Dismissed¶52

Saroj Kumar Sahu v. Kishore Chandra Sahu

Criminal – S.482 CrPC

Orissa HC30 Apr 2025CRLMC/1954/2023

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Case brief

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What is this about?

Orissa High Court CRLMC 1954/2023 Section 482 CrPC cognizance Section 138 NI Act stop payment cheque dishonour insufficient funds Return Memo demand notice Modi Cements AIR 1998 SC 1057 MMTC AIR 2002 SC 182 Section 139 rebuttable presumption burden on accused maintainability summons same order matter for trial dismissed liberty to contend before trial court Savitri Ratho J

What did the court decide?

CRLMC dismissed, with the observation that the petitioner is at liberty to raise all his contentions before the learned trial court, which shall be considered in accordance with law. ¶52

Saroj Kumar Sahu Vs Kishore Chandra Sahu — Cheque Dishonour | Orissa HC (2025)

What the court decided

AI extract

Outcome

CRLMC dismissed, with the observation that the petitioner is at liberty to raise all his contentions before the learned trial court, which shall be considered in accordance with law.

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Issue for consideration

Maintainability: whether the CRLMC is maintainable where the petitioner has challenged only the order taking cognizance and not the order issuing summons. +1 more

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Court's answer

The CRLMC is maintainable notwithstanding that only the cognizance order was challenged, because by the same order the learned Court took cognizance of the offences and directed issuance of summons to the accused.

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Ratio / Principle

Whether the petitioner had sufficient funds in his account and had instructed the bank to stop payment on account of the complainant not honouring his part of the agreement by registering the sale deed can only be proved in the trial by leading evidence.

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Key takeaways

In view of the Supreme Court decisions in M/S. Modi Cements Ltd (supra) and M/S M.M.T.C. Ltd. (supra), the contention that the order of cognizance is liable to interference because the cheque was dishonoured on account of the petitioner's stop-payment instruction (the complainant allegedly not having discharged his part of the agreement) was rejected as a matter to be proved during trial.ratio¶51

Detailed headnote1 paragraphs

Criminal – S.482 CrPC – challenge to order taking cognizance under S.138 N.I. Act – cheque dishonoured pursuant to drawer's 'stop payment' instruction – Maintainability: petition not defective merely because the summons order was not separately challenged, cognizance and summons having been issued by the same order (Savitri Ratho, J.). Relying on M/S. Modi Cements Ltd v Shri Kuchil Kumar Nandi (AIR 1998 SC 1057) and M/S M.M.T.C. Ltd. v M/S Medchl Chemicals & Pharma P. Ltd. (AIR 2002 SC 182), the Court held that whether the drawer had sufficient funds and stopped payment because the complainant failed to register the sale deeds is a matter provable only at trial by evidence; the Section 139 presumption is rebuttable and the burden lies on the accused. Cognizance order left undisturbed; CRLMC dismissed with liberty to raise all contentions before the trial court.

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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CRLMC No.1954 of 2023

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An application under Section 482 of the Code of Criminal Procedure arising out of ICC No 73 of 2022 in the Court of the SDJM , Berhampur .

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*Saroj Kumar Sahu*	*..….*	*Petitioner*
	-versus-
*Kishore Chandra Sahu*	……	*Opp. Party*
------------------------------ For Petitioner	------------------------------- : Mr. Jyotirmaya Sahoo,	---------------- Advocate
For Opp. Party ------------------------------	: Mr. Tirth Kumar Sahu, -------------------------------	Advocate ----------------

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CORAM:

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HON’BLE MISS JUSTICE SAVITRI RATHO

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JUDGMENT

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30.04.2025

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Savitri Ratho, J. This application has been filed challenging the order

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dated 17.03.2023 passed by the learned S.D.J.M., Berhampur in 1CC Case No.73 of 2022 taking cognizance of the offence punishable under Section 138 of the N.I. Act against the present petitioner-Saroj Kumar Sahu and M/s. Rajarani Real Estates, represented by its partner Saroj Kumar Sahu as there are prima facie materials to proceed against them.

