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Friday, November 30, 2012

Eve-Teasing is a euphemism, a conduct which attracts penal action but it is seen, only in one State, a Statute has been enacted, that is State of Tamil Nadu to contain the same, the consequence of which may at times drastic. Eve-teasing led to the death of a woman in the year 1998 in the State of Tamil Nadu which led the Government bringing an ordinance, namely, the Tami Nadu Prohibition of Eve-Teasing Ordinance, 1998, which later became an Act, namely, the Tamil Nadu Prohibition of Eve-Teasing Act, 1998 The burden is on the prosecution to prove that the accused had uttered the words or made the sound or gesture and that such word, sound or gesture was intended by the accused to be heard or seen by some woman. Normally, it is difficult to establish this and, seldom, woman files complaints and often the wrong doers are left unpunished even if complaint is filed since there is no effective mechanism to monitor and follow up such acts. The necessity of a proper legislation to curb eve-teasing is of extreme importance, even the Tamil Nadu Legislation has no teeth.the mere acquittal of an employee by a criminal court has no impact on the disciplinary proceedings initiated by the Department. The respondent, it may be noted, is a member of a disciplined force and non examination of two key witnesses before the criminal court that is Adiyodi and Peter, in our view, was a serious flaw in the conduct of the criminal case by the Prosecution. Considering the facts and circumstances of the case, the possibility of winning order P.Ws. 1 and 2 in the criminal case cannot be ruled out. We fail to see, why the Prosecution had not examined Head Constables 1368 Adiyodi and 1079 Peter of Tenkasi Police Station. It was these two Head Constables who took the respondent from the scene of occurrence along with P.Ws. 1 and 2, husband and wife, to the Tenkasi Police Station and it is in their presence that the complaint was registered. In fact, the criminal court has also opined that the signature of PW 1 (husband – complainant) is found in Ex.P1 – Complaint. Further, the Doctor P.W.8 has also clearly stated before the Enquiry Officer that the respondent was under the influence of liquor and that he had refused to undergo blood and urine tests. That being the factual situation, we are of the view that the respondent was not honourably acquitted by the criminal court, but only due to the fact that PW 1 and PW 2 turned hostile and other prosecution witnesses were not examined. =The Parliament is currently considering the Protection of Woman against Sexual Harassment at Workplace Bill, 2010, which is intended to protect female workers in most workplaces. Provisions of that Bill are not sufficient to curb eve-teasing. Before undertaking suitable legislation to curb eve-teasing, it is necessary to take at least some urgent measures so that it can be curtailed to some extent. In public interest, we are therefore inclined to give the following directions: 1) All the State Governments and Union Territories are directed to depute plain clothed female police officers in the precincts of bus-stands and stops, railway stations, metro stations, cinema theatres, shopping malls, parks, beaches, public service vehicles, places of worship etc. so as to monitor and supervise incidents of eve-teasing. 2) There will be a further direction to the State Government and Union Territories to install CCTV in strategic positions which itself would be a deterrent and if detected, the offender could be caught. 3) Persons in-charge of the educational institutions, places of worship, cinema theatres, railway stations, bus-stands have to take steps as they deem fit to prevent eve-teasing, within their precincts and, on a complaint being made, they must pass on the information to the nearest police station or the Women’s Help Centre. 4) Where any incident of eve-teasing is committed in a public service vehicle either by the passengers or the persons in charge of the vehicle, the crew of such vehicle shall, on a complaint made by the aggrieved person, take such vehicle to the nearest police station and give information to the police. Failure to do so should lead to cancellation of the permit to ply. 5) State Governments and Union Territories are directed to establish Women’ Helpline in various cities and towns, so as to curb eve-teasing within three months. 6) Suitable boards cautioning such act of eve-teasing be exhibited in all public places including precincts of educational institutions, bus stands, railway stations, cinema theatres, parties, beaches, public service vehicles, places of worship etc. 7) Responsibility is also on the passers-by and on noticing such incident, they should also report the same to the nearest police station or to Women Helpline to save the victims from such crimes. 8) The State Governments and Union Territories of India would take adequate and effective measures by issuing suitable instructions to the concerned authorities including the District Collectors and the District Superintendent of Police so as to take effective and proper measures to curb such incidents of eve-teasing. 33. The Appeal is accordingly allowed with the above directions and the judgment of the High Court is set aside. However, there will be no order as to costs.


                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPEALLATE JURISDICTION

                      CIVIL APPEAL NO. 8513     OF 2012
                  (Arising out of SLP(C) No.31592 of 2008)


The Deputy Inspector General
of Police & Anr.                                         …..Appellants

                                   versus

S. Samuthiram                                           ….. Respondent

                               J U D G M E N T


K.S. Radhakrishnan, J.


1.    Leave granted.
2.    Eve-Teasing is a euphemism, a conduct which attracts penal action  but
it is seen, only in one State, a Statute has been enacted, that is State  of
Tamil Nadu to contain the same,  the  consequence  of  which  may  at  times
drastic.  Eve-teasing led to the death of a woman in the year  1998  in  the
State of Tamil Nadu which led the Government bringing an ordinance,  namely,
the Tami Nadu  Prohibition  of  Eve-Teasing  Ordinance,  1998,  which  later
became an Act, namely, the Tamil Nadu Prohibition of Eve-Teasing  Act,  1998
[for short ‘the Eve-Teasing Act’].  The Statement of Objects and Reasons  of
the Eve-Teasing Act reads as follows:
            “Eve-teasing in public places  has  been  a  perennial  problem.
        Recently, incidents of eve-teasing leading to serious  injuries  to,
        and even death of a woman have come to the notice of the Government.
         The Government are of the view that  eve-teasing  is  a  menace  to
        society as a whole and has to be eradicated.  With this in view, the
        Government decided to prohibit eve-teasing in  the  State  of  Tamil
        Nadu.


            2.  Accordingly,  the  Tamil  Nadu  Prohibition  of  Eve-teasing
        Ordinance, 1998 (Tamil Nadu Ordinance No. 4 of 1998) was promulgated
        by the Governor and  the  same  was  published  in  the  Tamil  Nadu
        Government Gazette Extraordinary, dated the 30th July, 1998.

      3. The Bill seeks to replace the said Ordinance.”

3.    We are in this case concerned with a situation where a member  of  the
law enforcement agency, a police personnel, himself was caught  in  the  act
of eve-teasing of a married  woman  leading  to  criminal  and  disciplinary
proceeding, ending in his dismissal from service, the legality of  which  is
the subject matter of this appeal.

4.    The respondent herein, while he was on duty  at   the  Armed  Reserve,
Palayamkottai was deputed for Courtallam season Bandobust duty  on  9.7.1999
and he reported for duty on that date at 8.30 PM at  the  Courtallam  Season
Police out post.  
At about 11.00 PM he visited the Tenkasi bus  stand  in  a
drunken state and misbehaved and eve-teased a married lady, who was  waiting
along with her husband, to board a  bus.  
The  respondent  approached  that
lady with a dubious intention and threatened both husband and  wife  stating
that he would book a case against the husband unless  the  lady  accompanied
him.  Further, he had disclosed his identity as a police man.
 Both  husband
and wife got panic and complained to a police man,  namely,  Head  Constable
Adiyodi  (No.1368)  who  was  standing  along  with  Head  Constable   Peter
(No.1079) of Tenkasi Police Station on the opposite side of  the  bus-stand.
They were on night duty at the bus stand.
 They rushed to the spot and  took
the respondent into custody and brought him to Tenkasi Police Station  along
with the husband and wife.  Following  that,  a  complaint  No.625/1999  was
registered on 10.7.1999 at that Police Station against the respondent  under
Section 509 of the Indian Penal Code and under Section 4 of the  Eve-teasing
Act.  On 10.7.1999, at about 1.25 hrs., the  respondent  was  taken  to  the
Government Hospital Tenkasi for medical examination.  There he was  examined
by Dr. N. Rajendran, who issued a Certificate of  Drunkenness,  which  reads
as follows:




      “Symptoms at the time of examination:
      Breath smell of alcohol,  Eye  congested,  Retina  expanded,  sluggish
      reaction to light, speech and activities normal, pulse rate 96,  Blood
      pressure 122/85.  I am of opinion that the above person:
      (i) consumed alcohol but is not under its influence.


      Station: Tenkasi                  Name: N. Rajendran
      Date: 10.07.1999                  (Sd/- dt.10.07.1999)


                                              Civil Surgeon


            I am not willing to undergo blood and urine test.


                                   Sd/- S. Samuthiram, PC 388”



5.    The respondent was then placed under suspension  from  10.7.1999  (FN)
as per DO.1360/1999 in C.No.P1/34410/1999 vide  order  dated  18.7.1999  and
departmental proceedings were initiated under Rule 3(b) of  the  Tamil  Nadu
Police Subordinate Service (Disciplinary and Appeal) Rules, 1955  (in  short
‘Tamil  Nadu  Service  Rules’)  for  his  highly  reprehensible  conduct  in
behaving in a disorderly manner to a married lady  in  a  drunken  state  at
Tenkasi bus stand on 9.7.1999.  Further, it was also  noticed  that  he  was
absent from duty from 07.00 hrs on 10.7.1999 to 03.45 hrs.

