Whether complainant can prosecute a woman for the cheque's dishonour if she had issued said cheque for her husband's discharge of liability?

 In the opinion of this Court, these are disputed questions of fact, which cannot be gone into in a quash petition under Section 482 Cr.P.C. However, it is seen that the impugned cheque in this case has been issued by Nagalakshmi (A2) from her personal bank account in discharge of the debt of her husband Jaishankar (A1). The impugned cheque has not been issued from the bank account of any juristic entity for invoking vicarious liability provision viz., Section 141 of the NI Act.

8. It is trite that if a cheque is issued by a person in discharge of the liability of another person and if the cheque is dishonoured, the person, who issued the cheque can be prosecuted under Section 138 of the NI Act. Just because Jaishankar (A1) was the beneficiary of the loan, he cannot be prosecuted under Section 138 of the NI Act for the dishonour of the cheque issued by his wife Nagalakshmi (A2).

In the High Court of Madras

(Before P.N. Prakash, J.)

M. Jaishankar Vs Sree Gokulam Chits and Finance Corporation Private Limited, 

Crl.O.P. No. 2016 of 2016 and Crl.M.P. No. 1007 of 2016

Decided on December 4, 2020

Citation: 2020 SCC OnLine Mad 5550

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Whether the cause of action for the dishonour of cheque is defeated if accused makes part payment of cheque amount?

Regarding part payment he has relied upon a decision of the Bombay High Court in the case of Vishnu Bhat Vs/. Narayan R. Bandekar and Others, reported in MANU/MH/0936/2007 : 2008 (2) ICC 494 wherein the Single Bench of the Bombay High Court held that once the cheque is dishonoured, the offence is committed and any payment subsequent thereto will not absolve the accused of liability of criminal offence.

21. Regarding point No. 1: this Court is of the considered view that simply because Rs. 1 lakh was received by the complainant after issuance of statutory notice is enough to deviate from the cause of action. The decision of Kerala High Court as passed in Shiju K. (Supra) can have only persuasive value as it is a decision of the other High Courts. This Court is not unmindful of the other decisions on this point as reported in MANU/SC/8178/2006 : 2006 Cri LJ 3276 (Madras)(Synergy Credit Corporation Ltd. Vs. Midland Industries Ltd.) and 1999 (3) Crimes 504 (Andhra Engineering Corpn. Vs. TCI Finance Ltd.) that merely because the accused has paid some amount of the cheque but that will not absolve him from the legal enforceable liability. This Court has also relied upon the decision of the Bombay High as cited by the opposite party as passed in Vishnu Bhat (Supra). Thus this Court is satisfied that simply because of Rs. 1 lakh was paid by the accused/revisionist after issuance of the statutory notice that is not enough to take away the right of the holder of the cheque to enforce the cause of action regarding non-payment of the residue amount.

IN THE HIGH COURT OF CALCUTTA

C.R.R. 856 of 2013 and C.R.A.N. 1728 of 2016

Decided On: 06.12.2016

Jahangir Molla  Vs.  Md. Alim Mallick and Ors.

Hon'ble Judges/Coram:

Indrajit Chatterjee, J.

Citation: MANU/WB/1132/2016

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Questions and answers on law Part 8

Q1)Who is holder in due course of negotiable instruments?

Ans :-Central Government Act

Section 9 in The Negotiable Instruments Act, 1881

9. “Holder in due course”.—“Holder in due course” means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if 1[payable to order], before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.

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Whether the court can hold surety liable for the dishonour of cheque if the complainant has failed to prove that accused had issued cheque toward liability of principal debtor?

