A criminal petition seeking quashment of NI Act proceedings was dismissed. The court held that cheques given for security became a liability upon failure to fulfill the underlying payment obligation, preventing quashment under Section 482 Cr.P.C.
Criminal Petition dismissed; contentions left open for trial Court.
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THE HON'BLE SRI JUSTICE K.C.BHANU
CRIMINAL PETITION NO.2861 OF 2012
ORDER:
This petition is filed by the petitioner-accused under Section 482 Cr.P.C. to quash the proceedings in C.C.No.6 of 2011 on the file of Judicial Magistrate of I Class, Luxettipet, which was taken cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘the Act’).
2. It is alleged in the complaint that the accused and her husband promised to negotiate for purchasing a house plot in Kukatpally area at Hyderabad for complainant and having faith and trust on them, the complainant paid an amount of Rs.13,47,000/-. But the accused and her husband kept the matter pending for a long time and finally on demand made by the complainant, the accused and her husband agreed to return the said amount. Both of them executed an agreement in favour of the complainant promising to pay Rs.6,42,000/- by the end of April, 2010 and Rs.7,00,000/- by the end of October, 2010 to the complainant. On the same day, the accused issued two cheques with post dates 01-05-2010 and 01-10-2010 for the above said amounts drawn on Andhra Bank, JNTU campus, Kukatpally, Hyderabad in favour of the complainant. When the complainant presented the cheques for encashment, they were returned with an endorsement ’insufficient funds’. After giving statutory legal notice, the complaint was filed.
3. Learned counsel appearing for the petitioner contended that as per the document executed by the petitioner and her husband, the cheques in question were given as security and therefore, it is not legally enforceable debt or liability and therefore, the offence punishable under Section 138 of the Act has not been made out.
4. On the other hand, learned counsel appearing for the 2nd respondent contended that the cheques were given towards part payment of the amounts as promised by the end of April, 2010 and October, 2010 and when failed to fulfill the promise, the cheques become liability and hence, there are no grounds to quash the proceedings.
5. The only contention raised by the learned counsel for the petitioner is that the cheques were given for security. The basis for his argument is execution of document, dated 30-12-2009, by the petitioner and her husband stating that the cheques were given towards security. There cannot be any dispute that when the cheque was given for security, the offence punishable under Section 138 of the Act has no application. But, in the said document, the petitioner and her husband undertook to pay Rs.6,42,000/- on or before April, 2010 and the remaining amount of Rs.7,00,000/- on or before October, 2010. But they have not fulfilled their obligation cast on their part in pursuance of the said document, dated 30-12-2009. Hence, the cheques given towards security become liability. The petitioner has not performed her obligation. Therefore, that question cannot be resolved exercising powers under Section 482 Cr.P.C.
6. Accordingly, the Criminal Petition is dismissed leaving open the contentions raised by the petitioner to be decided by the trial Court. Miscellaneous petitions, if any pending in this Criminal Petition shall stand closed.
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K.C.BHANU, J
DATED: 27-12-2012 Hsd
1 issue framed by the court
Whether the Criminal Petition under Section 482 Cr.P.C. to quash proceedings under Section 138 NI Act should be allowed given that cheques given for security became a liability upon failure to fulfill
2 provisions across 2 enactments
Petitioner-accused
2nd Respondent
K.C.BHANU
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