6.    The  Deputy  Superintendent  of  Police,  Armed  Reserve,  Tiruneveli,
conducted a detailed domestic enquiry and after  examining  ten  prosecution
witnesses and perusing fourteen prosecution documents and after hearing  the
defence witnesses, submitted a  report  dated  22.11.1999  finding  all  the
charges proved against the delinquent  respondent.   The  Superintendent  of
Police, Tiruneveli after carefully perusing  the  enquiry  report  dismissed
the respondent from service on 4.1.2000.

7.    The respondent, aggrieved by the dismissal order, filed  O.A.  No.1144
of 2000 before the Tamil Nadu Administrative Tribunal, Chennai.   While  the
O.A. was pending before  the  Tribunal,  the  Judicial  Magistrate,  Tenkasi
rendered the judgment in S.T.C No.613 of 2000 on 20.11.2000  acquitting  the
respondent of all the charges.  The  judgment  of  the  Criminal  Court  was
brought to the notice of the Tribunal and it  was  submitted  that,  on  the
same set of facts, the delinquent be not proceeded within  the  departmental
proceeding.  The judgment of this Court in Capt. M. Paul Anthony  v.  Bharat
Gold Mines Ltd. and Another (1999) 3 SCC 679  was  also  placed  before  the
Tribunal in support of that contention.


8.    The Tribunal noticed that both, husband and wife, deposed  before  the
Enquiry Officer that the respondent had committed  the  offence,  which  was
supported by the other prosecution witnesses, including  the  two  policemen
who  took  the  respondent  in  custody  from   the   place   of   incident.
Consequently, the Tribunal took the view that no reliance  could  be  placed
on the judgment of the criminal court.  The O.A. was  accordingly  dismissed
by the Tribunal vide order dated 23.3.2004.  The  order  was  challenged  by
the respondent in a Writ Petition No.13726 of 2004 before the High Court  of
Madras.  The  High  Court  took  the  view  that  if  a  criminal  case  and
departmental proceedings against an official are based on the  same  set  of
facts and evidence and the criminal case ended in  an  honourable  acquittal
and not  on  technical  grounds,  imposing  punishment  of  removal  of  the
delinquent official from service, based on the findings of domestic  enquiry
would not be legally sustainable.  The High Court also took  the  view  that
the version of the doctor who was examined as PW8 and Ext.  P-4  certificate
issued by him, could not be considered as sufficient material  to  hold  the
respondent guilty and that he had consumed alcohol,  but  was  found  normal
and had no adverse  influence  of  alcohol.    The  High  Court,  therefore,
allowed the writ petition and set aside the impugned  order  dismissing  him
from service.  It was further ordered  that  the  respondent  be  reinstated
with continuity of service forthwith, with  back  wages  from  the  date  of
acquittal in the criminal case, till payment.

9.    The State, aggrieved by the said judgment has  filed  this  appeal  by
special leave through the Deputy Inspector General of Police.

10.   Shri C. Paramasivam, learned  counsel  appearing  for  the  appellant,
submitted that  the  High  Court  was  not  justified  in  interfering  with
disciplinary proceedings and setting aside the order  of  dismissal  of  the
respondent.   Learned counsel submitted that the High Court  overlooked  the
fact that the standard of proof in a domestic enquiry and  criminal  enquiry
is different.  The mere acquittal by the criminal  Court  does  not  entitle
the delinquent for exonerating in  the  disciplinary  proceedings.   Learned
counsel also submitted that the case in hand  is  not  where  punishment  of
dismissal was imposed on the basis of conviction in  a  criminal  trial  and
only, in such situation, acquittal by a Court  in  a  criminal  trial  would
have some relevance.  Further, it was also pointed out that, in the  instant
case, the respondent was not honourably acquitted  by  the  criminal  Court,
but was acquitted since complainant turned hostile.



11.   Shri V. N. Subramaniam, learned counsel appearing for the  respondent,
supported  the  findings  recorded  by  the  High  Court.   Learned  counsel
submitted that the judgment of the criminal court acquitting the  respondent
has to be construed as an  honourable  acquittal  and  that  the  respondent
cannot be proceeded with on the same set of facts on which he was  acquitted
by a criminal court.  Learned counsel also placed reliance on  the  judgment
of this Court in Capt. M. Paul case (supra).

12.   We may first deal with the departmental proceedings initiated  against
the respondent.

DEPARTMENTAL PROCEDINGS:

13.   We may indicate that the following were the charges  levelled  against
the respondent in the departmental  proceedings  and  a  charge  memo  dated
24.8.1999 was served on the respondent:

         i) Reprehensible conduct in having behaved in a  disorderly  manner
            in a drunkenness mood at Tenkasi Bus-stand on 9.7.1999 at  23.00
            hrs.

        ii) Highly reprehensible conduct in eve-teasing Pitchammal (44/1999)
            W/o. Vanamamalai of Padmaneri in the presence of her husband and
            having approached her with a dubious intention  on  9.7.1999  at
            23.00 hrs. and thereby getting involved in a  criminal  case  in
            Tenkasi P.S. Cr. No. 625/1999 under Section 509 IPC and  Section
            4 of the Tamil Nadu Prohibition of  Eve-Teasing  Ordinance  Act,
            1998 and

       iii) Highly reprehensible conduct in having absented from  duty  from
            10.7.1999 at 07.00 hrs onward till 03.45 hrs.

14.   The charges  were  inquired  into  by  the  Deputy  Superintendent  of
Police, Armed Reserve Tirunelveli.  The prosecution examined  ten  witnesses
and fourteen documents were produced. On the side of  the  defence,  D.W.  1
and D.W. 2 were examined.  After examining the witnesses on either side  and
after giving an opportunity of hearing, the Enquiry Officer  found  all  the
three charges proved beyond reasonable doubt.   P.Ws.  4  and  5,  who  were
Head Constables 1368 Adiyodi of Tenkasi Police Station  and  Head  Constable
1079 Peter of Tenkasi Police Station, clearly narrated the  entire  incident
and the involvement of the respondent, so also PW 6, the Head  Constable  of
Tenkasi Police Station.   The Enquiry Officer  clearly  concluded  that  the
evidence tendered by  the  prosecution  witnesses  P.Ws.  4,  5  and  6  and
prosecution documents 3, 4 and 5 would clearly  prove  the  various  charges
levelled against him.  The Medical Officer of the  Government  Hospital  had
also certified that the delinquent  had  consumed  liquor  and  he  was  not
cooperating for urine and blood tests.  The Enquiry Officer also found  that
the delinquent ought to have reported for duty at the  out-post  station  on
10.7.1999 at 07.00 hrs. as per the instruction given to him on  9.7.1999  at
20.30 hrs., while he  reported  for  courtallam  season  Bandobust  duty  at
season out-post police station.  But, it was found that the  delinquent  had
failed to report for duty.  Further, he had also indulged  in  the  activity
of eve-teasing a married woman.  After  finding  the  delinquent  respondent
guilty of all the charges, the Enquiry Officer submitted  its  report  dated
22.11.1999.  The Superintendant of Police, Tirunelveli  concurred  with  the
findings of the Enquiry Officer and  held  that  the  charges  were  clearly
proved beyond reasonable doubt.  It was held that  the  respondent  being  a
member of a disciplined force  should  not  have  behaved  in  a  disorderly
manner and that too in a drunken state, in a public place,  and  misbehaving
with a married woman.  It was held that the said conduct of  the  respondent
would  undermine  the  morale  of  the  police  force,   consequently,   the
Superintendant of Police awarded the punishment of  dismissal  from  service
on the respondent, vide its proceeding dated 4.1.2000.  The respondent  then
filed an appeal before the Inspector General of Police, which  was  rejected
vide his proceeding dated 10.3.2000.  Respondent then filed  an  application
in O.A. No. 1144 of 2000 before  the  Tamil  Nadu  Administrative  Tribunal.
While O.A. was  pending,  the  delinquent  was  acquitted  of  the  criminal
charges.

CRIMINAL PROCEEDINGS:

15.   We have indicated that a criminal case  was  also  registered  against
the respondent by the Tenkasi Police Station being Crime No. 625/1999  under
Section 509 IPC and Section 4  of  the  Eve-Teasing  Act,  1998,  which  was
registered as STC 613 of  2002  before  the  Judicial  Magistrate,  Tenkasi.
Before the Criminal Court, PW 1 and PW 2, the husband and the wife  (victim)
turned hostile.  Prosecution then did not take steps to examine the rest  of
the prosecution  witnesses.   Head  Constable  (No.1368)  Adiyodi  and  Head
Constable (No.1079) Peter of Tenkasi Police Station were crucial  witnesses.
 Facts  would  clearly  indicate  that  it  was  the  above  mentioned  Head
Constables who took the respondent to  Tenkasi  Police  Station  along  with
P.Ws. 1 and 2, though P.Ws. 1 and 2 had clearly deposed before  the  Enquiry
Officer of the entire incident including the fact that the  above  mentioned
two Head Constables had taken the respondent along with P.Ws.1 and 2 to  the
Tenkasi Police Station.  The Criminal Court took the view that since P.W.  1
and  P.W.  2  turned  hostile,  the  criminal  case   got   weakened.    The
prosecution, it may  be  noted  also  took  no  step  to  examine  the  Head
Constables by name 1368 Adiyodi and 1079 Peter of  Tenkasi  Police  Station,
so also the Doctor P.W.8 before the  criminal  Court.   It  was  under  such
circumstances that the criminal  Court  took  the  view  that  there  is  no
evidence to implicate the respondent-accused,  consequently,  he  was  found
not guilty under Section 509 IPC read with Section 4 of the Eve-Teasing  Act
and was, therefore, acquitted.

