In CRL.M.C. 4100/2022-DEL HC- If there is any infirmity in cheque return memo, it does not render entire trial u/s 138 of NI Act as nullity: Delhi HC
Justice Sudhir Kumar Jain [14-11-2022]
New Delhi, November 28, 2022: The purpose of the cheque return memo is to give the information of the holder of the cheque that his cheque on presentation could not be encashed due to the variety of reasons as mentioned in the cheque return memo and neither section 138 nor section 146 of the NI act has prescribed any particular form of such memo, the Delhi High Court has observed.
Justice Sudhir Kumar Jain dismissed the present petition instituted under section 482 Code of Criminal Procedure, 1973 for quashing the criminal complaint titled and the summoning order dated August 29, 2018 (impugned order) passed by the Trial Court.
The Single Judge bench was of the view that the grounds as taken by the petitioner to attack the impugned order were without any factual and legal basis. There was no infirmity or illegality in the impugned order. Hence, it was stated that the present petition was misconceived and it appeared that, it was filed to delay the proceedings of the case.
The second respondent/ complainant had filed a complaint under section 138 of the Negotiable Instrument Act, 1881 titled as Amrit Pal Singh Bedi V International Trenching Pvt. Ltd. & Ors. on the allegations that the first accused i.e. M/s International Trenching Pvt. Ltd. was engaged in the business of trenching/fibre optic laying and allied services.
The second accused and the third accused, namely, Sumit Bhasin werethe Directors of the first accused. The fourth accused namely, Summy Bhasin was handling the finances and accounts of the first accused. The petitioner and the accused no. 4 on behalf of the first accused approached the second respondent for availing the services for their business in upcoming projects and the second respondent had provided services from time to time and for which Rs.46, 60,000/- was agreed to be paid by the first accused to the second respondent on or before July 15, 2018.
The petitioner, the third accused and the fourth had failed to make the timely payment to the second respondent and thereafter, entered into a MoU dated, whereby the petitioner and the the third and fourth accused had agreed to pay Rs.47,53,519/- to the second respondent on or before February 27, 2019.
The petitioner on June 27, 2019 sent an e-mail to the second respondent asking him not to present the cheque in the bank for encashment. The second respondent presented the said cheque to his Banker i.e. the Syndicate Bank, which was returned back unpaid due to the reason “account blocked” vide return memo dated July 4, 2019. Thereafter, the second respondent served a legal notice dated through counsel on the official address of the first accused- petitioner and the accused third and fourth which was returned back with the remarks "always door locked"/not received despite repeated attempts and leaving intimation. The second respondent being aggrieved filed a complaint.
The trial Court vide impugned order, took the cognizance for the offence punishable under section 138 of the NI Act against the first accused- the petitioner and the third accused.
After considering the submissions, the Court noted that the cheque return memo is a memo informing the payee’s banker and the payee about the dishonour of a cheque. When the cheque is dishonoured, the drawee bank immediately issues a cheque return memo to the payee’s banker mentioning the reason for non-payment.
The purpose of the cheque return memo is to give the information of the holder of the cheque that his cheque on presentation could not be encashed due to the variety of reasons as mentioned in the cheque return memo. As per the section 146 of the NI act, the cheque return memo on presentation presumed the fact of dishonour of the cheque unless and until such fact is disapproved, the Bench noted.
The Bench clarified that Section 138 does not mandate any particular form of cheque return memo which is nothing but mere information given by the Banker of the due holder of a cheque that the cheque has been returned as unpaid. If the cheque return memo is not bearing any official stamp of the bank, it does not render the cheque return memo as invalid or illegal.
“The cheque return memo is not a document which is not required to be covered under section 4 of the Bankers Book (Evidence) Act, 1891. If there is any infirmity in the cheque return memo, it does not render entire trial under section 138 of the NI Act as nullity”, the Court further noted.
The perusal of the alleged cheque return memo which was under challenge reflected that the cheque April 15, 2019 amounting to Rs.47, 53,519 could not be encashed due to the “account blocked”.
“If it is presumed that there is any irregularity or illegality in the format of the said cheque return memo then it can be addressed during the course of trial. The petitioner has not disputed the issuance of cheque under his signature and the dishonour of the cheque by the concerned Bank”, the Court stated.
Hence, the Court opined that the grounds as taken by the petitioner to attack the impugned order were without any factual and legal basis. There was no infirmity or illegality in the impugned order. Noticing that the present petition was misconceived, the Bench dismissed the same.
Add a Comment
Sign up for our weekly newsletter to stay up to date on our product, events featured blog, special offer and all of the exciting things that take place here at Legitquest.