Unknown vs M/S.Utkal Asbestos Ltd.

on 1 January, 1800

JUSTICE L.RATH

CRMC Nos. 1980 of 1993

24/12/1993

SIBA SHANKAR SAHU Petitioner

M/S.UTKAL ASBESTOS LTD. Respodents

NEGOTIABLE INSTRUMENTS ACT, 1881

BANKING, PUBLIC FINANCIAL INSTITUTIONS & NEGOTIABLE INSTRUM ENTS LAWS

(AMENDMENT) ACT, 1988

CRIMINAL PROCEDURE CODE, 1973

SE. 482

1. NEGOTIABLE INSTRUMENTS ACT,1881 - Section 138 - Offence for deshonour of cheque - Ingredients
to be proved;

i) A cheque is drawn by a person on an account maintained by him with a banker in favour of another person ;

ii) The cheque is drawn for the purpose of discharge, either in whole or in part, of any debt or other liability ;

iii) The cheque is returned by the bank unpaid; and

iv) Non-encashment of the cheque is either because the amount standing to the credit of the drawer in that
account is insufficient to honour the cheque or the amount for which the cheque is drawn exceeds the amount
arranged to be paid from that account by an agreement made with the bank.

All those ingredients are to be found to be present for proving an offence under Section 138 of the Act.

2. INTERPRETATION OF STATUTES - Penal Statutes - Principles of Construction - Statutes, Penal in

nature must receive a strict interpretation.

3. JURISPRUDENCE - Criminal - Cordianl principle of criminal Jurisprudence is that for Commission of an

offence, mens rea is to be proved.

4. INTERPRETATION OF STATUTES - Heading of a Section in a statute cannot either control, restrict or

restrain the scope of the section where language in the section is unambiguous and clear.

Case law relied on :

i) A.I.R.1990 SC 689 : M/s.Frick India Ltd. vrs. Union of India.

5. NEGOTIABLE OF INSTRUMENTS ACT, 1984 - Section 138 - Language of the Section confines the
liability arising out of dishonouring of a cheque for the specified reasons provided in the Section - criminal
liability cannot be extended to dishounour of cheques for other reasons apart from what is provided in the
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 Unknown vs M/S.Utkal Asbestos Ltd. on 1 January, 1800

Section by judicial interpretation.

Case laws relied on :

i) 1992(2) Crimes 919 :Thomas Varghese vrs. P.Jerome

Case laws referred to :

i) 1992(2) Crimes 215 : M/s. Union Road Wages(P)Ltd. vrs. Shah Ramanlal Satesh Kumar and another.

ii) 1990(2) Bank C.I.R.416: Abdul Sanad vrs. Satya Narayan Maheswar.

iii) 1991(1) K.L.T. 37: Hunasikaltinath vrs. State of Karnataka.

Case law held not good law:

1993(1) Crimes 268 : Ramesh Nam Kumar Porwal vrs. Narayan Dhondu Joglekar and another.

6. BANKING,PUBLIC FINANCE INSTITUTIONS AND NEGOTIABLE INSTRUMENTS LAWS

(AMENDMENT) ACT,1988 - Object of legislation is to create criminal liability for unscrupulous issue of
cheque without having the intention to pay.

7. CODE OF CRIMINAL PROCEDURE,1973 - Section 482 -Scope of quashing prosecution under Section
138 of Negotiable Instrument Act, 1884 - Neither the complainant in the complaint nor in the initial statement
comes forward with a case that the cheque is refused to be paid due to actual shortage of funds in the account
of the accused to meet the cheque or that the cheque amount is for one which exceeds the amount agreed to be
paid by the bank on that account - Held, offence under Section 138 of the Act is not made out and the
prosecution is liable to be quashed in exercise of power under Section 482 Cr.P.C.(para-14).

Case laws referred to :

i) 1992(2) Crimes 1047 : Rama Gupta vrs. Bakemen's Home products.

ii) 1992(1) Crimes 5 : Mrs. R.Jayalaxmi vrs. Mr.Rashida.

iii) 1993(1) Crimes 394 : M/s.Embee Textiles Ltd. vrs. Sadhu Ram.

iv) 1993(I) Crimes 679 : Prasanna vrs. Vijayalaxshmi.

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