16.   We may indicate that before the order of acquittal was passed  by  the
Criminal Court on 20.11.2000, the Departmental  Enquiry  was  completed  and
the respondent was dismissed from service  on  4.1.2000.   The  question  is
when the departmental enquiry has been concluded resulting in the  dismissal
of the delinquent from service,  the  subsequent  finding  recorded  by  the
Criminal Court acquitting the respondent delinquent, will  have  any  effect
on the departmental proceedings.   The  propositions  which  the  respondent
wanted to canvass placing reliance on the judgment in Capt. M. Paul  Anthony
case (supra) read as follows:

            “(i) Departmental proceedings and  proceedings  in  a  criminal
      case can proceed simultaneously as there is  no  bar  in  their  being
      conducted simultaneously, though separately.
           (ii) If the departmental proceedings and the criminal  case  are
      based on identical and similar set of facts  and  the  charge  in  the
      criminal case against the delinquent employee is  of  a  grave  nature
      which involves complicated questions of law  and  fact,  it  would  be
      desirable to stay the departmental proceedings till the conclusion  of
      the criminal case.
           (iii) Whether the nature of a charge in a criminal case is grave
      and whether complicated questions of fact and law are involved in that
      case, will depend upon the nature of offence, the nature of  the  case
      launched against the employee on the basis of  evidence  and  material
      collected against him during investigation  or  as  reflected  in  the
      charge-sheet.
           (iv) The factors mentioned at (ii) and  (iii)  above  cannot  be
      considered in isolation to stay the departmental proceedings  but  due
      regard has to be given to the fact that the  departmental  proceedings
      cannot be unduly delayed.
           (v)   If the criminal case does not proceed or its  disposal  is
      being unduly delayed, the departmental proceedings, even if they  were
      stayed on account of the pendency of the criminal case, can be resumed
      and proceeded with so as to conclude them at an early date, so that if
      the employee is found not guilty his honour may be vindicated  and  in
      case he is found guilty, the administration may get rid of him at  the
      earliest.”





17.   This Court, in Southern Railway  Officers’  Association  v.  Union  of
India (2009) 9 SCC 24, held that acquittal in  a  criminal  case  by  itself
cannot be a ground for interfering with an order of  punishment  imposed  by
the Disciplinary Authority.  The Court reiterated that  order  of  dismissal
can be passed even if the delinquent  officer  had  been  acquitted  of  the
criminal charge.


18.   In State Bank of Hyderabad v. P.Kata  Rao  (2008)  15  SCC  657,  this
Court held that there cannot be any doubt whatsoever that  the  jurisdiction
of the superior Courts in interfering with the finding of  fact  arrived  at
by the Enquiring Officer is limited and  that  the  High  Court  would  also
ordinarily not interfere with the quantum of punishment and there cannot  be
any doubt or dispute that only because the delinquent employee who was  also
facing a criminal charge stands acquitted, the same, by  itself,  would  not
debar  the  disciplinary  authority  in  initiating  a  fresh   departmental
proceeding and/or  where  the  departmental  proceedings  had  already  been
initiated, to continue therewith.  In  that  judgment,  this  Court  further
held as follows:


            “The legal principle enunciated to the effect that on the  same
         set  of  facts  the  delinquent  shall  not  be  proceeded  in   a
         departmental proceedings and in a  criminal  case  simultaneously,
         has, however, been deviated from. The dicta of this Court in Capt.
         M. Paul Anthony v. Bharat Gold Mines Ltd.  and  Another [(1999)  3
         SCC 679], however, remains  unshaken  although  the  applicability
         thereof had been found to  be  dependant  on  the  fact  situation
         obtaining in each case.”





19.   In a later judgment of this Court in Divisional Controller,  Karnataka
State Raod Transport Corporation v. M. G., Vittal  Rao  (2012)  1  SCC  442,
this Court after a detailed survey of various  judgments  rendered  by  this
Court on the issue with regard to the effect of criminal proceedings on  the
departmental enquiry, held that  the  Disciplinary  Authority  imposing  the
punishment of dismissal from service cannot be held to  be  disproportionate
or non-commensurate to the delinquency.

20.   We are of the view that  the  mere  acquittal  of  an  employee  by  a
criminal court has no impact on the disciplinary  proceedings  initiated  by
the Department.  The  respondent,  it  may  be  noted,  is  a  member  of  a
disciplined force and non  examination  of  two  key  witnesses  before  the
criminal court that is Adiyodi and Peter, in our view, was  a  serious  flaw
in the conduct of the criminal case by the  Prosecution.    Considering  the
facts and circumstances of the case, the possibility of winning order  P.Ws.
1 and 2 in the criminal case cannot be ruled out.  We fail to see,  why  the
Prosecution had not examined Head Constables 1368 Adiyodi and 1079 Peter  of
Tenkasi Police Station.  It was these  two  Head  Constables  who  took  the
respondent from the scene of occurrence along with P.Ws. 1  and  2,  husband
and wife, to the Tenkasi Police Station and it is  in  their  presence  that
the complaint was registered.  In fact, the criminal court has  also  opined
that the signature of PW 1 (husband –  complainant)  is  found  in  Ex.P1  –
Complaint.  Further, the Doctor P.W.8 has also  clearly  stated  before  the
Enquiry Officer that the respondent was under the influence  of  liquor  and
that he had refused to undergo  blood  and  urine  tests.   That  being  the
factual  situation,  we  are  of  the  view  that  the  respondent  was  not
honourably acquitted by the criminal court, but only due to  the  fact  that
PW 1 and PW 2 turned  hostile  and  other  prosecution  witnesses  were  not
examined.

Honourable Acquittal

21.   The meaning of the  expression  ‘honourable  acquittal’  came  up  for
consideration before this Court in Management of Reserve Bank of India,  New
Delhi v. Bhopal Singh Panchal (1994) 1 SCC 541. 
 In that  case,  this  Court
has considered the  impact  of  Regulation  46(4)  dealing  with  honourable
acquittal by a criminal court on  the  disciplinary  proceedings.   In  that
context, this Court held  that  the  mere  acquittal  does  not  entitle  an
employee to reinstatement in service, the acquittal, it was held, has to  be
honourable.  The expressions ‘honourable acquittal’, ‘acquitted  of  blame’,
‘fully exonerated’ are unknown to the Code  of  Criminal  Procedure  or  the
Penal Code, which are coined by judicial pronouncements.
 It  is  difficult
to define precisely what is meant by the expression ‘honourably  acquitted’.
 When the accused is  acquitted  after  full  consideration  of  prosecution
evidence and that the prosecution had miserably failed to prove the  charges
levelled against the accused, it can possibly be said that the  accused  was
honourably acquitted.

22.   In R.P. Kapoor v. Union of India, AIR 1964 SC 787, it  was  held  even
in the case of acquittal, departmental  proceedings  may  follow  where  the
acquittal is other than honourable.   In  State  of  Assam  and  another  v.
Raghava Rajgopalachari reported in 1972  SLR  45,  this  Court  quoted  with
approval the views expressed by Lord Williams, J. in (1934) 61 ILR Cal.  168
which is as follows:

        “The expression “honourably acquitted” is one which is  unknown  to
        court of justice.  Apparently it is a form of order used in  courts
        martial and  other  extra  judicial  tribunals.   We  said  in  our
        judgment that we accepted the explanation given  by  the  appellant
        believed it to be true and considered that it ought  to  have  been
        accepted by the  Government  authorities  and  by  the  magistrate.
        Further, we decided that the appellant had not misappropriated  the
        monies referred to in the charge.  It is thus clear that the effect
        of our judgment was that the appellant was acquitted as  fully  and
        completely as it was possible for him to be acquitted.  Presumably,
        this is equivalent to what Government authorities term  ‘honourably
        acquitted’”.



23.   As we have already indicated, in the absence of any provision  in  the
service rule for reinstatement, if an employee is honourably acquitted by  a
Criminal Court, no right is conferred on the employee to claim  any  benefit
including reinstatement.  Reason is that the standard of proof required  for
holding a person guilty by a criminal court and  the  enquiry  conducted  by
way of disciplinary proceeding is entirely different.  In a  criminal  case,
the onus of establishing the guilt of the accused is on the prosecution  and
if it fails to establish the guilt beyond reasonable doubt, the  accused  is
assumed to be innocent.  It is settled law that the strict burden  of  proof
required to establish guilt in  a  criminal  court  is  not  required  in  a
disciplinary proceedings and preponderance of probabilities  is  sufficient.
There may be cases where a person is acquitted for technical reasons or  the
prosecution giving up other witnesses  since  few  of  the  other  witnesses
turned hostile etc.  In the case on hand the prosecution did not take  steps
to examine many of the crucial witnesses on the ground that the  complainant
and his wife turned hostile.  The court, therefore,  acquitted  the  accused
giving the benefit of doubt.  We are not prepared  to  say  in  the  instant
case, the respondent was honourably acquitted  by  the  criminal  court  and
even if it is so, he is not entitled to claim reinstatement since the  Tamil
Nadu Service Rules do not provide so.



