APHC010716512022 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI ij THURSDAY,THE SIXTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE DR JUSTICE VENKATA JYOTHIRMAI PRATAPA CRIMINAL PETITION NO: 10492 OF 2022 Between: 1. M/s.Sadhana Constructions, reptd., by its Managing Partner, Pabbatireddy Narisireddy, s/o Sattireddy, Hindu, aged 52 years, 17- 42/1, Srinagar Colony, Dilsukhnagar, Hyderabad. 2. Pabbatireddy Narisireddy, s/o Satiireddy, Hindu, aged 52 years, resident of #3-6-125, Plot No. 204, Street No. 18, Samrajyalakshmi Apartments, Besides Madina plic School, Himayatnagar, Hyderabad. 3. Pabbatireddy Anita, w/o Narisireddy, Hindu, 43 years, resident of #3-6- 125, Plot No. 204, Street No. 18, Samrajyalakshmi Apartments, Besides Madina Public School, Himayatnagar, Hyderabad. ...Petitioners/Accused in CC.No.92 of 2022 AND 1. The State of Andhra Pradesh, reptd.. Public Prosecutor, High Court of AP., Amaravati. ...Respondent 2. Ammireddy Muralidharreddy, s/o late Mattareddy, Hindu, 417.-years, #31-60-3/37, Greenlands Colony, VUDA Phase-IV, resident of Kurmannapalem, Vizag. ...Respondent/Complainant in CC.No.92 of 2022 Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to call for the records and quash the private complaint in CC No. 92/2022 on the file of the learned VIII AddnI. Chief Metropolitan Magistrate, Gajuwaka. lA NO: 1 OF 2022 Petition under Section 482 of Cr.P.C praying that in the circumstances stated in the Memorandum of Grounds of Criminal Petition, the High Court may be pleased to stay all further proceedings in CC No. 92/2022 of the VIII AddnI. Chief Metropolitan Magistrate, Gajuwaka including personal appearance of the accused pending disposal of the Criminal Petition. This Petition coming on for hearing, upon perusing the Memorandum of Grounds of Criminal Petition and upon hearing the arguments of Sri V.V.Ravi Prasad, Advocate for the Petitioners and the Public Prosecutor on behalf of the Respondent No.2 and of Sri V.V.Satish, Advocate for the Respondent No.2 on the file The Court made the following order: APHC010716512022 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3396] THURSDAY, THE SIXTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE DR. JUSTICE VENKATA JYOTHIRMAI PRATAPA CRIMINAL PETITION NO: 10492/2022 Between: 1.M/S.SADHANA CONSTRUCTIONS, S REPTD., BY ITS MANAGING PARTNER, PABBATIREDDY NARISIREDDY, S/0 SATTIREDDY, HINDU, AGED 52 YEARS, 17-42/1, SRINAGAR COLONY, DILSUKHNAGAk, HYDERABAD. 2.PABBATIREDDY NARISIREDDY, S/0 SATTIREDDY, HINDU, AGED 52 YEARS, RESIDENT OF 3-6-125, PLOT NO. 204, STREET NO. 18, SAMRAJYALAKSHMI APARTMENTS, BESIDES MADINA PLIC SCHOOL, HIMAYATNAGAR, HYDERABAD. 3.PABBATIREDDY ANITA, W/0 NARISIREDDY, HINDU, 43 YEARS, RESIDENT OF 3-6-125, PLOT NO. 204, STREET NO. 18, SAMRAJYALAKSHMI APARTMENTS, BESIDES MADINA PUBLIC SCHOOL, HIMAYATNAGAR, HYDERABAD. ...PETITIONER/ACCUSED(S) AND 1.THE STATE OF ANDHRA PRADESH, REPTD., PUBLIC PROSECUTOR, HIGH COUIT OF AP., AMARAVATI. 2.AMMIREDDY MURALIDHARREDDY, S/0 LATE MATTAREDDY, HINDU, 417.-YEARS, RESIDENT OF 31-60-3/37, GREENLANDS COLONY, VUDA PHASE-IV, KURMANNAPALEM, VIZAG ..RESPONDENT/COMPLAINANT(S): Counsel for the Petitioner/accused(S): 1.VVRAVI PRASAD Counsel for the Respondent/compiainant(S): 1. PUBLIC PROSECUTOR (AP) 2.VVSATISH The Court made the following: ORDER The instant petition under Section 482 of Code of Criminal 1973^ has been filed by the Petitioners/Accused the proceedings against them in C.C.No.92 of 2022 Procedure, Nos.1 to 3, seeking to quash on the file of the Court of VIII Additional Chief Metropolitan Magistrate, Gajuwaka, for the offence under Sections 138 read with 142 of the Negotiable Instruments Act, 1881 2. Heard Sri V.V.Ravi Prasad, learned V.V.Satish, learned counsel for Respondent No.2 counsel for the Petitioners and Sri Ms.K.Priyanka Lakshmi, learned Assistant Public Prosecutor is in attendance. Learned counsel for the Petitioners 3. would submit that there is no contractual obligation between the Petitioners and Respondent signature on the subject cheque is a rank forgery. Learned counsel would further submit that the bank account of A,1-Firm was closed as it No.2 and the was declared as NPA, as such, the question of issuance of the subject cheque does not arise. It is further submitted that the filing of the present complaint basing on the forged negotiable instrument for unlawful gain, itself is a sheer abuse of process of law. Learned counsel would finally pray for quashment of the case against the Petitioner. 