ORDER
K.S. Kumaran, J.
1. Respondent filed a complaint under Section 138 of the Negotiable Instruments Act and Section 420, I.P.C. on the file of Chief Judicial Magistrate, Karnal against Messrs, Ashok Kumar Rajesh Kumar through its proprietors Ashok Kumar Rajesh Kumar. The respondent complaint has alleged in the complaint as follows: —
The complainant is proprietor of the finance company “Sachdeva Enterprises”. In Nov., 1992, both the accused approached the complainant with a request for Rs. 40,000/-, whereas the complainant gave them Rs. 25,000/- in cash as loan. The accused promised that they will be able to return the same in the first week of March, 1993, and issued an Advance-chaque bearing No. 019440) dated 1-3-1993 for Rs. 25,0007- in favour of the complainant payable at Central Bank of India at Chaura Bazar, Karnal. The accused who had issued the cheque above-mentioned in order to discharge their laiability in the month of Nov., 1992, requested the complainant to present it in the 1st week of March, 1993. The same was presented by the complainant to his bankers-Punjab National Bank at G. T. Road, Karnal on 1-3-1993 for collection, and the same was returned with the remarks “Funds insufficient”. A written notice was issued to the accused on 5-3-1993 demanding payment under Regd. cover which was received by Sh. Rajesh Kumar. The complainant received reply dated 22-3-1993. The accused have committed an offence under Section 138, Negotiable Instruments Act and under Section 420, Indian Penal Code.
2. The Chief Judicial Magistrate, Karnal, after recording the prediminary evidence, found that there are sufficient grounds for proceedings against the accused for having committed an offence punishable under Section 138 of the Negotiable Instruments Act and ordered them to be summoned for 15-5-1993. The petitioner has approached his Court for quashing the complaint (Annexure P-1) and the summoning order (Annexure P-2) dated 15-4-1993.
3. The main grounds alleged by the petitioner in this petition under Section 482 of the Code of Criminal Procedure are as under: —
(i) the cheque was never signed and issued by the present petitioner.
(ii) the petitioner has not taken any loan from the respondent but the father of the petitioner had taken a loan and the cheque was issued as a collateral security.
(iii) the cheqe in question was totally blank at the time of the issuance of the same.
(iv) the entire amount has already been paid.
(v) that no offence under Section 138 of the Negotiable Instruments Act is made out against the petitioner as the cheque in question was a post dated one.
(vi) that the complaint is silent about the purpose for which the cheque was issued.
(vii) that the liability is only a civil one;
(viii) that the chances of conviction are bleak.
4. Though notice was issued to the respondent and the respondent is represented by counsel, no reply has been filed on behalf of the respondent. But the learned counsel for the respondent stated that he will advance arguments in support of the case of the respdt.
5. I have heard the counsel for the parties and perused the record.
A perusal of the complaint shows that in Nov., 1992, the petitioner/accused approached the respondent/complainant for a loan of Rs. 40,0007 that the respondent advance Rs. 25,0007- and that the petitioner issued a post dated cheque for Rs. 25,0007- bearing the date as 1-3-1993 requesting the respondent to present the cheqaues for collection in the first week of March 1993. According to the respondent, the cheque was presented for collection on 1-3-1993 but was returned with the endorsement “Funds insufficient”. In proceedings under Section 482, Code of Cr. Procedure, to quash the complaint and the sumoning order, this Court is not to examine the complaint critically with the object of finding out the truth or otherwise of the allegations found therein. The law is settled that this Court has to see whether there are sufficient grounds to hold that prima facie there are grounds for presuming the commission of a cognizable offence. Therefore, the contention put forth by the petitioner that they had not borrowed any loan from the complainant that they had not signed and issued any cheque, that the cheque was only in balnk and was given only as a collateral security for the loan taken by the father of the proprietor of the firm have not to be gone into and decided in these proceedings. The learned counsel for the respondent contends that the contention of the petitioner that the cheque was issued in connection with some other transactions and not to discharge the debt or other liability to the respondent, and as such, the case did not fall under Section 138, Negotiable Instruments Act, has to be proved by the petitioner. In support of his contention, the learned counsel for the respondent relies upon the decision in Adapa Bhogi Raju v. S.G. Ramayya, (1994) 3 Rec Cri R 366 (Andh Pra) which supports this contention of the learned counsel for the respondent. So far as the contention of the petitioner that the amount has been repaid is concerned, the learned counsel for the respondent contends here again that the onus is on the drawer to prove that there was, in fact, no liability. In support of this contention he relied upon the decision of this Court in Banarasi Dass v. Mohinder Kumar, (1994) 1 Rec Cri R 220 which supports this contention of the learned copunsel for the respondent. Further, as pointed out already, this Court at this stage is not to critically examine these contentions put forward by the petitioner. The contention of the petitioner that the purpose of the loan has not been mentioned in the complaint is also not correct since a perusal of the complaint shows that they are alleged to have taken this loan for their busienss.
