JUDGMENT
M.L. Singhal, J.
1. This is a criminal miscellaneous petition filed under Section 482 of the Code of Criminal Procedure, 1973, whereby the petitioner (Dr. P. N. Pandit) has sought the quashing of the complaint annexure P-6. For the appreciation of the claim of the petitioner for quashing of the complaint annexure P-6, it would be useful to notice the facts of the complaint annexure P-6.
2. The petitioner, Dr. P. N. Pandit, was a tenant of the entire first floor of House No. 3832, Sector 32-D, Chandigarh, belonging to Anil Joshi–respondent (complainant) on a monthly rent. Later on, the petitioner (accused) enhanced the rental to Rs. 1,500 per mensem. He paid rent to the complainant-respondent (Anil Joshi) at the rate of Rs. 1,500 for April, 1994. He did not pay rent for the subsequent period and vacated the tenanted premises on October 31, 1994, Prior to the vacation of tenanted premises by him, he gave him two cheques Nos. FMG/S/O 0800579, dated July 20, 1994, for Rs. 3,000 and FMG/S/O 0800580, dated August 5, 1994, for Rs. 1,500 as rental for May, June and July, 1994. The complainant (respondent–Anil Joshi presented the aforesaid cheques in his bank (the Punjab State Co-operative Bank Limited) on January 11, 1995. The bank issued a counter-foil to him. The Punjab State Co-operative Bank Limited forwarded the aforesaid cheques to the Central Bank of India, Extension Counter Sector 32, Chandigarh, so that the amount of the cheques could be realised from the account of the petitioner (accused) and finally credited to the account of complainant-respondent (Anil Joshi). The Central Bank of India, Sector 32, Chandigarh, vide memo dated January 12, 1995, refused to honour the aforesaid cheques saying “payment stopped by drawer”. On January 14, 1995, the Punjab State Co-operative Bank Limited, Chandigarh, returned the aforesaid cheques to the complainant-respondent (Anil Joshi)
along with memo containing the remarks “payment stopped by drawer”. On the receipt of the aforesaid dishonoured cheques together with the said memo containing the remarks “Payment stopped by drawer” he contacted counsel and got issued a legal notice dated January 27, 1995, to Dr. P. N. Pandit through registered AD cover and UPC cover. The accused refused to receive the said notice. The notice sent through UPC stood served on him, as if the same had not been served on him, he would have received the same back. The accused gave reply to the said notice and refused to pay the amount of the cheques. He had received the notice on February 6, 1995. He was bound to pay the amount of cheques to the complainant up to February 21, 1995. By not making to him the payment of the aforesaid cheques up to February 21, 1995, he committed an offence punishable under Section 138 of the Negotiable Instruments Act read with Section 420 of the Indian Penal Code, 1860. He was put to wrongful loss by the accused by getting the payment stopped. He caused wrongful gain to himself. On these allegations, Anil Joshi instituted a complaint under Section 138 of the Negotiable Instruments Act read with Section 420 of the Indian Penal Code, 1860.