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CASE OF THE COMPLAINANT

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CRLMC No. 1954 of 2023 Page 1 of 9

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The allegations in 1.C.C. Case No.73 of 2022 -the complaint , in brief are that the complainant is the owner of Ac.1.403 dec. in Khata No.154, situated at Haladiapadar Mouza,. M/s. Rajarani Real Estate, Berhampur is a Real Estate partnership firm and its partners are Sri Umashankar Panigrahi, Sri Pradeep Kumar Patra and Sri Saroj Kumar Sahu . M/s. Rajarani Real Estate wanted to purchase the land of the Complainant and accordingly, as per understanding different documents were executed in the name of Sri Pradeep Kumar Patra, Sri Umashankar Panigrahi and a General Power of Attorney was also given in favour of them . As per understanding and arrangement of some amount, out of the total consideration amount was to be given at the time registration of documents in respect of the lands referred and for the rest amount, Rs.82,00,000/- (Rupees Eighty-two Lakhs only), four numbers of Cheques were issued in favour of the Complainant by Saroj Kumar Sahu for and on behalf of M/s. Rajarani Real Estate and its Partners. As cheque No.248052, dated 30.09.2021 for Rs.20,00,000/- (Rupees Twenty Lakhs only) of Utkal Gramina Bank, Raipur Branch, Taratarini Hills, in the District of Ganjam, issued by Sri Saroj Kumar Sahu, presented at State Bank of India, Bijipur Branch, Berhampur, was returned, showing ‘insufficient of

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CRLMC No. 1954 of 2023 Page 2 of 9

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funds’ with Return Memo Report, dated 15.11.2021, the complainant issued demand notice to the accused by Speed Post .

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He received the notice but did not pay the amount within the statutory period. He sent a reply taking false and fabricated pleas with ulterior motive to avoid payment.

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SUBMISSIONS

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Mr. Jyotirmaya Sahoo, learned counsel for the petitioner submits that the Opp. Party and the Petitioner had executed a Sale Deed for some plots for a consideration amount of Rs.82,00,000/As per the demand of the Opp. Party, the Petitioner issued four cheques in favour of the Opp. Party bearing Cheque No.248051 for amount of Rs.15,00,000/-, Cheque No.248052 for Rs.20,00,000/-, Cheque No.248053 for Rs.15,00,000/- and Cheque No.248056 for Rs.30,00,000/-. While issuing the cheques, it had been agreed that

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the cheques would be presented in the bank for encashment , after execution of the Registered Sale Deeds only in respect of the property - AC.1.103 dec. in favour of the Petitioner. But on the date and time agreed for registration , the complainant did not turn up at the Office of the Sub Registrar . Thereafter, the Petitioner requested the complainant to come to the Office of the SubRegistrar Office to execute the Sale Deeds, but in vain .

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CRLMC No. 1954 of 2023 Page 3 of 9

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On 25.10.2021 the Petitioner met the complainant and the latter assured to come to the Office of Sub-Registrar Office for executing the said Sale Deeds, but did not come . Finding no way out and under the apprehension that the complainant was playing fraud with him and would take away the money but not execute or register the sale deed , on 02.11.2021 the Petitioner requested the Branch Manager, Utkal Gramina Bank by writing a letter to stop the payments of the respective four Cheques. On 23.01.2023 the concerned Bank informed that all Cheques in favour of Sri Saroj Kumar Sahu are marked as ‘Stop’.

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He further submits that the offence under Section 138 of N.I. Act is not made out against the petitioner as the complainant did not honour his part of the agreement , which was to register the land in favour of the petitioner Therefore there was was no legal liability , So even though the petitioner had enough funds in his account , he was compelled to issue a letter to the bank to stop payment. Pursuant to such instruction , the bank had stopped payment in respect of the four cheques and the cheques were not dishonoured on account of insufficient funds in his . In support of his submissions, he relies on the following decisions:-

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CRLMC No. 1954 of 2023 Page 4 of 9

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(i) M/S. Modi Cements Ltd vs Shri Kuchil Kumar Nandi ,: AIR

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1998 SC 1057

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(ii) M/S M.M.T.C. Ltd. & Anr vs M/S Medchl Chemicals & Pharma P. Ltd. and another , : AIR 2002 SC 182.

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In respect of the other three cheques , three other CRLMCs have been filed which are listed today .

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Mr. T.K.Sahu, learned counsel appearing on behalf of sole opposite party submits that the CRLMC is not maintainable as the petitioner has challenged only the order taking cognizance and not the order issuing summons against the petitioner and issuing summons to him. He further submits that the reason for which the petitioner stopped payment cannot be considered by this Court at this stage and the same is the subject matter of trial.