24.   We have also come across cases where the service  rules  provide  that
on  registration  of  a  criminal  case,  an  employee  can  be  kept  under
suspension and on acquittal by the criminal court,  he  be  reinstated.   In
such cases, the re-instatement is automatic.  There may be cases  where  the
service rules provide in spite of domestic enquiry, if  the  criminal  court
acquits an employee honourably, he could be  reinstated.   In  other  words,
the issue whether an employee  has  to  be  reinstated  in  service  or  not
depends upon the  question  whether  the  service  rules  contain  any  such
provision  for  reinstatement  and  not  as  a  matter  of  right.      Such
provisions are absent in the Tamil Nadu Service Rules.

25.   In view of the above mentioned circumstances, we are of the view  that
the High Court was not justified in setting aside the punishment imposed  in
the departmental proceedings as  against  the  respondent,  in  its  limited
jurisdiction under Article 226 of the Constitution of India.

26.   We may, in the facts and circumstances of this case, wish to add  some
aspects which are also of considerable public importance.   We  notice  that
there is no uniform law in this country to curb eve-teasing  effectively  in
or within the precinct of educational institutions, places of  worship,  bus
stands, metro-stations, railway stations, cinema theatres,  parks,  beaches,
places of festival, public service vehicles  or  any  other  similar  place.
Eve-teasing generally occurs in public places which, with a  little  effort,
can be effectively curbed.  Consequences  of  not  curbing  such  a  menace,
needless to say, at times disastrous.  There are many instances where  girls
of young age are  being  harassed,  which  sometimes  may  lead  to  serious
psychological problems and even committing suicide.  Every citizen  in  this
country has right to live with dignity and honour  which  is  a  fundamental
right guaranteed under Article 21 of  the  Constitution  of  India.   Sexual
harassment like eve-  teasing  of  women  amounts  to  violation  of  rights
guaranteed under Articles 14, 15 as well.    We notice  in  the  absence  of
effective legislation  to  contain  eve-teasing,  normally,  complaints  are
registered under Section 294 or Section 509 IPC.

27.   Section 294 says that 
“Whoever, to the annoyance of others-  (a)  does
any obscene act in any public place, or (b) sings,  recites  or  utters  any
obscene song; ballad or words,  in  or  near  any  public  place,  shall  be
punished with imprisonment of  either  description  for  a  term  which  may
extend to three months, or with fine, or with both”.



28.   It is for the prosecution to prove  that  the  accused  committed  any
obscene act or the accused  sang,  recited  or  uttered  any  obscene  song;
ballad or words and this was done in or near  a  public  place,  it  was  of
obscene nature and that it had caused annoyance to others.  Normally, it  is
very difficult to establish those facts and, seldom,  complaints  are  being
filed and criminal cases will take years and  years  and  often  people  get
away with no punishment and filing  complaint  and  to  undergo  a  criminal
trial itself is an agony for the complainant, over and  above,  the  extreme
physical or mental agony already suffered.

29.   Section 509 IPC says,
 “Whoever intending to insult the modesty of  any
woman, utters any word, makes any sound or gesture, or exhibits any  object,
intending, that such word or sound shall be heard, or that such  gesture  or
object shall be seen, by such woman, or intrudes upon the  privacy  of  such
woman, shall be punished with simple  imprisonment  for  a  term  which  may
extend to one year, or with fine or with both”.

30.   The burden is on  the  prosecution  to  prove  that  the  accused  had
uttered the words or made the sound or gesture and that such word, sound  or
gesture was intended by the accused to be  heard  or  seen  by  some  woman.
Normally, it is  difficult  to  establish  this  and,  seldom,  woman  files
complaints and often the wrong doers are left unpunished even  if  complaint
is filed since there is no effective mechanism  to  monitor  and  follow  up
such acts. 
 The necessity of a proper legislation to curb eve-teasing is  of
extreme importance, even the Tamil Nadu Legislation has no teeth.

31.   Eve  teasing  today  has  become  pernicious,  horrid  and  disgusting
practice.
The Indian Journal of Criminology  and  Criminalistics  (January-
June 1995 Edn.) has categorized eve teasing into five heads viz.
 (1)  verbal eve teasing;
 (2) physical eve teasing;
(3)  psychological  harassment;
 (4) sexual harassment; and
 (5) harassment through some objects.
 In Vishaka  and
Others v. State of Rajasthan; (1977) 6 SCC 241, this  Court  has  laid  down
certain guidelines on sexual harassments.
 In Rupan Deol Bajaj  and  Another
v. K.P.S. Gill; (1995) 6 SCC 194, this Court has explained  the  meaning  of
‘modesty’ in relation to women.
More and more girl students, women etc.  go
to educational institutions, work places etc. and  their  protection  is  of
extreme importance to a civilized and cultured society. 
 The experiences  of
women and girl children in  over-crowded  buses,  metros,  trains  etc.  are
horrendous and a painful ordeal.

32.   The Parliament  is  currently  considering  the  Protection  of  Woman
against Sexual Harassment at Workplace Bill,  2010,  which  is  intended  to
protect female workers in most workplaces.  Provisions of that Bill are  not
sufficient to curb eve-teasing.  Before undertaking suitable legislation  to
curb eve-teasing, it is necessary to take at least some urgent  measures  so
that it can be curtailed  to  some  extent.   In  public  interest,  we  are
therefore inclined to give the following directions:

   1) All the State Governments and Union Territories are directed to depute
      plain clothed female police officers in the  precincts  of  bus-stands
      and stops, railway stations, metro stations, cinema theatres, shopping
      malls, parks, beaches, public service vehicles, places of worship etc.
      so as to monitor and supervise incidents of eve-teasing.

   2) There will be a further direction to the State  Government  and  Union
      Territories to install CCTV in strategic positions which itself  would
      be a deterrent and if detected, the offender could be caught.

   3) Persons in-charge of the educational institutions, places of  worship,
      cinema theatres, railway stations, bus-stands have to  take  steps  as
      they deem fit to prevent eve-teasing, within their precincts and, on a
      complaint being made, they must pass on the information to the nearest
      police station or the Women’s Help Centre.

   4) Where any incident of eve-teasing is committed  in  a  public  service
      vehicle either by the passengers or  the  persons  in  charge  of  the
      vehicle, the crew of such vehicle shall, on a complaint  made  by  the
      aggrieved person, take such vehicle to the nearest police station  and
      give information to the police.  Failure  to  do  so  should  lead  to
      cancellation of the permit to ply.

   5) State Governments and Union  Territories  are  directed  to  establish
      Women’ Helpline in various cities and towns, so as to curb eve-teasing
      within three months.

   6) Suitable boards cautioning such act of eve-teasing be exhibited in all
      public places including precincts  of  educational  institutions,  bus
      stands, railway stations, cinema theatres,  parties,  beaches,  public
      service vehicles, places of worship etc.

   7) Responsibility  is  also  on  the  passers-by  and  on  noticing  such
      incident, they should also report  the  same  to  the  nearest  police
      station or to Women Helpline to save the victims from such crimes.

   8) The State Governments  and  Union  Territories  of  India  would  take
      adequate and effective measures by issuing  suitable  instructions  to
      the concerned authorities including the District  Collectors  and  the
      District Superintendent of Police so as to take effective  and  proper
      measures to curb such incidents of eve-teasing.



33.   The Appeal is accordingly allowed with the above  directions  and  the
judgment of the High Court is set aside. However, there will be no order  as
to costs.





                                                           …………………………………..J.
                                          (K.S. Radhakrishnan)






                                                           …………………………………..J.
                                             (Dipak Misra)


New Delhi,
November  30, 2012




Whether the dishonour of a cheque on the ground that the signatures of the drawer of the cheque do not match the specimen signatures available with the bank, would not attract the penal provisions of Section 138 of the Negotiable Instruments Act.?=Thus, dishonour of cheques simpliciter for the reasons stated in Section 138 of the NI Act although is sufficient for commission of offence since the presumption of law on this point is no longer res integra,Thus although a petition under Section 482 of the Cr.P.C. may not be entertained by the High Court for quashing such proceedings,= The instant matter however do not relate to a case of ‘stop payment’ instruction to the bank as the cheque in question had been returned due to mismatching of the signatures but more than that the petitioner having neither raised nor proved to the contrary as envisaged under Section 139 of the NI Act that the cheques were not for the discharge of a lawful debt nor making the payment within fifteen days of the notice assigning any reason as to why the cheques had at all been issued if the amount had not been settled, obviously the plea of rebuttal envisaged under Section 139 does not come to his rescue so as to hold that the same would fall within the realm of rebuttable presumption envisaged under Section 139 of the Act. I, therefore, concur with the judgment and order of learned Brother Justice Thakur subject to my views on the dishonour of cheques arising out of cases of ‘stop payment’ instruction to the bank in spite of sufficiency of funds on account of bonafide dispute between the drawer and drawee of the cheque. This is in view of the legal position that presumption in favour of the holder of a cheque under Section 139 of the NI Act has been held by the NI Act as also by this Court to be a rebuttable presumption to be discharged by the accused/drawee of the cheque which may be discharged even at the threshold where the magistrate examines a case at the stage of taking cognizance as to whether a prima facie case has been made out or not against the drawer of the cheque.