6. The main contention put forward by the petitioner is that even according to the allegations in the complaint, the cheque was a post dated cheque and, therefore, the instrument issued by the petitioner if at all is only a bill of exchange and had not become a cheque,and, therefore, the provisions of Section 138 of the Negotiable Instruments Act are not attracted in this case, and that the remedy of the respondent is only by way of a civil suit. In this connection, the learned counsel for the petitioner relied upon the decision of this Court in Rama Gupta v. Bakeman’s Home Products Ltd., (1992) 3 Rec Cri R 141 : 1993 Cri LJ 744 where it was held that if a cheque issued by the accused to clear an outstanding liability is dishonoured by the bank, it is only a breach of promise and a civil liability and no offence is made out. But this decision will be inapplicable to the facts of the case on our hand. In the above case relied upon by the learned counsel for the petitioner, the accused were authorised distributors and dealers for the biscuits and confectionary manufactured by the complainant. As per orders received by the accused from time to time, the complainant had been supplying goods to the accused. On 26-8-1989, the accused agreed to clear the outstanding amount of the complainant against the goods received by the accused through cheques of Rs. 10,0007- every month. Accordingly, a cheque dated 30-6-1990 for Rs. 10,0007- was issued by the accused in favour of the complainant as part payment towards the outstanding amount due from the accused. This cheque when presented for collection was returned by the bank with the remarks. “Stop payment.” Therefore, we see that in that case the cheque in question was issued with reference to a pre-existing liability whereas in the present case the allegation in the complaint is that in November, 1992, the petitioner took a loan of Rs. 25,0007- from the respondent and issued a post dated cheque bearing the date 1-3-1993 with a request to the respondent to present it for col lection in the first week of March, 1993. The complaint also shows that the same was presented on 1-3-1993 but was returned with the remarks “Funds insufficient”. So, it is clear that the cheque in question was not issued for the purpose of discharging a pre-existing liability and that the payment was also not stopped. The respondent had presented it for collection and the same had been returned with the remarks “Funds insufficient”. Therefore, thisdecision relied upon by the petitioner has got no application to the facts of the present case. Even otherwise, as pointed out already, the burden is upon the accused to prove that the chegue was issued for some purpose other than the one alleged in the complaint and that it was issued for the discharge of preexisting liability. That is a matter which cannot be decided in these proceedings. Another main contention put forward by the petitioner is that it is a post dated cheque and, therefore, it is only a bill of exchange and, therefore, there can be no presumption that the petitioner had any dishonest intention at the time of issuing the cheque. In this connection, the learned counsel for the petitioner relied upon a decision of this Court in Khushi Ram v. Kewal Kalra, (1991) 1 All Cri LR 965. That was a case where from the averments made in the complaint it was found that the cheque has been given to make part payment of the price of the goods purchased, and was a post-dated cheque. It was held that the dishonouring of the cheque in such circumstances cannot be held to be a criminal act. This Court further held as follows:
From the dishonouring of the cheque, a presumption cannot be drawn that the drawer had dishonest intention at the time of issuing the cheque. From the facts stated in the complaint, no criminal liability is made out. It is purely a matter of civil nature and the continuation of the complaint in order to enforce the payment of the cheque will tantamount to prosecution of the proceedings in the Court of the Magistrate for an oblique motive. It amounts to abuse of the process of the Court.
