Dismissed

Arvind Agarwal v. State of U.P. and Another

Allahabad HC23 Jan 2023A482/39639/2022

Case brief

AI extract

What is this about?

This court dismissed an application under Section 482 Cr.P.C. seeking to quash proceedings under Section 138 NI Act. The court held that a 'stop payment' instruction does not preclude penal liability, and the existence of a legal due is an issue for the trial court to decide after evidence.

What did the court decide?

Application under Section 482 Cr.P.C. dismissed; impugned orders upheld.

Arvind Agarwal Vs State of U.P. and Another — Cheque Dishonour | Allahabad HC (2023)

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Court No. - 65

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Case :- APPLICATION U/S 482 No. - 39639 of 2022

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Applicant :- Arvind Agarwal Opposite Party :- State of U.P. and Another Counsel for Applicant :- Arvind Kumar Tiwari Counsel for Opposite Party :- G.A.,Ajai Mani Tiwari

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Hon'ble Rajiv Gupta,J.

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Heard learned counsel for the applicant, learned AGA for the state and perused the records.

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The present application u/s 482 Cr.P.C. has been filed by the applicant with a prayer to quash impugned orders dated 15.11.2021, 14.03.2022 and 05.07.2022 passed by the Additional Civil Judge (Senior Division), Hathras in Criminal Case No. 1908 of 2021 (Mahesh Chandra Vs. Arvind) and impugned order dated 28.10.2022 passed by Sessions Judge, Hathras in Criminal Misc. Case No. 110 of 2022 (Arvind Agrawal Vs. State of U.P and Another) under Section 138 of Negotiable Instruments Act, Police Station Hathras Gate, District Hathras.

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As per the allegations made in the complaint, it is alleged that Cheque No. 060650 for an amount of Rs.2,00,000/- was issued by the applicant in favour of opposite party no. 2. On presentation of the said cheque, the same was dishonoured with the remark 'stop payment'.

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After the dishonour of the said cheque, opposite party no. 2 repeatedly approached the applicant to make good the payment of the cheque amount, however, the applicant kept dilly dallying and did not make good the payment of the cheque amount, as such, present complaint under Section 138 of Negotiable Instruments Act, 1881 (in short 'NI Act') has been filed.

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On the basis of the said complaint, the learned Magistrate has recorded the statement of the complainant under Section 200 Cr.P.C. and after making requisite enquiry under Section 202 Cr.P.C. has summoned the applicant to face trial vide order dated 15.11.2021.

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Being aggrieved by order dated 15.11.2021, the applicant preferred a criminal revision, however, the said criminal revision has also been dismissed by the Revisional Court vide order dated 28.10.2022, against which present application under

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Section 482 Cr.P.C. has been filed.

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Learned counsel for the applicant has submitted that the cheque in question has never been issued by the applicant and, in fact, it has been stolen and no legal due, debt or liability exists in respect of the payment of the said cheque amount, as such, proceedings under Section 138 NI Act cannot be drawn against the applicant.

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Per contra, learned counsel for opposite party no. 2 has vehemently contested the said prayer and has submitted that the cheque in question was duly issued by the applicant, however, instead of making good the payment of the cheque amount, the applicant deliberately, with an evil intention, stopped the payment of the said cheque and despite repeated reminders to make good the payment of the said amount, the applicant did not make the payment of the due amount and in order to raise his defence has come up with the case that the cheque was never issued by the applicant and no due, debt or liability exists.

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Learned counsel for the opposite party no. 2 has next submitted that even where the payment of the cheque has been stopped by the applicant, proceedings under Section 138 NI Act can very well be drawn against the applicant. He has further submitted that the impugned order passed by the court below summoning the applicant to face trial is just, proper and legal and do not call for any interference.

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Having considered the rival submissions made by the parties and taking into consideration the submission made by the learned counsel for the applicant that in case of 'stop payment', the proceedings under Section 138 of the NI Act would not be applicable is wholly untenable and against the settled principle of law laid down by the Apex Court.

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In the case of HMT Watches Limited Vs. M.A. Abida and Another, (2015) 11 SCC 776, Modi Cements Limited Vs. Kuchil Kumar Nandi, (1998) 3 SCC 249 as also in the case of Pulsive Technologies (P) Limited Vs. State of Gujarat and Others, (2014) 13 SCC 18 , it has been held that, if a cheque is dishonoured because of stop payment instructions, even then the offence punishable under Section 138 of the NI Act gets attracted.

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It is further germane to point out here that whether any legal due, debt or outstanding liability exists or not are questions of fact, which cannot be determined in exercise of power under Section 482 Cr.P.C. and, in fact, these issues can only be decided by trial court after recording evidence. Moreover,

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Section 139 of the NI Act provides for a legal presumption that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, or any debt or other liability which is rebuttable but it is for the trial court to examine after evidence is led before it.

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This court in the case of Deepak Goel Vs. State of U.P. (2013) 82 ACC 210 , relying upon the principles laid down by the Apex Court, in Modi Cements Limited (supra) has held that once a cheque is issued and on presentation is dishonoured, penal provision is attracted.

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Furthermore, a Co-ordinate Bench of this Court considered law laid down in Raj Kumar Khurana Vs. State (Nct of Delhi) reported in (2009) 6 SCC 72 to be distinguishable.

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In view of the foregoing discussion, I am of the view that the impugned orders passed by the court below are just, proper and legal and do not call for any interference at this stage.

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The present application under Section 482 Cr.P.C. is devoid of merits and is accordingly dismissed.

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Order Date :- 23.1.2023 Subham

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Digitally signed by :- SUBHAM KUSHWAHA High Court of Judicature at Allahabad

Arvind Agarwal v. State of U.P. and Another

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Arvind Agarwal v. State of U.P. and Another

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