Complainant in cross-examination further disclosed that he received the cheque Ex. 15 from Srushti Financer. However, there is no material on record nor it is the case of the complainant that any liability of Rs. 14,50,000 was existing against Srushti Financer and same is accepted by the accused and issued cheque Ex. 15 for discharging liability of Srushti Financer. No any document is placed on record by complainant to show any relation of the accused in respect of any loan transaction between the complainant and Srushti Financer. It is also not case of the complainant that accused accepted the liability of Srushti Financer and issued the cheque. No any document creating the liability of the accused is produced on record. If the cheque is drawn by the accused without accepting liability of another in writing, it does not attract Section 138 of N.I.Act. In this regard, reliance can be placed on the case of Hiten Sagar & Anr. v. IMC Ltd. & Anr. MANU/MH/0276/2001 : 2001 (3) CCC 571 (Bom.) : 2001 Cri. LJ 4311 wherein this Court has held that:

If the cheque drawn for discharge of liability of another person without creating any document, it does not come under section 138 of N.I.Act.

6. So, in view of the above reason, it is clear that on the date of cheque Ex. 15, no any evidence liability was existing against the accused and no any evidence that liability on the date of cheque was existing against the Srushti Financer and same was accepted by the accused and hence he issued the cheque.

IN THE HIGH COURT OF BOMBAY

Criminal Application No. 3661 of 2007

Decided On: 24.04.2008

 Nandkishore Mehra  Vs.  Sudhir Transport Ltd. and Ors.

Hon'ble Judges/Coram:

V.K. Tahilramani, J.

Citation: MANU/MH/1616/2008

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Whether offence of dishonour of cheque is made out if cheque is issued in pursuance of agreement of sale?

We find ourselves unable to accept the finding of the learned Single Judge of the High Court that the cheques were not issued for creating any liability or debt, but 'only' for the payment of balance consideration and that in consequence, there was no legally enforceable debt or other liability. Admittedly, the cheques were issued under and in pursuance of the agreement to sell. Though it is well settled that an agreement to sell does not create any interest in immoveable property, it nonetheless constitutes a legally enforceable contract between the parties to it. A payment which is made in pursuance of such an agreement is hence a payment made in pursuance of a duly enforceable debt or liability for the purposes of Section 138.

IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 483 of 2019 

Decided On: 13.03.2019

 Ripudaman Singh  Vs. Balkrishna

Hon'ble Judges/Coram:

Dr. D.Y. Chandrachud and Hemant Gupta, JJ.

Citation: 2020(1) MHLJ 928

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Whether trial court can look in to merits of dispute involved at the stage of filing of summary suit?

 The trial Court at the stage of entertaining the suit cannot look to the merits of dispute involved and the probable defences that would be taken by the defendants and come to the conclusion that the suit involves complicated disputed questions of fact and triable issues. The trial Court cannot return such finding unless notice is served upon the defendants and his version comes on record in the shape of an application seeking leave to defend. As is appropriately provided in Rule 3 that the defendant, if within ten days from the date of service of summons for judgment, by affidavit or otherwise discloses such facts as the Court deems sufficient to entitle him to defend, the Court may grant him leave to defend either unconditionally or upon such term as may appear to the Court to be just. It is perhaps at this stage, the Court would try the suit in the same manner as is done in suits instituted in the ordinarily manner. As rightly submitted by the petitioner appearing in person, the trial Court jumped the gun and erroneously treated the suit as a regular suit.

10. I have carefully gone through the provisions of Order 37 CPC and find that nowhere in the order, a power is conceded in favour of the trial Court to refuse to treat the suit based on cheque and otherwise complying with the provisions of Order 37 CPC Rule 2 as summary suit triable under Order 37 CPC and treat the same as a regular suit. In my considered opinion, learned trial Court has exercised the jurisdiction not vested in it and has consequently caused serious mis-carriage of justice. The right of the plaintiff to have his suit tried in summary manner is a vital right conferred under Order 37 CPC and said right cannot be trampled by overstepping the jurisdiction and taking the view which is not countenanced in law. This Court, thus, finds it a fit case for exercising the supervisory jurisdiction vested under Section 104 of the Constitution of J & K.

IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU

CR No. 30/2018

Decided On: 05.09.2018

 Rajesh Madanlal Anand  Vs.  Rakesh Madanlal Anand and Ors.

Hon'ble Judges/Coram:

Sanjeev Kumar, J.

Citation: AIR 2019(NOC)228 (J&K)

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Whether court should dismiss complaint for dishonour of cheque if cheque amount is more than amount due?