3. Dr. P. N. Pandit seeks the quashing of this complaint, annexure P-6, averring that initially the monthly rental was Rs. 1,050. After a year, the rental was enhanced to Rs. 1,150. No receipt was ever issued to him by Anil Joshi. From June, 1994, Anil Joshi wanted to enhance the rental from Rs. 1,150 to Rs. 1,500, per mensem with a condition that he will vacate the premises in the year, 1996, i.e., within two years from June, 1994, as he had taken the premises on rent for a period of five years and that period would expire in May, 1996. He agreed to pay the rental at Rs. 1,500 per mensem and the aforesaid cheques were accordingly issued to Anil Joshi. The rent was enhanced with a rider that he will keep the premises for two years, i.e., up to May 31, 1996, and after receiving the aforesaid cheques he was pressurised by Anil Joshi to vacate the premises before December, 1994, and also if he vacated premises before December, 1994, the rent would be chargeable at the rate of Rs. 1,150 per mensem and he vacated the premises on October 31, 1994. At the time of vacating the premises nothing was due towards him so far as electricity and water charges are concerned. The aforesaid cheques had not been got encashed by Anil Joshi and Rs. 5,750 were paid to him as rent from June, 1994, to October, 1994, at the rate of Rs. 1,150 per mensem and those cheques were not returned to him saying that the same had been lost. He wrote to the bank to stop payment on the advice of Anil Joshi himself. The receipt of
Rs. 5,750 was not given to him as he had never given him any receipt earlier. On January 27, 1995, he issued notice, annexure P-1, and he (P. N. Pandit) gave reply, annexure P-2, on February 6, 1995. The payment of Rs. 5,750 was made after withdrawing from the bank. If arrears of rent had been due from him, he would have presented the cheques soon after they had been issued or at any date shortly after October 31, 1994. A sum of Rs. 19,423.62 was lying in his account as on January. 12, 1995, as per annexure P-4 issued by the Central Bank of India, Zonal Office, Chandigarh. It was with a view to misuse the cheques issued by him that Anil Joshi instituted the complaint against him in the Court of the Chief Judicial Magistrate, Chandigarh. The payment of cheques was stopped by him on November 16, 1994, not because sufficient amount was not lying in his account in the bank but because no arrears of rent were due from him and he had paid Rs. 5,750 as rental for five months, i.e., June, 1994, to October, 1994, at the rate of Rs. 1,150 per mensem. The provisions of Section 138 of the Negotiable Instruments Act are not attracted when there was no debt or other liability which was to be discharged by those cheques.
4. The respondent (complainant, Anil Joshi) opposed this petition urging that the complaint under Section 138 of the Negotiable Instruments Act cannot be quashed if “stop payment” is the reason for dishonour of the cheque followed by a notice to pay the amount and, thereafter, failure of the drawer to pay the cheque amount. The disputed questions of fact require evidence to be produced in the Magistrate’s court. The petitioner has alleged something which requires evidence and, therefore, this petition is incompetent. The petitioner used to pay rent to him and obtain receipt. The petitioner and the respondent mutually agreed that the rent be enhanced from Rs. 1,150 per mensem to Rs. 1,500 per mensem with effect from April, 1994. The petitioner paid rental to the tune of Rs. 1,500 for April, 1994. He did not pay rent for May, 1994. It was denied that the rent was enhanced to Rs. 1,500 per mensem on the stipulation that the petitioner will retain the premises up to May 31, 1996, and not thereafter. It was pleaded that the petitioner gave the cheques in question in lieu of rental for June, July and August, 1994. It was denied that he (complainant) put pressure upon the petitioner to vacate the premises at any time before December, 1994. It was denied that he agreed to charge Rs. 1,150 per month as rental in case the premises were vacated before December, 1994. It was denied that the rental at the rate of Rs. 1,500 per mensem was to be charged in case the premises were to be retained up to May 31, 1996. It is an imaginary story cooked up by the petitioner about which there is no ring of truth. It was admitted that the petitioner vacated the
premises in question on October 31, 1994. It was also admitted that nothing was due towards the electricity and water charges. It was denied that payment to the tune of Rs. 5,750 was made to him in lieu of rental from June, 1994, to October, 1994, at the rate of Rs. 1,150 per mensem. If rental to the tune of Rs. 5,750 had been paid to him he would have insisted upon getting the receipt. It was denied that he advised the petitioner to write to the bank to stop payment. Why should he have pressed the payment of the cheques if no rental had been due to him from the petitioner as he would not have gone in for uncalled for litigation.
5. I have heard learned counsel for the parties and have gone through the record.
6. Cheque No. FMG/S/0 0800579, for Rs. 3,000 was issued on July 20, 1994, and Cheque No. FMG/S/0 0800580 for Rs. 1,500 was issued on August 5, 1994. It is a matter of evidence why these cheques were not presented by Anil Joshi soon after they had been issued. It is also a matter of evidence whether rent was enhanced from Rs. 1,150 per pensem to Rs. 1,500 per mensem on the acceptance of Dr. P. N. Pandit’s requests to allow him to retain the premises up to May 31, 1996.