4. Learned counsel for Respondent No.2 would submit that of the cheque, it is the duty of the drawer of the said account and make arrangements for honour of the to maintain that account and sufficient funds with after issuance said cheque to maintain the cheque and if he fails the Bank to honour the ' for short ‘Cr.P.C’ ^ for short 'the Act’ 3 cheque, it amounts of the commission of the offence under Section 138 of the N.I.Act. Learned counsel would further submit that, once the cheque was issued by the drawer, it shall be presumed that the same has been issued by the drawer for discharge of a legally enforceable debt. It is submitted that the contentions raised by the Petitioners have to be established during trial and they cannot be considered while exercising the power under Section 482 Cr.P.C. Hence, prayed for dismissal of the petition. Point for determination: Having heard the submissions of the learned counsel representing both the parties, now the point that would emerge for determination is: Whether there are any justifiable grounds for quashment of the proceedings against the Petitioners/Accused No. 1 to 3 in C.C.No.92 of 2022 on the file of the Court of VIII Additional Chief Metropolitan Magistrate, Gajuwaka? Determination by the Court: 5. 6. A bare perusal of Section 482 Cr.P.C makes it clear that the Code envisages that inherent powers of the High Court are not limited or affected so as to make orders as may be necessary; (i) to give effect to any order under the Code or, (ii) to prevent abuse of the process of any Court or, otherwise (iii) to secure ends of justice. A court while sitting in Section 482 Cr.P.C jurisdiction is not functioning as a court of appeal or a court of revision. It must exercise its powers to do real and substantial justice, depending on the facts and circumstances of the case. These powers must be invoked for compelling reasons of abuse of process of law sound principles of criminal jurisprudence glaring injustice, which are against or 7. The case of Respondent No.2/Complaina firm under the name and style of Sadhana C and 3, who are the husband wife, respectively of A. 1-firm. nt is that. Accused No.1 is the onstructions and Accused Nos.2 are the Managing Partner and Partner Accused Nos.2 and 3 had jointly borrowed an Complainant on 02.09.2016 for the amount of Rs.60.00 lakhs from the business of A. 1-firm and Accused No.2 in favour of the Complainant for the with interest @ 24% per annum. executed a demand promissory note said amount agreeing to repay the same Subsequently, after repeated demands, ■ l-firm had issued a Accused No.1 in the capacity of Managing Partner of A Cheque bearing No.404493, dated 08.03.2019 for an amount of Rs.70.00 Hyderabad towards said cheque was disnonoured with lakhs drawn on Karnataka Bank, Dilsukhnagar branch part-payment and on presentation, the an endorsement “Account Closed a registered legal notice dated 29.03.2019 the cheque amount, they neither The main contention of the learned since the bank account of A. 1-Firm Petitioner/Accused No.2 could the offence under Section Petitioners. on 11.03.2019. Though the Complainant to the Accused demanding to gave any reply nor paid any amount, counsel for the Petitioners is that, was closed as it was declared as NPA not have issued the said cheque and hence, 138 of Nl Act is not made out against the sent pay 8. 