 However, the learned Trial Court found contradiction in the

number of cartons in the complaint as well as in the statement of

the appellant. It was found that the cheque amount is more than

the amount allegedly due on the date when cheque was

presented, therefore, the complaint was dismissed. It held that

there are three different versions as to the number of apple

cartons, therefore, the alleged amount would have been less than

the amount claimed by the complainant.

Once the agent of the respondent has admitted the settlement of

due amount and in absence of any other evidence the Trial Court

or the High Court could not dismiss the complaint only on account

of discrepancies in the determination of the amount due or oral

evidence in the amount due when the written document

crystalizes the amount due for which the cheque was issued.

28. The accused has failed to lead any evidence to rebut the statutory

presumption, a finding returned by both the Trial Court and the

High Court. Both Courts not only erred in law but also committed

perversity when the due amount is said to be disputed only on

account of discrepancy in the cartons, packing material or the rate

to determine the total liability as if the appellant was proving his

debt before the Civil Court. Therefore, it is presumed that the

cheques in question were drawn for consideration and the holder

of the cheques i.e., the appellant received the same in discharge

of an existing debt. The onus, thereafter, shifts on the accusedappellant

to establish a probable defence so as to rebut such a

presumption, which onus has not been discharged by the

respondent.

29. Learned counsel for the respondent has referred to the judgment

reported in M. S. Narayana Menon v. State of Kerala 9 (2006) 6 SCC 39 that evidence adduced by the complainant can be relied upon to rebut

the presumption of consideration. However, said judgment has no

applicability to the facts of the present case as the Trial Court has

found that the presumption is not rebutted but still the Trial Court

dismissed the complaint for the reason that the appellant has

failed to prove the amount mentioned in the cheque as due

amount. Once the cheque is proved to be issued it carries

statutory presumption of consideration. Then the onus is on the

respondent to disprove the presumption at which the respondent

has miserably failed.

30. In Kumar Exports evidence to rebut the presumption was led and

accepted by the Court. In these circumstances, it was held that

the burden shifts back to the complainant and the presumption

under the Act will not again come to his rescue. However, in the

present case, the presumption of consideration has not been

rebutted by the respondent even on the basis of the evidence laid

by the appellant. The difference in the number of cartons supplied

or the rate charged is not relevant when the accounts were settled

in writing to rebut the presumption of consideration of issuance of

a cheque.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1545 OF 2019

UTTAM RAM  Vs DEVINDER SINGH HUDAN 

HEMANT GUPTA, J.

Dated:OCTOBER 17, 2019.

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Whether burden of proof is on accused to prove how leaves of cheque entered into hands of complainant?

As far as the present case is concerned, in

addition to three reasons, given by the High Court, we

are of the view that the original appellant has not even

explained how the leaves of the cheque entered into the

hands of the complainant. It is urged that in cross examination

of the complainant some suggestions were made

that since the complainant was visiting the office of the

original appellant, he had access to the same. The

complainant had only admitted that he visited the office

of the original appellant but he denied all the other

suggestions. Thereafter, it was for the original

appellant to prove his part of the case.

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.664 OF 2012

M. ABBAS HAJI  Vs T.N. CHANNAKESHAVA 

Author: DEEPAK GUPTA, J.

Dated: September 19, 2019
Citation: (2019) 9 SCC 606

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Whether complaint for dishonour of cheque is maintainable if cheque is issued for discharging time barred loan?

The controversy in the case on hand is squarely covered by the aforesaid judgment of the Division Bench of this court. The cheque issued for discharging liability for a time barred loan would constitute a fresh promise and consequently liability under Section 138 of the N.I. Act in the event of dishonor of such cheque will have to be fastened on the defaulter. It is not in dispute that loan was sanctioned in the year 2003. Respondent No. 1 has not seriously assailed issuance of cheque by him on 7.9.2009. The cheque issued amounts to promise within the meaning of Section 25(3) of the Contract Act and on account of dishonor of such a cheque, complaint under Section 138 of the N.I. Act would be maintainable.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Criminal Appeal No. 72 of 2013

Decided On: 20.01.2017

 Pragati Credit Co-operative Society Ltd. Vs.  Suresh and Ors.

