpose with which this provision is introduced, it is doubtful whether a case of this nature can be construed as attracting the provisions of Section 138 of the Act. In the instant case, the appellant advanced some money to the respondents and obtained a pronote. It was stipulated that the respondents should pay interest every month. At the same time appellant-creditor took a blank signed cheques from the respondents with the understanding that the complainant could fill the other columns in the cheque and present it if the respondents committed default in payment of interest. The respondents paid interest for about 8 months and thereafter stopped payment of interest. Then the appellant put the date as 15.1.1991, wrote his own name in the space intentioned for the payee and also mentioned amount as Rs. 1,18,337/- and presented the cheque. Even at the time when he presented the cheque, he would not have expected that the cheque would be honoured. He was presenting a cheque only with a view to get an endorsement, which would enable him to proceed under Section 138 of the Act. If this sort of practice is allowed, every creditor should abuse the provisions of Section 138 of the Act by obtaining blank cheques and putting the debtors in the fear of presentation insist on discharge of the debts at any time. I do not think that would have been the intention of the Legislature while incorporating Section 138 in the Negotiable Instruments Act. Though the appellant did not state the circumstances under which he obtained the pronote and the cheque in his complaint yet it is clear from the evidence the circumstances under which the complainant obtained a signed blank cheque from the respondent. So, it cannot be construed that the respondent had issued the cheque voluntarily for discharge of any debt or legal liability as envisaged under section 138. I, therefore, find that the facts and circumstances of the case are not attracted by the provisions of Section 138 of the Act and that the learned Magistrate was justified in acquitting the accused. Hence, the Criminal Appeal is dismissed."
11. The Criminal Appeal is, accordingly, dismissed.