                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                   CRIMINAL APPEAL NOS. 1870-1909 OF 2012
             (Arising out S.L.P. (Crl.) Nos. 1740-1779 of 2011)

M/s Laxmi Dyechem                                              …Appellant
      Versus
State of Gujarat & Ors.                         …Respondents
                                    With
                  CRIMINAL APPEAL NOS.   1910-1949 OF 2012
              (Arising out S.L.P. (Crl.) Nos.1780-1819 of 2011)

                               J U D G M E N T
T.S. THAKUR, J.
1.      Leave granted.
2.      These appeals are directed against orders  dated  19th  April,  2010
and 27th August, 2010 passed by the  High  Court  of  Gujarat  at  Ahmedabad
whereby the High Court has quashed 40  different  complaints  under  Section
138 of the Negotiable Instruments Act, 1881 filed by the  appellant  against
the respondents. Relying upon the decision of this Court in  Vinod  Tanna  &
Anr. v. Zaher Siddiqui & Ors. (2002) 7 SCC 541, the  High  Court  has  taken
the view that dishonour of a cheque on the ground  that  the  signatures  of
the drawer of the cheque do not  match  the  specimen  signatures  available
with the bank, would not attract the penal provisions of Section 138 of  the
Negotiable Instruments Act. According to the High Court, the  provisions  of
Section 138 are attracted only  in  cases  where  a  cheque  is  dishonoured
either because the amount of money standing to the  credit  to  the  account
maintained by the drawer is insufficient to pay the  cheque  amount  or  the
cheque  amount  exceeds  the  amount  arranged  to  be  paid  from   account
maintained by the drawer by an agreement made with the bank.   Dishonour  of
a cheque on the ground that the signatures of the drawer do  not  match  the
specimen signatures available with the bank does not, according to the  High
Court, fall in either of these  two  contingencies,  thereby  rendering  the
prosecution of the respondents legally impermissible.  Before we  advert  to
the merits of the contentions urged at the Bar by the learned  counsels  for
the parties, we may briefly set  out  the  factual  backdrop  in  which  the
controversy arises.
3.      The appellant is a  proprietorship  firm  engaged  in  the  sale  of
chemicals.  It has over the past few years  supplied  Naphthalene  Chemicals
to the respondent-company against various invoices and bills issued in  that
regard. The appellant’s case is that a running account  was  opened  in  the
books of account of the appellant in the name of the  respondent-company  in
which the value of the goods supplied was debited from time to time  as  per
the standard accounting practice. A sum  of  Rs.4,91,91,035/-  (Rupees  Four
Crore Ninety One Lac Ninety One Thousand Thirty Five only) was according  to
the appellant outstanding  against the respondent-company  in  the  former’s
books of accounts towards the supplies made to the latter.  The  appellant’s
further case is that the respondent-company issued under the  signatures  of
its authorised signatories several post dated cheques  towards  the  payment
of the amount aforementioned. Several of  these  cheques  (one  hundred  and
seventeen to be precise) when presented were  dishonoured  by  the  bank  on
which the same were drawn, on the ground that the drawers’  signatures  were
incomplete or that no image was found or that the signatures did not  match.
The appellant informed the respondents about the dishonour  in  terms  of  a
statutory notice sent under Section 138 and called  upon  them  to  pay  the
amount covered by the cheques. It is common ground that the  amount  covered
by the cheques was not paid by the respondents  although  according  to  the
respondents the company had by  a  letter  dated  30.12.2008,  informed  the
appellant about the change of the mandate and  requested  the  appellant  to
return the cheques in exchange of fresh cheques. It is also not  in  dispute
that fresh cheques signed by the authorised signatories,  according  to  the
new mandate to the Bank, were  never  issued  to  the  appellant  ostensibly
because the offer to  issue  such  cheques  was  subject  to  settlement  of
accounts, which  had  according  to  the  respondent  been  bungled  by  the
outgoing authorised signatories. The long and short of the  matter  is  that
the cheques remained unpaid despite notice served upon the respondents  that
culminated  in  the  filing  of  forty  different  complaints  against   the
respondents under Section 138 of the Negotiable Instruments Act  before  the
learned trial court who took cognizance of the offence  and  directed  issue
of summons to the respondents for their appearance.  It was  at  this  stage
that Special Criminal Applications No.2118 to 2143 of  2009  were  filed  by
Shri Mustafa Surka accused No.5 who happened to be one  of  the  signatories
to the cheques in question.  The principal contention urged before the  High
Court in support of the prayer for quashing of the proceedings  against  the
signatory to the cheques was that the dishonour of  cheques  on  account  of
the signatures ‘not being complete’ or ‘no image found’ was not a  dishonour
that could constitute  an  offence  under  Section  138  of  the  Negotiable
Instrument Act.
4.      By a common order dated 19th April, 2010,  the  High  Court  allowed
the said petitions, relying  upon  the  decision  of  this  Court  in  Vinod
Tanna’s case (supra) and a decision delivered by a  Single  Judge  Bench  of
the High Court of Judicature at Bombay in Criminal  Application  No.4434  of
2009 and connected matters. The Court observed:
           “In the instant case, there is no dispute about the  endorsement
           that “drawers signature  differs  from  the  specimen  supplied”
           and/or   “no   image   found-signature”    and/or    “incomplete
           signature/illegible” and for return/dishonour of cheque  on  the
           above endorsement will not attract ingredients of Section 138 of
           the Act and insufficient  fund  as  a  ground  for  dishonouring
           cheque cannot  be  extended  so  as  to  cover  the  endorsement
           “signature differed from the specimen supplied” or likewise.  If
           the cheque is returned/bounced/dishonoured on the endorsement of
           “drawers signature differs from the  specimen  supplied”  and/or
           “no  image  found-signature”  and/or  “incomplete  signature   /
           illegible”, the complaint filed under Section 138 of the Act  is
           not maintainable.  Hence, a case is made out to exercise  powers
           under Section 482 of the Code of  Criminal  Procedure,  1973  in
           favour of the petitioner”.


5.      Special Criminal Applications No.896 to 935 of 2010 were then  filed
by the remaining  accused  persons  challenging  the  proceedings  initiated
against them in the complaints filed by the  petitioner  on  the  very  same
ground  as  was  taken  by  Mustafa  Surka.  Reliance  was  placed  by   the
petitioners in the said petitions also upon the decision of  this  Court  in
Vinod Tanna’s case (supra) and the decision of the  Single  Judge  Bench  of
High Court of Bombay in Mustafa Surka v. M/s. Jay  Ambe  Enterprise  &  Anr.
[2010 (1) Bombay Cases Reporter (Crl.) 758].  The High  Court  has,  on  the
analogy of its order dated 19th April, 2010 passed in the earlier  batch  of
cases which order is the  subject  matter  of  SLP  Nos.1780-1819  of  2011,
quashed the proceedings and the complaints even qua  the  remaining  accused
persons, respondents herein. The present appeals, as noticed  above,  assail
the correctness of both the orders passed by  the  High  Court  in  the  two
batch of cases referred to above.
6.      Chapter XVII comprising  Sections  138  to  142  of  the  Negotiable
Instruments Act was introduced in the statute by Act 66 of 1988. The  object
underlying the  provision  contained  in  the  said  Chapter  was  aimed  at
inculcating  faith  in  the  efficacy  of  banking  operations  and   giving
credibility  to  negotiable  instruments  in  business  and   day   to   day
transactions  by  making  dishonour  of  such  instruments  an  offence.   A
negotiable instrument whether the same is in the form of a  promissory  note
or a cheque is by its very nature a solemn document  that  carries  with  it
not only  a  representation  to  the  holder  in  due  course  of  any  such
instrument but also a promise that the same shall be honoured  for  payment.
To that end Section 139 of the Act raises a statutory presumption  that  the
cheque is issued in discharge  of  a  lawfully  recoverable  debt  or  other
liability.  This presumption is no doubt rebuttable at trial  but  there  is
no gainsaying that the same favours the complainant and  shifts  the  burden
to the drawer of the instrument (in case the same is dishonoured)  to  prove
that the instrument was  without  any  lawful  consideration.   It  is  also
noteworthy that Section 138 while making dishonour of a  cheque  an  offence
punishable with imprisonment  and  fine  also  provides  for  safeguards  to
protect drawers of such instruments  where  dishonour  may  take  place  for
reasons other than those arising out of dishonest intentions.  It  envisages
service of a notice upon the drawer of the instrument calling  upon  him  to
make the payment covered by the cheque and permits  prosecution  only  after
the expiry of the statutory period and upon failure of the  drawer  to  make
the payment within the said period.
7.      The question that falls for our determination is  whether  dishonour
of  a  cheque  would  constitute  an  offence  only  in  one  of   the   two
contingencies envisaged under Section 138 of the Act, which  to  the  extent
the same is relevant for our purposes reads as under :
           “138. Dishonour of cheque for insufficiency, etc., of  funds  in
           the account.—Where any cheque drawn by a person  on  an  account
           maintained by him with a banker for payment  of  any  amount  of
           money to another  person  from  out  of  that  account  for  the
           discharge, in whole or in part, of any debt or other  liability,
           is returned by the bank unpaid, either because of the amount  of
           money standing to the credit of that account is insufficient  to
           honour the cheque or that it exceeds the amount arranged  to  be
           paid from that account by an agreement made with that bank, such
           person shall be deemed to have committed an offence  and  shall,
           without prejudice  to  any  other  provision  of  this  Act,  be
           punished with imprisonment of a term which  may  extend  to  one
           year, or with fine which may extend to twice the amount  of  the
           cheque, or with both.”