Hon'ble Judges/Coram:

Indira Jain, J.

Citation: 2017 ALLMR (CRI) 3081

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Whether consolidated complaint for dishonour of two cheques is maintainable if those cheques were issued on different dates?

It has been argued on behalf of the petitioner that a great prejudice is likely to be caused to the defence of the petitioner by such joinder of charges in one trial. This has been disagreed to the learned Counsel for respondent No. 2. I think, the learned Counsel for respondent No. 2 is right in expressing his such a disagreement. Reason being that the charge will be framed by the trial Court in such a manner as would contain two heads of offence relating to dishonour of two different cheques, and I would say that the trial Court would be well advised to do so. If this is done, the petitioner would get an ample opportunity to defend himself against the two heads of offence with which he would be charged in this case and would be in a position to prepare adequately on his defence. If it is the contention of the petitioner that the petitioner would like to advance two different kinds of defence for dishonour of these two separate cheques, even then, I do not think that any impediment in this regard would be encountered by the petitioner for the reason that the complainant would have to adduce evidence in a specific manner to prove these two different heads of offence and that will result in giving sufficient notice of allegations being made against the petitioner, which shall be enough for him to put up his different stands of defence in respect of these two separate offences. But, these two offences, as stated earlier, having been committed in one and the same transaction, would certainly require a joint trial with the aid of Section 220 of Cr.P.C., which is also a view taken in this case by the Courts below and rightly so.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Criminal Writ Petition No. 884 of 2017

Decided On: 06.02.2018

Umakant  Vs.  State of Maharashtra and Ors.

Hon'ble Judges/Coram:

S.B. Shukre, J.

Citation: 2019(2) MHLJ 618

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Whether director of company can be made accused in cheque dishonour case if cheque does not bear his signature?

 Now, turning towards the second point, it is to be noted that as regards accused nos. 02 to 12, only at two places, same statement has been made by the complainant, that they are the directors of accused no. 01, who are in-charge and responsible for the conduct of the affairs of the company. The complainant has not given what is the nomenclature and how each one of accused nos. 02 to 12 is in-charge. Admittedly, accused nos. 02 to 12 are not the signatories to the disputed cheques. In fact, in para no. 05 of the complaint, the complainant has stated that accused nos. 01 to 12 issued a cheque ..... None of them i.e. accused nos. 02 to 12 had issued that cheque but somebody else is the signatory to the cheque. This fact is also suppressed by the complainant. The learned Magistrate ought to have considered as to who is the signatory to the cheque and whether he is made an accused or not before proceeding to issue process against accused nos. 02 to 12.

IN THE HIGH COURT OF BOMBAY (AURANGABAD BENCH)

Criminal Application No. 2052 and 2055 of 2018

Decided On: 31.08.2018

 Rajeev Raj Kumar  Vs.  The State of Maharashtra and Ors.

Hon'ble Judges/Coram:

Vibha Kankanwadi, J.

Citation: 2019(2) MHLJ 628

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Whether accused in cheque dishonour case can be believed if he fails to seek return of cheque for period of seven years?

The Respondent contended that the signed blank Promissory Note was issued by him in favour of N.R.R. Finances Investments Pvt. Ltd. under a hire-purchase agreement for purchasing a lorry on loan basis. The said Promissory Note was not issued in favour of the Appellant-complainants. The Promissory Note was filled up by DW. 2 Mahesh, an employee of N.R.R. Investments, after the signatures of the Respondent were obtained on the same.

With respect to the two cheques which were dishonoured, the Respondent contended that these were amongst 10 blank cheques signed and handed over to the Appellant-K. Posa Nandhi as security, when he borrowed Rs. 5,00,000/- in 1995. That even though this loan was re-paid in 1996 with interest, the cheques were not returned. The Respondent further contended that he had issued a letter on 09.11.2002 asking the Appellants to return the 10 blank cheques.

