WP/26387/2005 of P. Sai Babu, Vs The Union of India rep. by its Secretary, on 27 December 2005

HONOURABLE SRI G.S. SINGHVI, THE CHIEF JUSTICE

AND

HONOURABLE SRI JUSTICE R. SUBHASH REDDY

WRIT PETITION No. 26387 OF 2005

Between

Mr. P.Sai Babu ….Petitioner

And

The Union of India, rep. by its Secretary, Ministry of Law and Justice, Sastry bhavan,New Delhi and others. …Respondents Counsel for the petitioner : Mr.T.Raghunath Counsel for Respondent No.1 : Mr.A.Rajasekhar Reddy, Asst. Solicitor General of India Counsel for Respondent No.2 : Mr. C.V.Nagarjuna Reddy.

DATED: 27-12-2005

Per R. Subhash Reddy,J.

In this Writ Petition, apart from challenging the validity of Section 139 of theNegotiable Instruments Act, 1881 (for short ‘the Act’), the petitioner has prayed forissuance of writ of mandamus to the second respondent-Judicial Magistrate of FirstClass, Manthani, Karimnagar District, to dismiss the criminal complaint filed in C. C.No. 334 of 1998 filed by respondent No.3 Sri M. Malla Reddy.

A perusal of the record shows that respondent No.3 filed complaint in the Court ofJudicial Magistrate of First Class, Manthani alleging therein that the petitioner hascommitted offence under Section 138 read with Section 142 of the Act. According tothe complainant, the petitioner, who was the Managing Director of Tejasvi HirePurchase Limited and Tejasvi Permanent Fund Limited, had collected aboutRs.1,50,000/-, with assurance to allot house site, but, however, he had closed thebusiness abruptly and shifted to Hyderabad. It was further alleged that the petitionerhad sought to refund the amount by issuing three post dated cheques: bearingNo.859039 dated 31-7-1998 for Rs.50,000/-, No.859040 dated 31-8-1998 for Rs.50,000/- and,No.859041 dated 30-9-1998 for Rs.47,200/-, payable at Andhra Bank,Himayatnagar, Hyderabad, but when the cheques were presented for encashment,the same were dishonoured by the bank on the ground of ‘insufficiency of funds’.

We have heard learned counsel for the parties. The petitioner’s prayer for quashingthe complaint filed by respondent No.4 deserves to be dismissed because as per hisown showing vide judgment dated 29-11-2005, learned Judicial Magistrate of FirstClass, Manthani convicted and sentenced him. If he is aggrieved by the judgment ofthe trial court, the petitioner is free to avail the remedy of appeal under the relevantstatutory provisions.

The petitioner’s challenge to the constitutional validity of Section 139 of the Actdeserves to be rejected because he has not laid foundation for the said challenge.

The only assertion made in the affidavit filed in support of the writ petition is that theprovision under Section 139 of the Act runs contrary to the explanation to Section138 of the Act, and also, same is contrary to provision under Section 102 of theIndian Evidence Act, 1872. Section 138 of the Act and the explanation, reads asfollows:

“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 bankerfor payment of any amount of money to another person from out of that account for thedischarge, 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 tohonour the cheque or that it exceeds the amount arranged to be paid from that account by anagreement made with that bank, such person shall be deemed to have committed an offence,and shall, without prejudice to any other provision of this Act, be punished with imprisonmentfor a term which may extend to one year, or with fine which may extend to twice the amount ofthe 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 fromthe date on which it is drawn or within the period of its validity, whichever is earlier: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 said amount of money bygiving a notice, in writing, to the drawer of the cheque, within fifteendays of the receipt of information by him from the bank regarding thereturn of the cheque as unpaid; andmakes a demand for the payment of the said amount of money bygiving a notice, in writing, to the drawer of the cheque, within fifteendays of the receipt of information by him from the bank regarding thereturn of the cheque as unpaid; and

c.

the drawer of such cheque fails to make the payment of the said amount ofmoney, to the payee or, as the case may be, to the holder in duecourse of the cheque, within fifteen days of the receipt of the saidnotice.money, to the payee or, as the case may be, to the holder in duecourse of the cheque, within fifteen days of the receipt of the saidnotice.

Explanation: For the purposes of this section, ‘debt or other liability’ means a legallyenforceable debt or other liability.”enforceable debt or other liability.”

The provision as contained under Section 139 of the Act is with regard to drawing ofpresumption in favour of the holder of cheque for the purpose of any debt or otherliability, as referred under Section 138 of the Act, whereas Section 102 of the IndianEvidence Act, 1872, is a provision with regard to burden of proof in a suit orproceeding. In our opinion, there is no conflict between the two provisions because the same operate in different fields. Therefore, it is not possible to accept thepetitioner’s prayer for striking down Section 139 of the Act.

For the reasons mentioned above, the writ petition is dismissed.

R. SUBHASH REDDY, J.

G.S. SINGHVI, CJ.

27[th] December, 2005.

Msnr / svs