8.      From the above, it is manifest that a dishonour would constitute  an
offence only if the cheque is retuned by the bank  ‘unpaid’  either  because
the amount of money standing to  the  credit  of  the  drawer’s  account  is
insufficient to honour the cheque or that  the  amount  exceeds  the  amount
arranged to be paid from that account by an agreement with that  bank.   The
High Court was of the view and so was the submission made on behalf  of  the
respondent before us that the dishonour would constitute an offence only  in
the two contingencies referred  to  in  Section  138  and  none  else.   The
contention was that Section 138 being a penal provision has to be  construed
strictly.  When so construed, the dishonour must necessarily be for  one  of
the two reasons stipulated under Section 138 & none else.  The  argument  no
doubt sounds attractive on the first  blush  but  does  not  survive  closer
scrutiny. At  any  rate,  there  is  nothing  new  or  ingenious  about  the
submission, for the same has been noticed in several cases and  repelled  in
numerous decisions delivered by  this  Court  over  the  past  more  than  a
decade.  We need  not  burden  this  judgment  by  referring  to  all  those
pronouncements. Reference to only some of the said decisions should, in  our
opinion, suffice.

9.      In NEPC Micon Ltd. v. Magma Leasing  Ltd.  (1999)  4  SCC  253,  the
cheques issued by the appellant-company in discharge of its  liability  were
retuned by the company with the comments  ‘account  closed’.   The  question
was whether a dishonour on that ground for that reason  was  culpable  under
Section 138 of  the  Negotiable  Instruments  Act.  The  contention  of  the
company that issued the cheque was that Section 138 being a penal  provision
ought to be strictly construed and  when  so  interpreted,  dishonour  of  a
cheque on ground that the account was closed was not punishable as the  same
did not fall in any of the two contingencies referred  to  in  Section  138.
This  Court  noticed  the  prevalent  cleavage  in  the  judicial   opinion,
expressed  by  different  High  Courts  in  the  country  and  rejected  the
contention that Section 138 must be interpreted strictly or in disregard  of
the object sought to be achieved by the statute.  Relying upon the  decision
of this Court in Kanwar Singh v. Delhi Administration  (AIR  1965  SC  871),
and Swantraj v. State of Maharashtra (1975) 3 SCC 322 this Court  held  that
a narrow interpretation of Section 138 as suggested by  the  drawer  of  the
cheque  would  defeat  the  legislative  intent  underlying  the  provision.
Relying upon the decision in State of Tamil Nadu v. M.K.  Kandaswami  (1975)
4 SCC 745, this Court declared that while  interpreting  a  penal  provision
which is also remedial in  nature  a  construction  that  would  defeat  its
purpose or have the effect of obliterating it from the statute  book  should
be eschewed and that if more than one constructions are possible  the  Court
ought to choose a construction  that  would  preserve  the  workability  and
efficacy of the statute rather than an interpretation that would render  the
law otiose or sterile.  The Court relied upon the much quoted  passage  from
the Seaford Court Estates Ltd. v. Asher (1949 2 All E.R. 155)  wherein  Lord
Denning, L.J. observed:
           “The English language  is  not  an  instrument  of  mathematical
           precision. Our literature would be much poorer if it were.  This
           is where the draftsmen of Acts of  Parliament  have  often  been
           unfairly criticised. A judge, believing himself to  be  fettered
           by the supposed rule that he  must  look  to  the  language  and
           nothing else, laments that the draftsmen have not  provided  for
           this or that, or have been guilty of some or other ambiguity. It
           would certainly save the judges trouble if  Acts  of  Parliament
           were drafted with divine prescience and perfect clarity. In  the
           absence of it, when a defect appears a judge cannot simply  fold
           his hands and blame the draftsman. He must set to  work  on  the
           constructive task of finding the intention of Parliament, and he
           must do this not only from the language of the statute, but also
           from a consideration of the social conditions which gave rise to
           it and of the mischief which it was passed to remedy,  and  then
           he must supplement the written word so as  to  give  ‘force  and
           life’ to the intention of the legislature. ...  A  judge  should
           ask himself the question how, if  the  makers  of  the  Act  had
           themselves come across this ruck in  the  texture  of  it,  they
           would have straightened it out? He must then do so as they would
           have done. A judge must not alter the material of which the  Act
           is woven, but he can and should iron out the creases.”


10.     Relying upon a three-Judge Bench decision  of  this  Court  in  Modi
Cements Ltd. v. Kuchil Kumar Nandi (1998) 3 SCC 249, this  Court  held  that
the expression “the amount of money ………….  is  insufficient  to  honour  the
cheque” is a genus of which the  expression  ‘account  being  closed’  is  a
specie.
11.     In Modi Cements Ltd. (supra) a similar question had arisen  for  the
consideration of this Court.   The  question  was  whether  dishonour  of  a
cheque on the ground that the drawer had stopped  payment  was  a  dishonour
punishable  under  Section  138  of  the  Act.   Relying  upon  two  earlier
decisions of this  Court  in  Electronics  Trade  &  Technology  Development
Corporation Ltd. v. Indian Technologists  and  Engineers  (Electronics)  (P)
Ltd. (1996) 2 SCC 739 and K.K Sidharthan v. T.P. Praveena Chandran (1996)  6
SCC 369, it was contended by the drawer of the cheque that  if  the  payment
was stopped by the drawer, the dishonour of the cheque could not  constitute
an offence under Section 138 of the Act.  That contention  was  specifically
rejected by this Court. Not only that, the decision in Electronics  Trade  &
Technology Development Corporation Ltd. (supra) to the extent the same  held
that dishonour of the cheque by the bank  after  the  drawer  had  issued  a
notice to the holder not  to  present  the  same  would  not  constitute  an
offence, was overruled.  This Court observed:
           “18.  The  aforesaid  propositions  in   both   these   reported
           judgments, in  our  considered  view,  with  great  respect  are
           contrary to the spirit and object of Sections 138 and 139 of the
           Act. If we are to accept this proposition it will  make  Section
           138 a dead letter, for, by giving instructions to  the  bank  to
           stop payment immediately after issuing a cheque against  a  debt
           or liability  the  drawer  can  easily  get  rid  of  the  penal
           consequences notwithstanding the fact that a deemed offence  was
           committed. Further the  following  observations  in  para  6  in
           Electronics Trade & Technology Development Corpn. Ltd.  “Section
           138 intended to prevent dishonesty on the part of the drawer  of
           negotiable instrument to draw a cheque without sufficient  funds
           in his account maintained by him in a bank and induce the  payee
           or holder in due course  to  act  upon  it.  Section  138  draws
           presumption that one commits the offence if he issues the cheque
           dishonestly” (emphasis supplied) in our opinion, do not also lay
           down the law correctly.


           20. On a careful reading of Section  138  of  the  Act,  we  are
           unable to subscribe to the view that  Section  138  of  the  Act
           draws presumption of dishonesty against drawer of the cheque  if
           he without sufficient funds to his credit in his bank account to
           honour the cheque issues the same and, therefore,  this  amounts
           to an offence under Section 138 of  the  Act.  For  the  reasons
           stated hereinabove, we are unable to share the  views  expressed
           by this Court in the above two cases and we respectfully  differ
           with the same regarding interpretation of Section 138 of the Act
           to the limited extent as indicated above.”


12.     We may also at this stage refer to the decisions of  this  Court  in
M.M.T.C. Ltd. and Anr. v. Medchl Chemicals and  Pharma  (P)  Ltd.  and  Anr.
(2002) 1 SCC 234, where too this Court  considering  an  analogous  question
held that even in  cases  where  the  dishonour  was  on  account  of  “stop
payment” instructions of the drawer,  a  presumption  regarding  the  cheque
being for consideration would arise under  Section  139  of  the  Act.   The
Court observed:
           “19. Just such a contention has been negatived by this Court  in
           the case of Modi Cements Ltd. v. Kuchil Kumar Nandi. It has been
           held that even though the cheque is  dishonoured  by  reason  of
           “stop-payment” instruction an offence under  Section  138  could
           still be made out. It is held that the presumption under Section
           139 is attracted in such a case also. The authority  shows  that
           even when the cheque is dishonoured by  reason  of  stop-payment
           instructions by virtue of Section 139 the court has  to  presume
           that the cheque was received by the holder for the discharge, in
           whole or in part, of any debt or liability. Of course this is  a
           rebuttable presumption. The accused can thus show that the “stop-
           payment” instructions were not issued because  of  insufficiency
           or paucity of funds. If the accused shows that  in  his  account
           there were sufficient funds to clear the amount of the cheque at
           the time of presentation of the cheque  for  encashment  at  the
           drawer bank and that the stop-payment  notice  had  been  issued
           because of other  valid  causes  including  that  there  was  no
           existing debt or liability at the time of presentation of cheque
           for encashment, then offence under Section 138 would not be made
           out. The important thing is that the burden of so proving  would
           be on the accused. Thus a court cannot quash a complaint on this
           ground.”


