O.T.G. Global and Another vs Shyamlal Khatri and Another

T.P. Sharma, J.—By this petition, the Petitioners have challenged legality and propriety of the order dated 4-3-2004 passed by the Judicial Magistrate First Class, Durg in Criminal Case No. 594/2002, whereby the objection relating to taking cognizance of offence filed on behalf of the Petitioners/accused has been dismissed.

Order is challenged on the ground that learned Judicial Magistrate First Class has not considered the application substantially supported by the document to show that without any material the Court below has taken cognizance and thereby caused serious prejudice to the Petitioners.

I have heard learned Counsel for the parties, perused the order impugned and other copies of documents.

Learned Counsel for the Petitioners argued that the present Petitioners were required to disclose liability of Rs. 1 lakh to Respondent No. 1 and the cheque in dispute was issued by the Petitioner, but afterwards one demand draft dated 5-10-2001 of Rs. 1 lakh was sent to Respondent No. 1 in discharge of liability which was encashed by Respondent No. 1. The present Petitioners have also issued notice dated 10-10-2001 and intimated Respondent No. 1 that they have discharged the liability arose on the basis of aforesaid cheque, therefore, the cheque should be returned to them and also directed the Bank to stop payment. But Respondent No. 1 instead of returning the cheque presented the same for encashment before the Bank which was returned unpaid and notice was issued, and finally complaint u/s 138 of the Negotiable Instruments Act, 1881 (for short ''the Act'') was filed against the Petitioners. After making inquiry under Chapter XV of the Code of Criminal Procedure, 1973 the Court below has taken cognizance of the offence and issued process against the present Petitioners. After receiving notice the Petitioners have filed objection on the basis of the aforesaid documents, but the Court below has declined to recall the order taking cognizance and issuance of process.

Learned Counsel for the Petitioners submits that in absence of any liability to pay amount, the Judicial Magistrate First Class was not empowered to take cognizance and issue process against the Petitioners. The Court below has committed illegality and caused serious prejudice to the Petitioners. Learned Counsel placed reliance in the matter of K.M. Mathew Vs. State of Kerala and another, in which the Apex Court has held that there is no bar to drop proceedings against any of the accused persons, if complaint does not prima facie disclose any offence against him. Learned Counsel further placed reliance in the matter of Rukmini Narvekar Vs. Vijaya Satardekar and Others, in which the Apex Court has held that "there is no scope for the accused to produce any evidence in support of the submissions made on his behalf at the stage of framing of charge and only such material as are indicated in Section 227 Code of Criminal Procedure can be taken into consideration by the Magistrate at that stage. However, in a proceeding taken therefrom u/s 482 Code of Criminal Procedure the Court is free to consider material that may be produced on behalf of the accused to arrive at a decision whether the charge as framed could be maintained". Learned Counsel also placed reliance in the matter of Adalat Prasad v. Rooplal Jindal and Ors. AIR 2004 SC 4674 in which it has been held by the Apex Court that after issuance of process against the accused recalling of process by Magistrate is without jurisdiction, only remedy is available u/s 482 of the Code of Criminal Procedure, Learned Counsel further placed reliance in the matter of S. Ashok and Another Vs. Vasudevan Moosad, in which it has been held by the Kerala High Court that cheque returned with endorsement "stop payment", in absence of any allegation relating to dishonour of cheque for want of sufficient funds, offence u/s 138 of the Act not made out. Learned Counsel further submits that at the relevant time the law applicable was the pronouncement made by the Apex Court in the matter of K.M. Mathew (supra), therefore, the Magistrate was under obligation to recall the process.

On the other hand, learned Counsel for Respondent No. 1 supported the order impugned and submitted that after issuance of process the Magistrate is not competent to recall the order and even the Magistrate is not competent to consider the documents and material filed on behalf of the accused. Learned Counsel further submitted that Respondent No. 1/complainant has not admitted in his complaint that the Petitioners have discharged the liability arose under the disputed cheque, therefore, the Court below has rightly dismissed the objection filed on behalf of the Petitioners.

In the present case, Respondent No. 1 has not admitted the fact that by issuing the demand draft the present Petitioners had discharged their liability arose under the cheque in dispute. On the basis of the material produced on behalf of the complainant the Court below has taken cognizance of the offence against the Petitioners.

As regards maintainability of the complaint on the ground of dishonour of cheque on the direction of "stop payment" made by the drawer of the cheque, the order passed by the Kerala High Court in the matter of S. Ashok (supra) is no longer a good law in the light of pronouncements by the Apex Court in the matters of M/S Modi Cements Limited Vs. Shri Kuchil Kumar Nandi, , M.M.T.C. Ltd. and Another Vs. Medchl Chemicals and Pharma (P) Ltd. and Another, and M/s. Electronics Trade and Technology Development Corpn. Ltd., Secunderabad Vs. M/s. Indian Technologists and Engineers (Electronics) Pvt. Ltd. and another, in which the Apex Court has held that dishonour of cheque on the ground of stop payment is dishonour of cheque within the meaning of Section 138 of the Act and the Court is competent to take cognizance, however, accused may contest the case on the ground that the direction for "stop payment" was on the basis of non-existence of debt or liability, but only on that basis quashment of complaint is not possible.

As regards the question of non-existence of liability, Respondent No. 1 has not accepted the defence taken by the Petitioners and in absence of such admission it is not possible to hold that the Petitioners have discharged the liability arose under the cheque in dispute. On the date of order impugned the law declared by the Apex Court in the matter of K.M. Mathew (supra) was applicable, but they said law has been overruled by the Apex Court in the case of Adalat (supra). Therefore, recalling of any order would be without jurisdiction.

Learned trial Court has rightly rejected the objection filed on behalf of the Petitioners. Learned Court below has not committed any illegality warranting any interference in exercise of extra ordinary inherent jurisdiction.

Consequently, the petition is liable to be dismissed and it is hereby dismissed.

Interim order dated 8-4-2004 stands vacated.