3. The Trial Court found that the Respondent had admitted his signatures both on the Pronote and also on the two cheques for Rs. 37,00,000/- and Rs. 14,00,000/- respectively. The Respondent also admitted that the Appellant had invested capital in their concern viz. M/s. Maanihada Tea Factory.

The Court disbelieved the version of the Respondent with respect to the 10 blank cheques issued to the Appellant in 1995. The Respondent failed to place any material on record to show that he had ever asked for return of the 10 blank cheques, allegedly given by him to the Respondent, for seven years.

7. Mr. R. Basanth, Sr. Counsel appeared on behalf of the Respondent-Accused, and contended inter alia that the cheques were not issued towards discharge of a legally enforceable debt, but as a security, and that the judgment under challenge required no interference.

8. We have heard Senior Counsel for both parties, and perused the record. Under Section 139 of the N.I. Act, once a cheque has been signed and issued in favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability1. This presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan.

In the present case, the Respondent has failed to produce any credible evidence to rebut the statutory presumption. This would be evident from the following circumstances:

(i) The Respondent-Accused issued a Pronote for the amount covered by the cheques, which clearly states that it was being issued for a loan;

(ii) The defence of the Respondent that he had allegedly issued 10 blank cheques in 1995 for repayment of a loan, has been disbelieved both by the Trial Court and Sessions Court, on the ground that the Respondent did not ask for return of the cheques for a period of seven years from 1995. This defence was obviously a cover-up, and lacked credibility, and hence was rightly discarded.

IN THE SUPREME COURT OF INDIA

Criminal Appeal Nos. 950-951 of 2018 

Decided On: 31.07.2018

T.P. Murugan Vs.  Bojan

Hon'ble Judges/Coram:

Rohinton Fali Nariman and Indu Malhotra, JJ.

Citation: 2019(2) MHLJ 948

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Whether it is permissible for complainant to fill up details of cheque beyond knowledge of accused?

In other words it would be certainly unlawful if a complainant is allowed to fill up details of cheque beyond the knowledge of the accused such that filling up date and the amount in a blank cheque.

19. In this regard it would be useful to look into the decision of this Court reported in 2011 ACD 1326 (MADRAS) P. Krishnasamy v. Deltaknit Wearable's, wherein it was held that to presume under section 139 of the N.I Act due execution of Negotiable Instrument is to be proved. Due execution means not signing a cheque but mean to give a cheque in complete form towards a legally enforceable liability.

20. It would also be useful to look into a decision of Kerala High Court 2011 ACD 1136 relying upon the decision of the Hon'ble Apex Court reported in (2003) 8 SCC 745 : AIR 2004 SC 175 and (1996) 4 SCC 596 : AIR 1996 SC 2184 holding that the procedural approach as though mere production of cheque proves all the relevant facts which prosecution must establish in a prosecution is an incorrect approach.

21. Thus firstly the complainant must allege and prove the due execution of the cheque by accused and the allegations must be established by way of evidence. In the case on hand as stated above, the complainant had utterly failed to satisfy the Court that there was due execution of cheque. The figure denoting amount found to be written in different inks and the handwriting in as much as the digits and words also differs. The different ink, pen and manipulation of the amount would show that the complainant had failed to demonstrate due execution of the cheque. Therefore, I do not find any error or illegality over the impugned order of acquittal made by the lower appellate Court.

In the High Court of Madras

(Before M.V Muralidaran, J.)

E. Dhanuskodi  v.  D. Sreedhar 

Criminal Appeal No. 814 of 2011

Decided on November 8, 2018,

Citation: 2018 SCC OnLine Mad 5124

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Whether court should draw presumption U/S 139 of NI Act if execution of cheque is proved?

The learned counsel for the respondent admitted that execution of the 

cheque and also the signature found in the cheque.  Therefore, once execution 

of cheque is admitted, it is a legal presumption under Section 139 of 

Negotiable Instrument Act.  The cheque was issued for discharging legally 

enforceable debt.  No doubt the presumption is rebuttable. Though, admitted 

that the said cheque was issued for only security purpose and the respondent 

was only a working partner and he has not invested or contributed any money 

to the partnership firm.  Therefore, at the time of admitting him in the 

firm, the respondent had executed the cheque for the security purpose. 