13.     To the same effect is the decision of this  Court  in  Goaplast  (P)
Ltd. v. Chico Ursula D’souza and Anr. (2003) 3 SCC  232,  where  this  Court
held that ‘stop  payment  instructions’  and  consequent  dishonour  of  the
cheque of a post-dated cheque  attracts  provision  of  Section  138.   This
Court observed :
            “Chapter XVII containing Sections 138 to 142 was introduced  in
           the Act by Act 66 of 1988 with the object of  inculcating  faith
           in the efficacy of banking operations and giving credibility  to
           negotiable  instruments  in  business  transactions.  The   said
           provisions were intended to discourage people from not honouring
           their commitments by way of payment through cheques.  The  court
           should lean in favour of  an  interpretation  which  serves  the
           object of  the  statute.  A  post-dated  cheque  will  lose  its
           credibility and acceptability if  its  payment  can  be  stopped
           routinely. The purpose of a post-dated cheque is to provide some
           accommodation to the drawer of the cheque. Therefore, it is  all
           the more necessary that the drawer of the cheque should  not  be
           allowed to abuse the accommodation given to him by a creditor by
           way of acceptance of a post-dated cheque.


           In view of Section 139, it has to be presumed that a  cheque  is
           issued  in  discharge  of  any  debt  or  other  liability.  The
           presumption can be rebutted by adducing evidence and the  burden
           of proof is on the person who wants to  rebut  the  presumption.
           This presumption coupled with the object of Chapter XVII of  the
           Act leads to the conclusion that by  countermanding  payment  of
           post-dated cheque, a party should not be  allowed  to  get  away
           from the penal provision of Section 138 of the Act.  A  contrary
           view would render Section 138 a dead letter and will  provide  a
           handle  to  persons  trying  to  avoid   payment   under   legal
           obligations undertaken by them through their own acts  which  in
           other words can be said to be  taking  advantage  of  one's  own
           wrong.”
                                           (emphasis supplied)




14.     A three-Judge Bench of this Court in Rangappa v.  Sri  Mohan  (2010)
11 SCC 441 has approved the above decision and  held  that  failure  of  the
drawer of the cheque  to  put  up  a  probable  defence  for  rebutting  the
presumption that arises under Section  139  would  justify  conviction  even
when the appellant drawer may have alleged that the cheque in  question  had
been lost and was being misused by the complainant.
15.     The above line of decisions leaves no room for holding that the  two
contingencies envisaged under Section 138 of the  Act  must  be  interpreted
strictly or literally.  We find ourselves in respectful agreement  with  the
decision in NEPC Micon Ltd. (supra) that the  expression  “amount  of  money
…………. is insufficient” appearing in Section 138 of the Act is  a  genus  and
dishonour  for  reasons  such  “as  account  closed”,   “payment   stopped”,
“referred to the drawer” are only species of that genus.  Just as  dishonour
of a cheque on the ground that the account has been closed  is  a  dishonour
falling in the first  contingency  referred  to  in  Section  138,  so  also
dishonour on the ground that the “signatures  do  not  match”  or  that  the
“image is not found”, which too implies that the specimen signatures do  not
match the signatures on the cheque would constitute a dishonour  within  the
meaning of Section 138  of  the  Act.   This  Court  has  in  the  decisions
referred to above taken note of situations and contingencies arising out  of
deliberate acts of omission or commission on the part of the drawers of  the
cheques which would inevitably result in the dishonour of the cheque  issued
by them. For instance this Court has held that if after issue of the  cheque
the drawer closes the account it must be presumed that  the  amount  in  the
account was nil hence insufficient to meet the  demand  of  the  cheque.   A
similar result can be brought about by  the  drawer  changing  his  specimen
signature given to the bank or in the case  of  a  company  by  the  company
changing the mandate of those authorised to sign the cheques on its  behalf.
 Such changes or alteration in the mandate may be  dishonest  or  fraudulent
and that would inevitably result in dishonour of all cheques signed  by  the
previously authorised signatories. There  is  in  our  view  no  qualitative
difference between a situation where the dishonour takes  place  on  account
of the substitution by a new set of authorised signatories resulting in  the
dishonour of the cheques already issued and another situation in  which  the
drawer of the cheque changes his own signatures or  closes  the  account  or
issues instructions to the bank not to make the payment.   So  long  as  the
change is brought about with a view to preventing the cheque being  honoured
the dishonour would become an offence under Section  138  subject  to  other
conditions prescribed being satisfied. There may indeed be situations  where
a mismatch between the signatories on the cheque drawn  by  the  drawer  and
the specimen available with the bank may result in dishonour of  the  cheque
even when the drawer never intended to invite  such  a  dishonour.   We  are
also conscious of the fact that an authorised signatory may in the  ordinary
course of business be  replaced  by  a  new  signatory  ending  the  earlier
mandate to the bank.  Dishonour on account of such changes  that  may  occur
in the  course  of  ordinary  business  of  a  company,  partnership  or  an
individual may not constitute an offence by itself because such a  dishonour
in order to qualify for prosecution under  Section  138  shall  have  to  be
preceded by a statutory notice where the drawer is called upon and  has  the
opportunity to arrange the payment of the amount covered by the cheque.   It
is only when the drawer despite receipt of such a  notice  and  despite  the
opportunity to make  the  payment  within  the  time  stipulated  under  the
statute does not pay the amount that the dishonour  would  be  considered  a
dishonour constituting an offence, hence punishable.  Even  in  such  cases,
the question whether or  not  there  was  a  lawfully  recoverable  debt  or
liability for discharge whereof the cheque was  issued  would  be  a  matter
that the trial Court will examine having  regard  to  the  evidence  adduced
before it  and  keeping  in  view  the  statutory  presumption  that  unless
rebutted  the  cheque  is  presumed  to  have  been  issued  for   a   valid
consideration.
16.     In the case at hand, the High Court relied upon a decision  of  this
Court in Vinod Tanna’s case  (supra)  in  support  of  its  view.   We  have
carefully gone through the said decision which relies upon the  decision  of
this Court in Electronics Trade & Technology  Development  Corporation  Ltd.
(supra). The view expressed by this Court in Electronics Trade &  Technology
Development Corporation Ltd. (supra) that a dishonour of the cheque  by  the
drawer after issue of a notice to the holder asking him  not  to  present  a
cheque would not attract Section 138  has  been  specifically  overruled  in
Modi Cements Ltd.  case (supra).  The net effect is that  dishonour  on  the
ground that the payment has been stopped, regardless whether  such  stoppage
is with or  without  notice  to  the  drawer,  and  regardless  whether  the
stoppage of payment is on the ground that the amount lying  in  the  account
was not sufficient to meet the requirement of the cheque, would attract  the
provisions of Section 138.
17.     It was contended by learned counsel  for  the  respondent  that  the
respondent-company had offered to issue new cheques to  the  appellant  upon
settlement of the accounts and that a  substantial  payment  has  been  made
towards the outstanding amount.  We do not think that such  an  offer  would
render illegal a prosecution that is otherwise lawful.  The  offer  made  by
the respondent-company was in  any  case  conditional  and  subject  to  the
settlement  of  accounts.  So  also  whether   the   cheques   were   issued
fraudulently by the authorised signatory for amounts in excess of  what  was
actually payable to the appellant is a matter for examination at the  trial.
 That the cheques were issued under the signature of the  persons  who  were
authorised to do so on  behalf  of  the  respondent-company  being  admitted
would give rise to a presumption that they were meant to discharge a  lawful
debt or liability.  Allegations of fraud  and  the  like  are  matters  that
cannot be investigated by a Court under Section 482 Cr.P.C. and  shall  have
to be left to be determined at the trial after the evidence  is  adduced  by
the parties.
18.     On behalf of the signatories  of  the  cheques  dishonoured  it  was
argued that the dishonour had taken  place  after  they  had  resigned  from
their  positions  and  that  the  failure  of  the  company  to  honour  the
commitment implicit in the cheques cannot be construed an act of  dishonesty
on the part of the signatories of the cheques. We  do  not  think  so.  Just
because the authorised signatories of the cheques  have  taken  a  different
line of defence than the one taken by by the company does not  in  our  view
justify quashing of the proceedings against them.   The  decisions  of  this
Court in National Small Industries  Corporation  Limited  v.  Harmeet  Singh
Paintal and Anr. (2010) 3 SCC 330 and S.M.S. Pharmaceuticals Ltd.  v.  Neeta
Bhalla & Anr. (2005) 8 SCC 89 render the authorised signatory liable  to  be
prosecuted along  with  the  company.   In  the  National  Small  Industries
Corporation Limited’s case (supra) this Court observed:
           “19. xxxx
           (c) The answer to Question (c) has to be in the affirmative. The
           question notes that the  managing  director  or  joint  managing
           director would be  admittedly  in  charge  of  the  company  and
           responsible to the company for the conduct of its business. When
           that is so, holders of such positions in a company become liable
           under Section 141 of the Act. By virtue of the office they  hold
           as managing director or joint managing director,  these  persons
           are in charge of and responsible for the conduct of business  of
           the company. Therefore, they get covered under Section  141.  So
           far as the  signatory  of  a  cheque  which  is  dishonoured  is
           concerned, he is clearly responsible for the  incriminating  act
           and will be covered under sub-section (2) of Section 141.”