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JUDICIAL PRONOUNCEMENTS

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In the case of M/s Modi Cements , the Supreme Court has held as follows :

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“ (18) The aforesaid propositions in both these reported judgments, in our considered view, with great respect are contrary to the spirit and object of Sections 138 and 139 of the Act. If we are to accept this proposition it will make Section 138 a dead letter, for, by giving instructions to the Bank to stop payment immediately after issuing a cheque against a debt or liability the

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CRLMC No. 1954 of 2023 Page 5 of 9

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drawer can easily get rid of the penal consequences notwithstanding the fact that a deemed offence was committed. Further the following observations in para 6 in Electronics Trade & Technology Development Corporation Ltd., Secunderabad (supra).

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"..... Section 138 of the Act intended to prevent dishonesty on the part of the drawer of negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a bank and induce the payee or holder in due course to act upon it. Section 138 dress presumption that one commits the offence if he issues the cheque dishonestly"

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in our opinion, do not also lay down the law correctly .

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(19) Section 138 of the Act is a penal provision wherein if a person draws a cheque on an account maintained by him with the 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, on the ground either because of the amount of money standing to the credit of that account is insufficient to honor 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. The distinction between the deeming provision and the presumption is well discernible. To illustrate, if a person, draws a cheque with no sufficient funds available to his

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CRLMC No. 1954 of 2023 Page 6 of 9

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credit on the date of issue, but makes the arrangement or deposited the amount thereafter before the cheque is out in the bank by the drawer, and the cheque is honored, in such a situation drawing of presumption of dishonesty on the part of the drawer under Section 138 would not be justified. Section 138 of the Act gets attracted only when the cheque is dishonored.

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(20) On careful reading of Section 138 of the Act, we are unable to subscribe to the view that Section 138 of the Act draws presumption of dishonesty against drawer of the cheque if he without sufficient funds to his credit in his bank account to honor the cheque issues the same and, therefore, amounts to an offence under Section 138 of the Act. For the persons stated hereinabove, we are unable to share the views expressed by this Court in the above two cases and we respectfully differ with the same regarding interpretation of Section 138 of the Act of the limited extent as indicated above.”

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In the case of M/s M.M.T.C Ltd, the Supreme Court

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has held as follows :

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“ It has been held that even though the cheque is dishonoured by reason of 'stop payment' instruction an offence under Section 138 could still be made out. It is held that the presumption under Section 139 is attracted in such a case also. The authority shows that even when the cheque is dishonoured by reason of stop payment

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CRLMC No. 1954 of 2023 Page 7 of 9

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instructions by virtue of Section 139 the Court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the "stop payment" instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then an offence under Section 138 would not be made out. The important thing is that the burden of so proving would be on the accused. Thus a Court cannot quash a complaint on this ground.”

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DISCUSSION AND CONCLUSION

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I am not inclined to entertain the submission of the learned

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counsel for the complainant that the CRLMC is not maintainable because the order issuing summons against the petitioner has not been challenged, in view of the fact that by the same order the learned Court has taken cognizance of the offences and then directed for issuance of summons to the accused.

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In view of the facts of the case and the decisions discussed above , the question whether the petitioner had sufficient

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CRLMC No. 1954 of 2023 Page 8 of 9

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funds in his account and had instructed the bank to stop payment on account of the complainant not honouring his part of the agreement by registering the sale deed , can only be proved in the trial by leading evidence .

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In view of the decisions of the Supreme Court in M/S. Modi Cements Ltd (supra) and M/S M.M.T.C. Ltd. (supra) , I am not inclined to entertain the contention of the petitioner that order of cognizance is liable for interference as the cheque had been dishonoured on account of the instruction of the petitioner to stop payment as the complainant had not discharged his part of the agreement as that is a matter to be proved during trial.

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The CRLMC is therefore dismissed , but with the observation that petitioner is at liberty to raise all his contentions before the learned trial court which , if raised , shall be considered

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in accordance with law .

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(Savitri Ratho) Judge

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Orissa High Court, Cuttack. The 30^th April, 2025./RKS

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Signature Not Verified

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Digitally Signed Signed by: RANJAN KUMAR SETHI Reason: Authentication Location: ORISSA HIGH COURT Date: 20-May-2025 18:28:10

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CRLMC No. 1954 of 2023 Page 9 of 9

Saroj Kumar Sahu v. Kishore Chandra Sahu

Case brief

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Saroj Kumar Sahu v. Kishore Chandra Sahu

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