H N SUDESH KUMAR Vs. BEARDSELL LIMITED

JUDGEMENT

(1.) Petitioner is the accused in C.C.No.18592/2012 on the file of XVI ACMM, Bangalore. He has filed this petition to quash the proceedings initiated against him on the ground that one cheque issued by him to the respondent had come back with an endorsement that joint signature is required. Sofar as the other cheque which had come back for the reason 'insufficient funds', no prosecution was initiated after issuance of demand notice. In other words, the prosecution initiated by the respondent-complainant on account of dishonour of both the cheques is not maintainable and hence, the petitioner sought to quash the proceedings.

(2.) The facts in brief as alleged are that towards the discharge of legal liability, the accused issued two cheques in favour of the complainant for Rs.2.00 lakh dated 14.7.2011 and for Rs.5.00 lakhs dated 10.8.2011 marked as Ex-P1 and P12. On presentation of both the cheques, the first cheque marked as Ex-P1 for Rs.2.00 lakh was returned with an endorsement 'drawer's signature not as per mandate'. The second cheque was dishonored for the reason 'funds insufficient'. After receipt of the endorsement to that effect from the bank, the complainant issued demand notice to the accused informing the factum of dishonour of the cheques and calling upon the accused to pay the cheque amount(as per Ex-P3). Since there was no response, the complainant filed a private complaint before the XVI ACMM, Bangalore.

(3.) The submission of the learned counsel appearing for the petitioner-accused is that the cognizance for the offence under section 138 of N.I. Act can be taken by the Magistrate only when the cheque returned by the bank unpaid either because of the amount of money standing to the credit of that account of the accused 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. In the case on hand, the first cheque is returned for the reason 'that the drawer's signature is not as per mandate' and as such, the prosecution under section 138 of N.I. Act initiated on the basis of the said cheque is liable to be quashed. The other submission of the learned counsel for the accused is that the second cheque for Rs.5.00 lakh was returned with an endorsement 'funds insufficient'. That after dishonour of the cheque, the complainant issued a demand notice informing the accused the factum of dishonor of the cheque and calling upon him to pay the cheque amount and on his failure to respond to the notice or on failure to pay the cheque amount within the stipulated period of time, the complainant did not prosecute the accused. On the other hand, the complainant again presented the same cheque for collection. Again it came to be dishonoured. The complainant issued demand notice and failure on the part of the accused to pay the cheque amount in response to the demand notice within the stipulated period of time, the complainant instituted the prosecution which according to the accused is impermissible in law and therefore, the prosecution initiated on the basis of presentation of the cheque for second time is liable to be quashed. He placed reliance on the decision of the Supreme Court reported in the case of Sadanandan Bhadran vs- Madhavan Sunil Kumar, 1998 6 SCC 514 in support of his submission. On the other hand, the learned counsel for the complainant relying upon the decision of the Supreme Court in a case of MSR Leathers vs- S. Palaniappan and another, 2013 10 SCC 568 would submit that the decision of the Supreme Court in Sadanandan Bhadran's case has been overruled by the Supreme Court in the decision citedand as such there is no substance in the submission made by the learned counsel for the accused in that regard.