A single judge bench of the Madras High Court comprising of Justice Sunder Mohan held that when a cheque is dishonored, it would not attract the offence of cheating under Section 420 of the I.P.C. especially when there are no allegations to prove that there was misrepresentation on part of the borrower.
It would be a breach of promise and the statutory notice in that regard must be furnished in timely.
Brief Facts:
As against the petitioner, it was alleged in the complaint that he borrowed a sum of Rs.4,00,000/- and towards the discharge of the loan amount, he had issued a cheque on 18.05.2016. The said cheque which was deposited on 19.05.2016 was returned for the reason 'funds insufficient'. The respondent had issued statutory notice on 26.12.2018 and the said notice was returned on 14.01.2019 with an endorsement as 'insufficient address'. Hence the complaint was filed under Section 420 of the Indian Penal Code. The summons issued to the petitioner says that cognizance was taken under Sections 138 and 102 of the Negotiable Instruments Act.
Contentions of the Petitioner:
The learned counsel for the petitioner submitted that the offence under Section 138 of the Negotiable Instruments Act is not maintainable as the statutory notice, admittedly, was served two years after the date of return of the cheque. In any event, even assuming that the complaint is only for the offence under Section 420 of the Indian Penal Code, there was no allegation in the impugned complaint to suggest that the petitioner had committed the offence under Section 420 of the Indian Penal Code.
Observations of the Court:
The court observed that the complaint had been filed alleging the offence of cheating. Admittedly, the petitioner has borrowed a sum of Rs.4,00,000/- and towards discharge of the said loan, he had issued a cheque. The bench remarked that non-payment of the loan amount taken by the petitioner due to the dishonored cheque would not by itself constitute the offence of cheating. Rather, it amounts to a breach of promise.
There are no allegations to show that the petitioner made any false representation etc. Thus, the court held that the allegation in the present complaint would not attract the offence of Section 420 of the Indian Penal Code. The summons issued by the trial Courts says that the cognizance was taken for the offence under Sections 138 and 102 of the Negotiable Instruments Act.
In light of the same, even the said offence was not made out since admittedly, statutory notice was issued two years after the cheque was dishonoured. The court held that this was a clear violation of the mandate of Section 138 (b) of the Negotiable Instruments Act, of 1881.
Decision of the Court:
The complaint in S.T.C. No. 1406 of 2019 on the file of Judicial Magistrate No. IV, Puducherry was quashed and this Criminal Original Petition was allowed.
Case Title: Sivagnanam vs D. Suresh
Coram: Justice Sunder Mohan
Case No.: Criminal Original Petition No. 22727 of 2019 and Crl. M.P. Nos. 11818 & 11819 of 2019
Advocate for the Petitioner: Mr. V. Sakkarapani
Advocate for the Respondent: N.A.
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