Santosh Kumar Gupta v. State & Anr.

9. In the decision reported as 2010 (2) Kerala Law, Times Qevan Vs. Krishna Menon, in para 37, it was observed as under:- "37.. We do in these circumstances reiterate the law thus. 'lf the signature in the cheque is proved to be not genuine, the instrument cannot be recl<oned as a cheque and the same cannot attract culpability under S.138 of the Negotiable Instruments Act. But the decision as to whether the signature is genuine ad whether the execution is proved will have to be taken by a court, the mere fact that the banker returns the cheque for the reason that the signature differs is no reason for the court to mechanically swallow that reason. The courts are obliged to consider whether the real reason for dishonor is insufficiency of funds or not. We may at the risk of repetition proceed to reiterate that if as a matter of fact the signatures are not genuine and the court finds so, needless to say S.138 of the N.l.Act would not apply. But the endorsement by the banker is not conclusive. The court will have to ascertain the real reason' The challenge on this ground is in these circumstances, rejected. "

10. 295 (Karn) ln the decision reported as (2006) 134 Comp Cas has been observed as under:- "To decide the second contention of the petitioner, it. is beneficial to refer to certain observations made by \ the apex court in the case of NEPC Micon Ltd' Vs. Maama Leasina Ltd. (1999) 96 Comp Cas 822; AIR 1999 SC 1952, wherein it is observed in paragraph 15 thus: "ln view of'the aforesaid discussion we are of the opinion that even though Section 138 is a, i,?:ii':iil'J[3];,'l,l".J[:.f i;L3l'1i.".^f i;i"L? and purpose so as to suppress the mischief and advance the remedy. As stated above, Section Crl.M.C. N os.227 1, / zOtO & 862/ 2011 it (2- 138 of the Act has created a contractual breach as an offence and the legislative purpose is to promote efficacy of banking and of ensuring that in commercial or contractual transactions cheques are not dishonoured and credibility in tra nsacting business throug h cheq ues is maintained. The above interpretation would be in accordance with the principle of interpretation quoted above 'brush away the cobweb varnish, and shew the transactions in their true light' (Wilmot C.J.,) or (by Maxwell) 'to carry out effectually the object of a statute, it must be so construed as to defeat all attempts to do, or avoid doing, to an indirect or circuitous manner that which it has prohibited'. Hence, when the cheque is returned by a bank with an endorsement' account closed', it would amount to returning the cheque unpaid because 'the amount of money standing to the credit of that account is insufficient to honour the cheque' as envisaged in Section 138 of the Act. The bank has also returned the cheques on the ground that the drawer's signatures found on the cheques differ, lt is, but, natural for the bank to return the cheques if the drawer's signature differs from tfie original signature found in the bank records, lt is known only to the drawer as to why he made such signatures that too on series of cheques, which differ from the signature found in the original records of the bank. The reason is obvious. In this context, the contention of learned counsel for the respondent that intentionally the drawer must have changed his signature with the sole' intention that the cheques shouid not be honoured, cannot be lightly brushed aside. crl..M.c. N o s.227 L / 2010 & 862I 20LL X a XXXXX L[3] \ As observed by the apex court in the case of NEPC Micon Ltd. Vs. Maoma Leasina Ltd. (1999)