7. It is again a matter of evidence whether Dr. P. N. Pandit had to vacate the premises due to the pressure of Anil Joshi on October 31, 1994, as Anil Joshi wanted vacation of the premises before December, 1994 ; and also that if the house was vacated before December, 1994, rental to the tune of Rs. 1,150 per mensem would be chargeable. It is admitted on both hands that the premises were vacated on October 31, 1994. It is also admitted on both hands that there were no arrears of rent due up to April, 1994. The dispute was only with regard to arrears of rent from May, 1994, up to October 31, 1994. It is contended by the petitioner that the rent was due from June, 1994, to October, 1994, and that he had paid at the rate of Rs. 1,150 per mensem. It is contended by the respondent that rent was due at the rate of Rs. 1,500 per mensem for the period May, 1994, to October, 1994. The cheque dated July 20, 1994, for Rs. 3,000 was in lieu of rental for May and June, 1994, and the cheque for Rs. 1,500 dated August 5, 1994, was in lieu of rental for July, 1994. It was submitted by the petitioner that he wrote to the bank for stopping payment of these cheques on November 15, 1994, vide annexure P-3, not because there was no sufficient amount in his account in the bank to meet these cheques but because he was not liable to pay the amount of these cheques, he having paid Rs. 5,750 as rent for the period June, 1994, to October, 1994, at the rate of Rs. 1,150 per mensem.
8.
It would bear repetition that according to the petitioner he was to pay rental to the tune of Rs. 1,500 in case he was allowed to retain the premises up to May 31, 1996. Anil Joshi asked him to vacate the premises before December, 1994, and in case he vacated the, premises before December, 1994, the rental to the tune of Rs. 1,150 per mensem would be chargeable. It was submitted by learned counsel for the petitioner that in these circumstances, the petitioner was liable to pay rental at the rate of Rs. 1,150 per mensem and at the time of vacation of the premises, he had paid Rs. 5,750 towards rental from June, 1994, to October, 1994, and that there was no outstanding against him. These are all questions of fact. All these questions of fact can be settled in a civil suit for the recovery of arrears of rent, if any, filed by the respondent against the petitioner. There appears to be a civil dispute between the parties so far as arrears of rent is concerned. According to the petitioner, no arrears of rent were due from him, he having paid Rs. 5,750 in lieu of rental for five months, i.e., up to October 31, 1994. According to the respondent, arrears of rent were due to him to the tune of Rs. 1,500 per mensem from May, 1994, to October, 1994, and the cheques in question had been issued to him in lieu of rental for three months. It is thus doubtful whether there was any debt or liability standing against the petitioner in the discharge of which cheques had been issued. As such the provisions of Section 138 of the Negotiable Instruments Act are not attracted.
9. Section 138 of the Negotiable Instruments Act was brought on the statute book by Central Act 66 of 1988, with effect from April 1, 1989, with a view to penalise the accused in cases of dishonour of certain cheques for insufficiency of funds in the accounts of the accused. It reads thus :
‘138. Dishonour of cheque for insufficiency, etc., of funds in the account–Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account 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, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both :
Provided that nothing contained in this section shall apply unless :
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier ;
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid ; and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.
Explanation.–For the purpose of this section “debt or other liability” means a legally enforceable “debt or other liability”.’
10. It is thus clear that Section 138 was brought in the Negotiable Instruments Act with a view to curb dishonesty and inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments. Despite civil remedy, Section 138 is intended to prevent dishonesty on the part of the drawer of a negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a bank and induces the payee or holder in due course to act upon it. Section 138 draws a presumption that one commits the offence if he issues the cheque dishonestly.
11. In this case, one cheque was for Rs. 3,000 and other was for Rs. 1,500. As on January 12, 1995, a sum of Rs. 19,422.62 was lying in the account of the petitioner. The petitioner had asked the bank through annexure P-3 to stop payment of the cheques as the petitioner–Dr. P. N. Pandit had already paid the amount due in cash. The petitioner called the cheques back because his contention was that he had already made the payment. When the cheques were issued circumstances were different and when the cheques were recalled the circumstances were different, viz., the petitioner was contending that there was no outstanding against him as he had made the payment.
12. For the reasons given above, this criminal miscellaneous petition succeeds and is accepted. Annexure P-6 is quashed. Since the respondent-Anil Joshi, appears to have been bona fide prosecuting this complaint
under Section 138 of the Negotiable Instruments Act against the petitioner, Dr. P. N. Pandit, respondent, Anil Joshi, will be allowed exclusion of all this time during which this complaint has remained pending while computing the period of limitation if he institutes the suit for the recovery of arrears of rent, if any.