So holding, the complaint and the consequential order were quashed. But the Hon’ble Supreme Court had occasion to consider the question whether the provisions of Section 138, Negotiable Instruments Act are applicable to the post dated cheques in the case of Anil Kumar v. Gulshan Rai, (1994) 1 Rec Cri R 150. That was a case where this High Court relying on the judgment of the learned single Judge of the Madras High Court in Babu Xavier v. Lalchand Munoth, 1990 TLNJ (Cri) 121, quashed the criminal complaint against the respondent. The Madras High Court held that a cheque is drawn on the date when the drawer signs the cheque, complete in its form. On such an interpretation, it was held that cheques post dated or ante dated beyond the period of six months from the date the cheque bears would be out of the purview of Section 132 of the Act. The Hon’ble Supreme Court did not agree with the reasoning and conclusions reached by the Madras High Court, which were followed by the learned single Judge of this Court, but agreed with the reasoning of the Division Bench of the Kerala High Court in Manoj K. Seth v. Fernandez, (1991) 2 Ker LT 65 : 1991 Cri LJ 3253. The observations of the Kerala High Court disagreeing with the view taken in Babu Xavier’s case (supra) have also been extracted in this judgment of the Hon’ble Supreme Court and are as follows: —
Interpretation of Section 138 of the Act to discover the liability arising from dishonouring of a post-dated cheque has to be with due regard to the said character of post-dated cheque and the scope of clause (a) of the proviso to Section 138 cannot be considered in isolation. The statute has to be construed with reference to the context and other clauses of Act to make it consistent with it. The very object of the provision is to enhance the acceptability of cheques by making the drawer liable for penalty in case the cheque bounces for the reasons mentioned in the said Section If a post-dated cheque is considered to be drawn on the date of its delivery, the drawer of such a cheque can defeat Section 138 of the Act by showing a date beyond six months of its delivery. In the circumstances, an interpretation which will bring about such a result cannot be adopted. The object of the section is to make drawer of the cheque subject to penalty when the cheque bounces on the ground mentioned in the Section The rigour of the section itself reveals the intention of the legislature. Enough safeguards are provided in the section itself to protect honest drawers. Offences under Section 138 of the Act would be committed only when acheque drawn for payment of any debt or liability is returned by the bank unpaid and drawer fails to make payment of the said amount within 15 days of notice of dishonour. One of the elements to be satisfied is the cheque should have been returned unpaid. It goes without saying such return of the cheque by the drawee could only be on presentation; that is when he is capable of presenting the same for encashment. In the case of post-dated cheque as noted early, the same can be presented only on or after the date of the cheque. The question as to when a post dated cheque can be considered to have been drawn for the purpose of Section 138 of the Act cannot be dealt with independently of the right to present the same. In relation to the drawer and drawee post-dated cheque becomes operative only from the date of the cheque when alone the same is intended to be honoured. Post-dated cheque for the purpose of clause (a) of the proviso to Section 138 of the Act has to be considered to have been drawn on the date it bears and in this case, since the cheque was presented within six months of the date of the cheque it cannot be said that the condition in the said proviso is not satisfied.
Further analysing both the judgments, the Hon’ble Supreme Court held as follows: —
We do not agree with the reasoning and the conclusion reached by the Madras High Court which have been followed by the learned single Judge of the Punjab and Haryana High Court in the impugned judgment. Both the High Courts felt into patent error in holding that the provisions of Section 138 of the Act are not applicable to the post-dated cheques. The interpretation placed by the High Courts on Section 138 of the Act is not only contrary to the plain language of the various provisions of the Act but is also contrary to the Objects and Reasons of the Amendment Act. The said interpretation, if accepted, would defeat the very purpose of inserting Chapter XVII in the Act.
The Supreme Court further observed as follows:
The post-dated cheque is not payable till the date which is shown on the face of the said document. It will only become cheque on the date shown on it and prior to that it remains a bill of exchange under Section 5 of the Act. As a bill of exchange post-dated cheque remains negotiable but it will not become a “cheque” till the date when it becomes “payable on demand”….
…When a post-dated cheque is written or drawn it is only a bill of exchange and as such the provisions of Section 138(a) are not applicable to the said instrument. The post-dated cheque becomes a cheque under the Act on the date which is written on the said cheque and the six months’ period has to be reckoned for the purposes of Section 138(a) from the said date. One of the main ingredients of the offence under Section 138 of the Act is, the return of the cheque by the bank unpaid. Till the time the cheque is returned by the bank unpaid, no offence under Section 138 is made out. A post-dated cheque cannot be presented before the bank and as such the question of its return would not arise. It is only when the post-dated cheque becomes a “cheque” with effect from the date shown on the face of the said cheque, the provisions of Section 138 come into play. The net result is that a post-dated cheque remains a bill of exchange till the date written on it. With effect from the date shown on the face of the said cheque it becomes a “cheque” under the Act and the provisions of Section 138(a) would squarely be attracted. In the present case the postdated cheques were drawn in March 1990 but they became “cheques” in the year 1991 on the dates shown therein. The period of six months, therefore, has to be reckoned from the dates mentioned on the face of the cheques.
Even otherwise we agree with the reasoning adopted by the Division Bench of the Kerala High Court. Section 138 has to be construed with reference to the context. If the object of bringing Section 138 of the Act on the statute has to be fulfilled then the only interpretation which can be given to clause (a) of proviso to Section 138 of the Act is that a post-dated cheque shall be deemed to have been drawn on the date it bears.
7. So, it is clear that though a post-dated cheque was issued, it was merely a bill of exchange till the date it bears. From that date onwards it becomes a cheque and the offence is committed only when the cheque is returned unpaid. Therefore, the reliance placed upon by the learned counsel for the petitioner on the decision of this Court in Khushi Ram’s case 1991 (1) All Cri LR 965 (supra) cannot help him. The petitioner, by saying that on the date when the cheque was signed there was no dishonest intention on his part, cannot claim that no offence is made out Therefore, taking into consideration all these aspects I find that there are no grounds for quashing the complaint or the summoning order and this petition has to fail. However, it shall be open to the petitioner to take all the pleas that are-open to him under the law in resisting the complaint.
8. Accordingly this petition is dismissed.