Mismatch of signatures on Cheque - Provisions of Section 138 are attracted

UTTARAKHAND HIGH COURT

Before :- U.C. Dhyani, J.
Criminal Misc. Application No. 840 of 2010. D/d. 24.2.2014.

Virendra Singh Bisht - Petitioner
Versus
Sahil Trading Company - Respondent

For the Petitioner :- R.P. Nautiyal, Sr. Adv., assisted by Prashant Khanna.
For the Respondent :- Lokendra Dobhal, Advocate.

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Cases Referred :
Amit Kapoor v. Ramesh Chander, (2013) 1 Supreme Court Cases (Cri) 986.
Laxmi Dyechem v. State of Gujarat, 2012 Vol 11 Scale 365 : (2012) 13 SCC 375.
M/S Sahil Trading v. Virendra Singh, Criminal Case No. 865 of 2010.
Rajkumar Khurana v. State of (NCT of Delhi), (2009) 6 Supreme Court Cases 72.
Satish Kumar Mishra v. M/s Woodcastle SPA & Resorts, 2013 (2) U.D., 116.
Vinod Tanna v. Zaher Siddiqui, 2002 (45) ACC 389.

Jharkhand High Court, Ranchi Judgments

ORDER
U.C. Dhyani, J. - The applicant, by means of present petition moved under Section 482 Cr. P.C., seeks to quash the summoning order dated 18.06.2010 (annexure-6) as well as the proceedings of Criminal Case No. 865 of 2010, M/S Sahil Trading v. Virendra Singh, under Section 138 of the Negotiable Instruments Act, 1881, pending in the Court of Additional Judicial Magistrate, Rishikesh.
2. The complainant (respondent herein) filed a criminal complaint case against the accused (applicant herein) in the Court of Additional Judicial Magistrate, Rishikesh. Statement of the complainant was recorded under Section 200 Cr.P.C.
A copy of bank cheque, copy of notice, postal receipts, photo-state copies of the receipts, copy of the reply and bank memo were filed under Section 202 Cr.P.C. After having found a prima facie case, accused (applicant herein) was summoned to face the trial under Section 138 of the Negotiable Instruments Act, 1881 vide order dated 18.06.2010. Aggrieved against the same, present application under Section 482 Cr.P.C. was filed.
3. The complainant stated in his complaint, among other things, that the applicant was running a hardware shop at Mandal, which was a remote area and situated near Gopeswar District Chamoli. The respondent was running his business at Rishikesh and was a supplier of cement and other hardware material. Applicant was purchasing hardware material from the respondent for the last about ten years from the date of dispute. Applicant supplied very poor quality of iron to the applicant in the year 2009, so applicant refused to keep that iron and informed to the respondent to take this iron back from shop of the applicant and requested to replace this iron with the good quality of iron, but respondent did not take back this poor quality of iron from the shop of the applicant. The quantity of iron was about 35-40 quintals.
4. In the month of October, 2009, respondent came to the shop of the applicant in Mandal, but the applicant was not present in his shop at that time. The worker of the shop allowed the respondent to sit in the shop and wait for the applicant, but when the applicant came back to his shop, he found that respondent was not present in the shop and had gone back from his shop.
5. The contention of learned counsel for the applicant is that if the signatures of payee differs, the provision of Section 138 of the Negotiable Instruments Act, 1881, are not attracted. It is also submitted by the learned counsel for the applicant that the cheque in question does not have the signatures of the applicant, as is evident from the complaint itself. The cheque was deposited with the forged signature by the respondent in Rishikesh. The same came for payment in the Uttaranchal Gramin Bank, Mandal. When the applicant came to know this, then he inquired in the bank. Applicant found that it was the lost cheque of the applicant for which applicant already informed the police. Respondent misused this cheque for his own benefit and no cause of action arises on the basis of the forged cheque against the applicant. Reliance is placed upon the ruling of Rajkumar Khurana v. State of (NCT of Delhi) and another, (2009) 6 Supreme Court Cases 72, but the facts of the instant case are different. The cheque in the instant case was returned by the Bank as the signatures of payee were different. In Rajkumar Khurana's (supra) case, it was held that refusal on the part of the bank to honour the cheque, would not bring the matter within the mischief of the provision of Section 138 of the Negotiable Instruments Act, 1881.
6. In Vinod Tanna & another v. Zaher Siddiqui & others, [2002 (45) ACC 389], Hon'ble Gujarat High Court took a view that dishonour of a cheque on the ground that the signatures of the drawer of the cheque do not match the specimen signatures available with the bank, would not attract the penal provisions of Section 138 of the Negotiable Instruments Act. According to Hon'ble Gujarat High Court the provisions of Section 138 are attracted only in cases where a cheque is dishonored either because the amount of money standing to the credit to the account maintained by the drawer is insufficient to pay the cheque amount or the cheque amount exceeds the amount arranged to be paid from account maintained by the drawer by an agreement made with the bank. Dishonour of a cheque on the ground that the signatures of the drawer do not match the specimen signatures available with the bank does not, according to the Hon'ble High Court, fall in either of these two contingencies, thereby rendering the prosecution of the respondents legally impermissible. The said view was not approved by the Hon'ble Apex Court in M/s Laxmi Dyechem v. State of Gujarat and others, 2012 Vol 11 Scale 365; (2012) 13 SCC 375. Para 15 of Laxmi Dyechem's Judgment (supra) is being reproduced herein below:
    "The above line of decisions leaves no room for holding that the two contingencies envisaged under Section 138 of the Act must be interpreted strictly or literally. We find ourselves in respectful agreement with the decision in NEPC Micon Ltd. (supra) that the expression "amount of money is insufficient" appearing in Section 138 of the Act is a genus and dishonour for reasons such "as account closed", "payment stopped", "referred to the drawer" are only species of that genus. Just as dishonour of a cheque on the ground that the account has been closed is a dishonour falling in the first contingency referred to in Section 138, so also dishonour on the ground that the "signatures do not match" or that the "image is not found", which too implies that the specimen signatures do not match the signatures on the cheque would constitute a dishonour within the meaning of Section 138 of the Act. This Court has in the decisions referred to above taken note of situations and contingencies arising out of deliberate acts of omission or commission on the part of the drawers of the cheques which would inevitably result in the dishonour of the cheque issued by them. For instance this Court has held that if after issue of the cheque the drawer closes the account it must be presumed that the amount in the account was nil hence insufficient to meet the demand of the cheque. A similar result can be brought about by the drawer changing his specimen signature given to the bank or in the case of a company by the company changing the mandate of those authorised to sign the cheques on its behalf. Such changes or alteration in the mandate may be dishonest or fraudulent and that would inevitably result in dishonour of all cheques signed by the previously authorised signatories. There is in our view no qualitative difference between a situation where the dishonour takes place on account of the substitution by a new set of authorised signatories resulting in the dishonour of the cheques already issued and another situation in which the drawer of the cheque changes his own signatures or closes the account or issues instructions to the bank not to make the payment. So long as the change is brought about with a view to preventing the cheque being honoured the dishonour would become an offence under Section 138 subject to other conditions prescribed being satisfied. There may indeed be situations where a mismatch between the signatories on the cheque drawn by the drawer and the specimen available with the bank may result in dishonour of the cheque even when the drawer never intended to invite such a dishonour. We are also conscious of the fact that an authorised signatory may in the ordinary course of business be replaced by a new signatory ending the earlier mandate to the bank. Dishonour on account of such changes that may occur in the course of ordinary business of a company, partnership or an individual may not constitute an offence by itself because such a dishonour in order to qualify for prosecution under Section 138 shall have to be preceded by a statutory notice where the drawer is called upon and has the opportunity to arrange the payment of the amount covered by the cheque. It is only when the drawer despite receipt of such a notice and despite the opportunity to make the payment within the time stipulated under the statute does not pay the amount that the dishonour would be considered a dishonour constituting an offence, hence punishable. Even in such cases, the question whether or not there was a lawfully recoverable debt or liability for discharge whereof the cheque was issued would be a matter that the trial Court will examine having regard to the evidence adduced before it and keeping in view the statutory presumption that unless rebutted the cheque is presumed to have been issued for a valid consideration."
7. This Court, in para 10 of the judgment rendered in Satish Kumar Mishra v. M/s Woodcastle SPA & Resorts, 2013 (2) U.D., 116, held as below:
    "Hon'ble Apex Court in the case of Laxmi Dyechem v. State of Gujrat and others reported in 2012 (11) 365 has held that 'stop payment', 'signature not matching' or 'account closed' would also amount to dishonour of the cheque on the ground 'amount of money is insufficient' to honour the cheque. It is further held that there is statutory presumption under Section 139 in favour of the holder of the cheque against the drawer of the cheque that cheque was issued by the drawer in discharge of liability and such statutory presumption has to be rebutted by the accused. In the humble opinion of this Court such rebuttal can be made by the accused only during the trial and not at the summoning stage by way of filing petition under Section 482 of the Code of Criminal Procedure or under Section 226 of Constitution of India challenging the summoning order."
8. It will, therefore, be inappropriate to hold that the provision of Section 138 of the Negotiable Instruments Act, 1881 are not attracted if the signatures on the cheque differ from the specimen signatures of the payee in the bank documents. Foundation of criminal offence under Section 138 of the Negotiable Instruments Act, 1881 is, therefore, laid against the applicant.
9. Hon'ble Supreme Court in Amit Kapoor v. Ramesh Chander and another, (2013) 1 Supreme Court Cases (Cri) 986, has laid down certain principles in respect of exercise of jurisdiction under Section 482 Cr.P.C. Some of those principles, which are relevant to the facts of this case, can be summarised as below:
    a. The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion and where the basic ingredients of a criminal offence are not satisfied then the Court may interfere.
    b. Where the factual foundation for an offence has been laid down, the courts should be reluctant and should not hasten to quash the proceedings even on the premise that one or two ingredients have not been stated or do not appear to be satisfied if there is substantial compliance with the requirements of the offence.
    c. The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in conviction or not at the stage of framing of charge or quashing of charge.
    d. Where the exercise of such power is absolutely essential to prevent patent miscarriage of justice and for correcting some grave error that might be committed by the subordinate courts even in such cases, the High Court should be loathe to interfere, at the threshold, to throttle the prosecution in exercise of its inherent powers.
    e. Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction, the Court is concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice.
10. It is also the settled law that the factual controversy need not be gone into by this Court in exercise of it's inherent jurisdiction. Inherent jurisdiction under Section 482 of Cr. P.C. has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid in the Section itself. The applicant, in the instant case, is unable to pass those tests.
11. Application under Section 482 Cr.P.C., therefore, fails and is dismissed, with the liberty to the applicant to raise all the factual pleas before the trial court for securing his discharge/ acquittal, at an appropriate stage.
12. Interim order dated 28.09.2010 is also vacated.
Application dismissed.
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