7.Once issuance of  cheque is being admitted and even for security 

purpose, the presumption under Sections 118 and 139 of Negotiable Instrument 

Act and it is for the accused has to rebut the presumption there is no 

legally enforceable debt and cheque has not been issued for legally 

enforceable debt.  Therefore, the contention raised by the learned counsel 

for the respondent is not acceptable and the authorities submitted by the 

respondent is not applicable for present case in the hand.

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

DATED: 19.01.2019

CORAM

 MR. JUSTICE P.VELMURUGAN

Crl.A.(MD).No.179 of 2008

A.K.Mohammed Farook    Vs. M.Syed Jaheer Hussain  

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Whether bank is required to subject the cheque to minute and microscopic examination?

 In the present case, we do not find any circumstance or reason which could have caused any doubt in the mind of a prudent bank to initiate inquiries, rather the facts of the case demonstrate that the respondent-bank and the petitioners were in the same position. The mere fact that the collecting bank has made a payment to its customer who deposited the tampered cheque does not raise an estoppel against the paying bank if later on it is found that the cheque is forged. The respondent-bank was not called upon to be overtly suspicious. The standard of care expected from a banker in collecting the cheque did not require him to subject the cheque to a minute and microscopic examination. The collecting bank has its remedies against its clients for indemnification by asking them to return the money. In turn the clients, i.e., the petitioners have remedies against the drawer of the cheque or her customer to recover the amount from them as per law. 

 IN THE HIGH COURT OF DELHI AT NEW DELHI 
Date of Decision: 16th October, 2018 
 W.P. (C) No. 6778/2016 & C.M. No.27868/2016 

M/S ADYA GLOBAL EXPORT INC.  Vs CANARA BANK 

  CORAM:  MR. JUSTICE SANJIV KHANNA 
                 MR. JUSTICE CHANDER SHEKHAR 

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Whether offence of dishonour of cheque is made out if there was no legally recoverable debt on the date of issue of cheque?

On hearing the learned counsel for the parties and on evaluating the material on record, I find that there is no illegality committed by the Trial Court, which calls for interference. It is to be seen that the cheque was not issued by the accused - respondent towards a legally recoverable debt. It was issued as a security for the loan which he had borrowed from the complainant. This is further fortified by the judgment relied on by the counsel for the appellant himself in Sampelly Satyanarayana Rao (supra), which reads that,

“If on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise.”

In the High Court of Karnataka at Bengaluru

(Before K. Somashekar, J.)

Branch Manager, PCA & RD Bank Ltd., Belthangady,

v.

Suresh Das 

Criminal Appeal No. 425 of 2010

Decided on February 27, 2018

Citation: 2018 SCC OnLine Kar 492

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Whether it is mandatory to make enquiry as per S 202 of CRPC in case of dishonour of cheque?