5 The Hon’ble Apex Court in NEPC Micon Ltd., vs. Magma Leasing 9. Ltd.,^ held as follows: “7. Further, the offence will be complete only when the conditions in the proviso (a), (b) and (c) are complied with. Hence, the question is, in a case where cheque is returned by the bank unpaid on the ground that the account is closed, would it mean that cheque is returned as unpaid on the ground that the amount of money standing to the credit of that account is insufficient to honour the cheque. In our view, the answer would obviously be in the affirmative because cheque is dishonoured as the amount of money standing to the credit of that account was nil at the relevant time apart from it being closed. Closure of the account would be an eventuality after the entire amount in the account is withdrawn. It means that there was no amount in the credit of that account on the relevant date when the cheque was presented for honouring the same. The expression the amount of money standing to the credit of that account is insufficient to honour the cheque is a genus of which the expression that account being closed is specie. After issuing the cheque drawn on an account maintained, a person, if he closes that account apart from the fact that It may amount to another offence, it would certainly be an offence under Section 138 as there was insufficient or no fund to honour the cheque in that account; Further, cheque is to be drawn by a person for payment of any amount of money due to him on an account maintained by him with a banker and only on that account cheque should be drawn. This would be clear by reading the Section along with provisos (a), (b) & (c). Secondly, proviso (c) gives an opportunity to the drawer of the cheque to pay the amount within 15 days of the receipt of the notice as contemplated in proviso (b). Further, Section 140 provides that it shall not be a defence in prosecution for an offence under Section 138 that the drawer has no reason to believe when he issued the cheque that the cheque may be dishonoured on presentment for the reasons stated in that Section. Dishonouring the cheque on the ground that account is closed is the consequence of the act of the drawer rendering his account to a cipher. Hence, reading Section 138 and 140 together, it would be clear that dishonour of the cheque by a bank on the ground that account is closed would be covered by the phrase the amount of money standing to the credit of that account is Insufficient to honour the cheque. 8. Learned Counsel for the appellants, however, submitted that Section 138 being a penal provision, it should be strictly Interpreted and if there is any omission by the Legislature, wider meaning should not be given to the words than what Is used in the Section. In our view with regard to penal provision, any Interpretation, which withdraws life and blood of the provision and makes it ineffective and a dead letter should be averted. If the interpretation, which is sought for, were given. 9. even ’ (1999)4 see 253 then it would only encourage dishonest persons to issue cheques and before presentation of the cheque close that account and thereby escape from the penal consequences of Section 138.” From the aforementioned judgment, it is crystal clear that, when a cheque is returned unpaid by a Bank with an endorsement “Account Closed”, it would amount to returning the cheque unpaid because the amount standing to the credit of such account is insufficient to honour the cheque envisaged in Section 138 of the N.I.Act. The return of cheque by the drawee Bank alone constitutes the commission of offence under Section 138 of the N.I.Act. In view of the same, the contention of the Petitioners that the bank account of A. 1-Firm was closed as it was declared as NPA, as such, the question of issuance of the subject cheque does not arise, is not tenable. The other contentions raised by the learned counsel for the Petitioners are the matter of trial and they cannot be decided at this stage, while exercising the jurisdiction under Section 482 Cr.P.C. There are no tenable grounds to quash the case against the Petitioners. The petition lacks merit and the liable to be dismissed. Without prejudice to the defences available, the Criminal Petition i 10. was same is 11. IS dismissed. Pending miscellaneous petitions, if any, shall stand closed. Sd/- A VIJAYA BABU ASSISTANT REGISTRAR //TRUE COPY// ECTION OFFICER To, 1. The VIII Additional Chief Metropolitan Magistrate, Gajuwaka. 2. One CC to Sri. V V Ravi Prasad, Advocate [OPUC] 3. OneCCto Sri. VV Satish, Advocate [OPUC] 4. Two CC to the Public Prosecutor, High Court of Andhra Pradesh [OUT] 5. Two CD Copies Nsr sree * (» HIGH COURT DATED:06/02/2025 ORDER CRLP NO. 10492 OF 2022 ^ n^*m % ^ . Current seciion ^ DISMISSING THE CRIMINAL PETITION