96 Comp Cas 822; AIR 1999 SC 1952, cited supra, it is the duty of the court to interpret Section 138 of the Negotiable Instruments Act consistent with the leEislative intent and purpose, so as to suppress the mischief and advance the remedy. Section 138 of the Negotiable Instruments Act has created "contractual breach" as an offence and the legislative purpose is to promote efficacy of ' banking and for ensuring that in commercial or contractual transaction, cheques are not o fl ishonoured a nd cred ibility in transacting ' business through cheques is maintained. lt is no doubt true that Section 138 of the Negotiable Instruments Act, if read plainly, would disclose that the drawer of the cheque would be responsible to be proceeded with for the offence under Section 138 of the Negotiable Instruments Act if the clreque is returned with an endorsement of "insufficient funds" or the amount involved in the cheque exceeds the amount arr.anged to be paid from that account by an agreement made with that bank. To overcome the said provision in a circuitous way, the drawer of the cheque may find various ways of getting the clreques bounced or returned with the sole purpose of defeating the encashment of the cheques. In such a situation, the question is as to whether the courts can shut their eyes? The answer would be obviously in the "negative".' lf the drawer intentionally tempers with the cheque or issues the cheque with difference in signature, etc', ' the cheques will be definitely returned. Even after service of statutory notice, if the amounts involved in the cheque are not paid by the.' drawer of the cheque, then his intentions are prima facie clear, to the effect that he would be tampering with the cheques only with an ' oblique motive. lf in such case, the'person in whose favor the cheques are issuecl is not crl. M.c. N os.227 rl }OLO & 862/ z}tl a xr,t allowed to prosecutei the matter under Section 138 of the Negotiable lnstruments Act, the very purpose of enacting Section 138 of the Negotiable Instruments Act would be frustrated. The drawer of the cheque will have to take abundant precaution while issuing the cheques so that the cheques shourld be honoured and contractual obligations are fulfilled. ln case, the drawer issues cheques as in the case on hand, he will be doing so in a circuitous manner in order to save his skin, only to take advantage of the absence of specific words under Section 138 of the Negotiable Instruments Act. Even when the cheque is dishonoured by the reason of "alteration in date and drawer's signature differs", the court has to presume by virtue of Section 139 of the Negotiable lnstruments Act that the cheques are received. by the holder for the discharge, in whole or in part, of any debt or liability. Of course, this is a rebutable presumption: The accused alone can show to the court that the alteration in signature and date were not made becaue of insu'fficiency or paucity of funds. Even otherwise, the drawer of the cheque may also come within the. purview of Section 420 of the IPC in these cases as he would be committing the offence of cheating, if he intentionally issued the cheques in question. As the criminal cases are still in the preliminary stage and charges are yet to be framed, it is always open for the court below to frame charges for the offence 'under'section 420 of the lPC, if the material on record at that stage, of the proceedings disclose such offence. lt is to be noted that the first information or complaint is not an encyclopedia to contain all the particulars and the sections under which the offences are committed' Mere omission to Crl. M.C. N os.227 Ll 2Ot0 & 862/ 20LL XXXXX \ tb mention any or more penal sections in the FIR would not ipso facto deter the concerned court to proceed further for the concerned offences. It is always open to the court to frame charges for different offences, other than and in additional to the offences which are mentioned in the FlR, if ultimately the material on investigation discloses such offences. Thus the criminal proceedings cannot be scuttled, ofl that technical score, at this initial stage. lf the process is stopped at this stage, it may lead to travesty of justice. The substance of the allegations found in the first information or, complaint is relevant and not the mere format or the sections, for the purposes of proceeding further, ln view of the same, there is no bar for:x?" r:: iilI. l,"J'#,.l:, J,'ff: ""%J;g; i,, rr,'JE under Section 420 of the Indian Penal Code along with the offence under Section 138 of the Negotiable lnstruments Act.". 11. The ratio of the two decisions squarely applies to the instant case where we have proof that there were insufficient funds in the account and it hardly mattered ' whether drawer's signatures were different. In any case, it would be a matter of evidence whether the petitioner acted dishonestly by camouflaging his signatures to cover the real \ reason i.e. insufficiency of funds in his account i.e. the real reason for the cheques being dishonoured insufficiency of funds in the iccount on which the was the cheques were drawn. Further, fully concurring with the last quoted paragraph above from the preceding decision it would also surtace that prima facie an. offence of cheating would also be made out and the learned Metropolitan Magistrate cqn even take cognizance of the same. Crl. M.C.Nos.227 Ll 2O1O & 862/ zOtI H l[6] (t t[2]. The two captioned petitions are. dismissed and since the transaction was commercial and noting the prima facie dishonesty in the stand of the petitioner I impose cost (one set) in sum of t25,000/- to be paid by the petitioner to respondent No.2. JT.JDGE SEPTEMBER 16, ZOLT mm I l- Crl. M.C. N os.227 t / 2OLO & 862/ 2otI