Chanda Electricals vs State of U.P. and Another

Ikram-ul-Bari, J.—M/s Chanda Electricals have applied u/s 482, Code of Criminal Procedure for the quashing of the complaint dated 23.9.1996 (Annexure-5 to the petition), the order of summoning dated 21.8.1997 (Annexure-6 to the petition) and the order dated 9.9.1998 (Annexure-8 to the petition).

The complaint was made by the opposite party No. 2 on 23.9.1996 before the Chief Judicial Magistrate, Lucknow, alleging an offence punishable u/s 13 of the Negotiable Instruments Act of 1881, on which Criminal Case No. 1250 of 1997 Pepsico India Holdings Private Ltd. v. Chanda Electricals, was registered. The learned Magistrate passed an order on 21.8.1997 summoning the applicants for trial for the offences punishable u/s 420, I.P.C. and Section 138 of the Negotiable Instruments Act. The applicants moved an application dated 20.12.1997 before the learned Magistrate for cancellation of the order of summoning firm and for his discharge and also for dismissal of the complaint.

The learned Magistrate heard the parties and passed an order dated 9.9.1998 rejecting the application dated 20.12.1997 for recall etc.

The applicants have stated in petition u/s 482, Code of Criminal Procedure as they had stated before the Magistrate, that the opposite party No. 2 had approached them for supply of a Sony Camera of the desired model on 19.6.1996, and a quotation for Sony Camera Model No. TR-385 EU for Rs. 41,500 was given to it that on 27.6.1996 Mr. Atul Khosla on behalf of opposite party No. 2 had given a bank draft for Rs. 40,200 as advance towards the price of the said Camera, that on 1.7.1996 the applicant, informed Mr. Khosla that the Camera of the desired model was not available, that a Cheque No. 620098 dated 2.7.1996 was drawn on the Dena Bank, Hazratganj, Lucknow, for Rs. 40,200 and it was given to Mr. Khosla that despite that Mr. Khosla insisted that since sanction had been obtained for procuring Camera through the applicants the effort to find the desired Camera be continued; that on 4.7.1996 Mr. Khosla informed the applicants that the Camera of the desired model was available at Sahu Agencies, Hazratganj, Lucknow, and insisted that the same be purchased with the money already advanced, with a promise to return the cheque to the applicant; that on 4.7.1996 the applicant purchased the Camera from the Sahu Agencies in the name of Mr. Atul Khosla and made the payment by Bank Draft No. 4060781 for Rs. 39,500 of the same date; that Mr. Atul Khosla was immediately informed of the purchase and was requested to take the delivery; that on 5.7.1996 Mr. Atul Khosla took the delivery of the said Camera, but in the evening of that day left that Camera at the shop of the applicant with an incorrect allegation that the said Camera was defective : that the applicant tried to explain to Mr. Khosla that the Camera had been purchased on his insistence in his name and its price had been paid and it was no more possible to return the Camera to the Sahu Agencies and get back the money from them; that the applicant also requested Mr. Khosla to return the cheque dated 2.7.1996; that Mr. Khosla refused to return the said cheques; that the applicant informed Mr. Khosla on telephone and by letter dated 17.7.1996 sent under certificate of posting that he is issuing directions to the bankers to stop the payment of the cheque; that the bank was directed accordingly; that even then Mr. Khosla presented the said cheque for encashment, but the bank returned it to him on 25.7.1996 with the endorsement that the payment had been stopped by the drawer; that thereafter a notice on behalf of opposite party No. 2 was received by the applicants on 7.8.1996 asking him to pay the face value of the cheque; that the said notice was replied suitably on 28.8.1996 explaining that the liability in respect of the cheque already stood discharged on purchases of the Camera, the delivery of which was initially taken by Mr. Khosla on 5.7.1996 after satisfaction, and no case u/s 138 of the Negotiable Instruments Act was made out.

The learned Chief Judicial Magistrate considered the respective pleas of the applicant, and the opposite party No. 2 and, observing that the contention of the applicants can be examined during the trial, dismissed the application for recall of the summoning order etc.

Opposite party No. 2 has not filed any reply to the petition. During the course of the arguments, the opposite party relied upon the case of Modi Cement Limited v. Shri Kuchil Kumar Nandi 1998 JIC 418 (SO. In that case it has been held that even if the cheque is dishonoured because of the stop payment direction, the case falls u/s 138 of the Negotiable Instruments Act.

However, the facts of the case before the Hon''ble Supreme Court were different. In that case three cheques had been issued for an existing liability and thereafter the bank was directed to stop the payment. The only consideration was whether such direction under such circumstances brought the case u/s 138 of the Negotiable Instruments Act or not.

In the present case the cheque was issued on 2.7.1996 with an understanding that there will be no more compliance with the request of opposite party No. 2 for supply of the desired Camera. Thereafter, it was on the insistence of opposite party No. 2 that a Camera was purchased and delivered to opposite party No. 2. The purchase was in the name of opposite party No. 2 authorised agent and was made on the request of the authorised agent, who had already inspected the Camera at Sahu Agencies. Why the Camera was returned by opposite party No. 2 is a controversial issue and it may amount to a civil dispute. There is no other explanation why the Camera was so purchased. The cheque stood discharged when the advance had already been utilised. The complaint for action for the offence punishable u/s 138 of the Negotiable Instruments Act, 1881 was, therefore, misconceived.

We, therefore, quash the complaint and all the proceedings in Criminal Case No. 1250 of 1997 before the Chief Judicial Magistrate, Lucknow. The applicant shall stand discharged.