Learned counsel further contended that the applicant is residing beyond the jurisdiction of the trial Court and, therefore, it was mandatory to conduct an inquiry in accordance with the amended provisions of Section 202 of the Code of Criminal Procedure. It was argued that although in the order issuing process there is a reference to invoking Section 202 of the Cr.P.C., no inquiry was conducted in proper perspective. In the case of National Bank of Oman (Supra), the Supreme Court has considered the aspect of carrying out such an inquiry as per the said amended provisions of Cr.P.C. The said decision is related to the offences under the Indian Penal Code. In the Judgment of this Court in the case of Netcore Solution Private Limited v. Vinay Rai MANU/DE/0170/2012 : 2012(1)Bom.C.R.(Cri.)788, it was held that the trial Court ought to have postponed the issuance of process in view of the mandatory provisions for inquiry under Section 202 of the Cr.P.C., as the petitioner therein were residents of Mumbai and the proceedings were initiated in the Court at Nagpur. The said decision was however, was related to the offence under Section 138 of Negotiable Instruments Act. This Court in several decisions have consistently taken a view that in the proceedings under Section 138 of the Negotiable Instruments Act, it is not mandatory to hold an inquiry under Section 202 of the Cr.P.C. in the event the accused are residing beyond the jurisdiction of the Court. In any case, it has to be noted that in the present case the trial Court had invoked Section 202 of Cr.P.C. which is apparent from the order issuing process. The Court has recorded the verification statement of the complainant as well as considered the affidavit filed by the complainant and, thereafter, issued the process. In the order issuing process it is observed that the accused being resident of beyond the territorial jurisdiction of the Court, inquiries under Section 202 of Cr.P.C. were held. Complainant filed affidavit in support of allegations made in the complaint and also filed ROC record and after going through the record of the case, the complaint satisfies the requisite ingredients. It is argued that the trial Court has not conducted an inquiry within the purview of Section 202 of the Code of Criminal Procedure. It is pertinent to note that no specific mode of inquiry is provided under Section 202 of Cr.P.C. Apart from that this Court has observed that it is not mandatory to hold such an inquiry in relation to the proceedings under Section 138 of the Negotiable Instruments Act. In Bansilal Kabra v. Global Trade Finance Ltd. MANU/MH/2324/2010 : 2010 ALL MR (Cri) 3168 this Court has held that if Section 202 of Cr.P.C. is made applicable to complaints under Section 138 of Negotiable Instruments Act, it would defeat the very purpose behind enactment of the said provision. The Magistrate can exercise his discretion and decide whether to issue process, dismiss the complaint after recording verification of the complainant and his witnesses, if any, or postpone the issuance of process and in a given case hold further inquiry depending on facts of each case. No compliance would not vitiate the process if there is material to indicate application of mind.

IN THE HIGH COURT OF BOMBAY

Criminal Application No. 1248 of 2016

Decided On: 13.10.2017

Vijay Tata Ravipati Vs. Mediascope Publicitas (India) Pvt. Ltd. and Ors.

Hon'ble Judges/Coram:

P.D. Naik, J.

Citation: 2018(1) MHLJ 211

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Whether prosecution for dishonour is cheque is maintainable if reminder notice is sent?

It is clear from Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act, 1872, that once notice is sent by registered post by correctly addressing to the drawer of the cheque, the service of notice is deemed to have been effected. Then requirements under proviso (b) of Section 138 stands complied, if notice is sent in the prescribed manner. However, the drawer is at liberty to rebut this presumption.

15. This Court in catena of cases has held that when a notice is sent by registered post and is returned with postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station", due service has to be presumed2. Though in process of interpretation right of an honest lender cannot be defeated as has happened in this case. From the perusal of relevant Sections it is clear that generally there is no bar under the N.I. Act to send a reminder notice to the drawer of the cheque and usually such notice cannot be construed as an admission of non-service of the first notice by the Appellant as has happened in this case.

16. Moreover the first notice sent by Appellant on 12-04-1991 was effective and notice was deemed to have been served on the first Respondent. Further, it is clear that the second notice has no relevance at all in this case at hand. Second notice could be construed as a reminder of Respondent's obligation to discharge his liability. As the complaint, was filed within the stipulated time contemplated under Clause (b) of Section 142 of the N.I. Act, therefore Section 138 r/w 142 of N.I. Act is attracted. In the view of the matter, we set aside the impugned judgment of the High Court.

IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 455 of 2006

Decided On: 01.03.2017

 N. Parameswaran Unni Vs. G. Kannan and Ors.

Hon'ble Judges/Coram:

N.V. Ramana and Prafulla C. Pant, JJ.

Citation: 2017(6) MHLJ 441

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Whether court can presume that tenant was not ready and willing to pay arrears of rent if rent is sent by cheque?

 It is true that under the ordinary law of contracts and commercial law a cheque is not legal tender (unless the creditor agrees to take it). The post-office may not be, without an agreement to the contrary, an agent of the landlord for purposes of receipt of rent paid by tenant by Postal Money Order. We must, however, consider whether the tenant was and is "ready and willing to pay" the rent to the landlord having regard to the real facts and circumstances of the case and not merely legalistic technical facts to be inferred from his conduct in sending it by Money Order, or by cheque, or in current coins of the realm. The Courts cannot assume that merely because the cheque was sent that the tenant was not ready and willing to pay the arrears of rent to the landlord. The cheque system is popular, especially with expansion in banking. Unless it is established that the person who issued the cheque had no cash in the bank account or would not be in a position to furnish cash when the cheque is presented to the Bank, it cannot necessarily be assumed that the tenant was not ready and willing to pay the arrears of rent to the landlord within the meaning of the Bombay Rent Act.

12. It may be that in general commercial law and under the old laissez-faire system of laws and administration of justice, the question of cheque being not legal tender was relevant. But when we are interpreting and applying a welfare legislation like the Bombay Rent Act, the object of the Act must be borne in mind. The object of the Act is not to help the landlord to raise technical points described by Bacon as "snares" founded on old laissez-faire notions of law and to deprive the tenant of the protection given to him by the Legislature. The tenant can pay rent to the landlord--and the landlord can ordinarily accept it by making payment either through Money Order or by cheque or by cash. The landlord must be, however, ready and willing to accept the payment. The two Courts below have completely ignored these aspects of the matter and erroneously assumed that 'ready and willing to pay' means only ready and willing to pay in cash in the coins of the realm.

13. Turning to the facts of the present case, there can be no doubt that when the tenant sent the cheque and letter, he had not neglected to pay as stated in the provisions of Section 12(3)(a). He made an effort to pay and avoid the application of that provision to the suit which may be instituted by the landlord. It can never be said, in the facts and circumstances of the present case, that notwithstanding the sending of the cheque which covered the entire dues and which was accompanied by a letter explaining why the cheque was being sent, that the tenant had neglected to make payment within the meaning of Section 12(3)(a). Negligence is the breach of a duty caused by the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do.

IN THE HIGH COURT OF BOMBAY

Special Civil Application No. 1564 of 1969

Decided On: 03.08.1972

 Marutrao Bhaurao Shelke Vs.  Akbaralli Noorbhai Bohori

Hon'ble Judges/Coram:

M.S. Vaidya, J.

Citation: 1974 MHLJ 239

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When overwriting in cheque will not amount to material alteration in cheque dishonour case?

Per contra, the learned counsel for the first respondent has argued that the said correction in one of the digits in the amount entered in figures in Ext. P1 is nothing but material alteration within the meaning of Section 87 of the NI Act. In Ext. P1 the amount has been clearly entered in words as "Rupees one lakh and fifty thousand only". The amount has been entered in figures also. It seems that in digit "0" after the digit "15", there is overwriting. The question to be considered is whether it amounts to material alteration within the meaning of Section 87 of the NI Act? Section 87 of the NI Act clearly says that such an alteration should be a material alteration. Here, an overwriting can also be categorised as an alteration. At the same time, when the amount is clearly discernible and is written in bold letters in words as "one lakh and fifty thousand only", the mere overwriting or correction in the digit "0" in the amount entered in figures in Ext. P1 cannot be treated as a material alteration within the meaning of Section 87 of the NI Act. Had there been any overwriting or corresponding correction in the amount entered in words in Ext. P1, it could have been said that it was an alteration of material nature as contemplated under Section 87 of the NI Act. When there is no corresponding correction or alteration in the amount entered in words in Ext. P1, at any stretch of imagination, it could not have been considered as a material alteration. It seems that the Court below has unnecessarily passed a judgment of acquittal in this case.

Negotiable Instruments Act, 1881 (Central Act 26 of 1881) - Section 87--Material alteration--Mere overwriting on a digit in the amount entered in figures in a cheque does not amount to material alteration, when there is no correction in the amount entered in words in that cheque.

IN THE HIGH COURT OF KERALA

Crl. A. No. 237 of 2009

Decided On: 15.07.2016

 Rajan P.K. Vs. K. Radhakrishnan and Ors.

Hon'ble Judges/Coram:

B. Kemal Pasha, J.

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