19.     In the result, we allow these appeals, set aside  the  judgment  and
orders  passed  by  the  High  Court  and  dismiss  the   special   criminal
applications filed by the respondents. The trial  Court  shall  now  proceed
with the trial of the complaints filed by the appellants  expeditiously.  We
make it clear that nothing said in  this  judgment  shall  be  taken  as  an
expression of any final opinion on the merits of the case  which  the  trial
Court shall be free to examine on its own.  No costs.

                                        ……………………….……..……J.
                                                (T.S. THAKUR)




                                        ………………………….…..……J.
                                              (GYAN SUDHA MISRA)
New Delhi
November 27, 2012

                                                                  Reportable


                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION


                   CRIMINAL APPEAL NOS. 1870-1909 OF 2012
              (Arising out of S.L.P. (Crl.) No.1740-1779/2001)




  M/S. LAXMI DYECHEM                                      .. Appellant
                                   Versus
  STATE OF GUJARAT & ORS.                               .. Respondents
                                    WITH
                      CRL.APPEAL NOS. 1910-1949 of 2012
                 (Arising out of SLP (Crl.) Nos.1780-1819/11




                                J U D G E M E N T


  GYAN SUDHA MISRA, J.


  1.             I  endorse   and  substantially   agree  with   the   views
  expressed in the judgment  and order of  learned  Brother Justice  Thakur.
  However,  I propose to highlight a specific aspect relating  to  dishonour
  of cheques which constitute an offence under Section 138 as introduced  by
  the Banking, Public Financial Institutions and Negotiable Instruments Laws
  (Amendment) Act, 1988 by adding that in so far as the category  of   ‘stop
  payment of cheques’ is concerned as to whether they  constitute an offence
  within the meaning  of Section 138 of the ‘NI Act’,  due to the return  of
  a cheque by the bank to the  drawee/holder of the cheque  on the ground of
  ‘stop payment’ although has been held  to constitute  an  offence   within
  the meaning  of Sections 118 and 138 of the NI Act,  and the same  is  now
  no longer  res integra, the said presumption is a ‘rebuttable presumption’
  under Section 139 of the NI Act itself since  the   accused  issuing   the
  cheque is at  liberty   to  prove  to  the  contrary.    This  is  already
  reflected  under Section 139 of the NI Act when  it lays down  as follows:-




  “139. Presumption in favour of holder.--  It shall be presumed, unless the
  contrary is proved, that the holder of a cheque  received  the cheque,  of
  the  nature referred to in Section 138 for the discharge, in whole  or  in
  part, of any debt or other liability.”




  2.             We  have  to  bear  in  mind  that  the  Legislature  while
  incorporating  the provisions of Chapter XVII, Sections 138 to


  142 inserted in the  NI Act (Amendment Act 1988) intends  to  punish  only
  those who  know fully well that they have no amount  in the bank  and  yet
  issue  a  cheque   in   discharge    of   debt   or   liability    already
  borrowed/incurred -which amounts to cheating, and  not  to   punish  those
  who refused to discharge the debt for  bona fide and  sustainable  reason.
  It is in this context that this  Hon’ble Court in the matter of   M.M.T.C.
  Ltd. And  Anr  vs. Medchl Chemical and Pharma (P) Ltd. And  Anr.[1]    was
  pleased to hold that  cheque   dishonour  on  account   of  drawer’s  stop
  payment instruction  constitutes an offence under Section 138  of  the  NI
  Act but it is subject to the  rebuttable presumption under Section 139  of
  the NI Act as the same can be  rebutted  by the drawer even at the   first
  instance.  It was held  therein  that  in order to escape liability  under
  Section  139, the accused has to show    that  dishonour was    not    due
  to   insufficiency of  funds   but   there   was valid cause,    including
  absence   of   any debt  or liability for the stop payment instruction  to
  the   bank.    The  specific   observations   of  the    Court    in  this
  regard may be quoted for ready reference which are as follows:


  “The authority shows that even when the cheque is dishonoured by reason of
  stop-payment instructions by virtue  of  Section  139  the  court  has  to
  presume that the cheque was received by the holder for the  discharge,  in
  whole or in part,  of  any  debt  or  liability.   Of  course  this  is  a
  rebuttable presumption.  The accused can thus show that the “stop-payment”
  instructions were not issued because of insufficiency or paucity of funds.
   If the accused shows that in his account there were sufficient  funds  to
  clear the amount of the cheque at the time of presentation of  the  cheque
  for encashment at the drawer bank and that  the  stop-payment  notice  had
  been issued because of other valid causes  including  that  there  was  no
  existing debt or liability at the  time  of  presentation  of  cheque  for
  encashment, then offence under Section 138 would not  be  made  out.   The
  important thing is that the burden of so proving would be on the  accused.
  Thus a court cannot quash a complaint on this ground.”




   Therefore, complaint filed in such a case although might not  be  quashed
  at the threshold before trial, heavy   onus  lies  on  the  court  issuing
  summons in such cases as the trial is summary in nature.
  3.            In the matter  of  Goaplast  (P)   Ltd.  vs.   Chico  Ursula
  D’Souza And Anr.[2] also this Court had held  that   ordinarily  the  stop
  payment instruction is issued to the bank by the account holder when there
  is no sufficient amount in  the  account.   But,  it   was  also  observed
  therein that the reasons for stopping the payment  can be  manifold  which
  cannot be overlooked.  Hence, in  view  of  Section  139,  it  has  to  be
  presumed that a cheque is  issued  in  discharge  of  any  debt  or  other
  liability.  But the presumption can be rebutted by adducing  evidence  and
  the burden of proof is on the person who wants to rebut  the  presumption.
  However, this presumption coupled with the object of Chapter XVII  of  the
  Act leads to the conclusion that by countermanding payment  of  post-dated
  cheque, a party should not be allowed to get away from the penal provision
  of Section 138 of the Act.   Therefore, in order to  hold  that  the  stop
  payment instruction to the bank would not constitute  an  offence,  it  is
  essential that there must have been sufficient funds in  the  accounts  in
  the first place on the  date  of  signing  of  the  cheque,  the  date  of
  presentation  of  the cheque, the date on which  stop payment instructions
  were issued to the bank.  Hence, in Goaplast   matter  (supra),  when  the
  magistrate had disallowed  the application in a case of ‘stop payment’  to
  the bank without hearing the  matter  merely on the ground that there  was
  no dispute about the  dishonour of  the  cheque  issued  by  the  accused,
  since the signature was admitted and therefore held that no purpose  would
  be served  in examining the bank manager  since the dishonour was not   in
  issue, this Court held that  examination of the bank  manager  would  have
  enabled the Court to know on what date  stop payment  order  was  sent  by
  the drawer to the bank clearly leading to the obvious inference that  stop
  payment although by itself would be an offence, the same  is  subject   to
  rebuttal provided there was sufficient funds in the account of the  drawer
  of the cheque.


  4.            Further, a three judge Bench of this Court  in the matter of
    Rangappa vs. Sri Mohan [3] held that Section 139  is  an  example  of  a
  reverse onus clause   that  has  been  included  in  furtherance   of  the
  legislative  objective   of  improving  the  credibility   of   negotiable
  instruments.  While  Section 138 of the Act specifies the  strong criminal
  remedy  in relation  to the  dishonour  of  the  cheques,  the  rebuttable
  presumption  under Section 139        is a device to prevent  undue  delay
  in the course of  litigation.  The Court  however, further  observed  that
  it must be remembered  that the offence made punishable  by   Section  138
  can be better described  as a regulatory  offence since the  bouncing   of
  a  cheque  is  largely in the nature of  a civil wrong   whose   money  is
  usually  confined  to  the  private  parties   involved   in    commercial
  transactions.  In such a scenario, the test  of   proportionality   should
  guide the construction and interpretation of reverse onus clauses and  the
  defendant accused   cannot  be  expected  to  discharge  an   unduly  high
  standard  of proof”.  The Court further observed  that  it  is  a  settled
  position that when  an accused  has to rebut the presumption under Section
  139, the standard  of  proof   for  doing  so  is  all  preponderance   of
  probabilities.


  5.            Therefore, if the accused is able to  establish  a  probable
  defence which creates doubt about the existence of a  legally  enforceable
  debt or liability, the prosecution can fail.  The accused can rely on  the
  materials submitted by the complainant in order to raise  such  a  defence
  and it  is  inconceivable  that in some cases the accused  may not need to
  adduce the evidence of his/her  own.  If however, the accused/drawer of  a
  cheque  in question   neither raises  a probable defence     nor  able  to
  contest existence of  a legally  enforceable debt or liability,  obviously
  statutory  presumption  under  Section  139  of  the  NI   Act   regarding
  commission of the offence comes into play if the same is not rebutted with
  regard to  the materials submitted by the complainant.


  6.            It is no doubt true that the dishonour of cheques  in  order
  to qualify for prosecution under Section 138 of  the  NI  Act  precedes  a
  statutory  notice where the drawer is called upon by allowing him to avail
  the opportunity to   arrange  the payment  of the amount  covered  by  the
  cheque and it is only when the  drawer   despite the receipt  of   such  a
  notice  and despite  the opportunity to make the payment  within the  time
  stipulated under the statute does not  pay  the  amount,   that  the  said
  default would be considered a dishonour constituting   an  offence,  hence
  punishable.   But even in such cases, the question whether or  not   there
  was  lawfully  recoverable  debt or liability  for discharge  whereof  the
  cheque was issued, would be a matter that the trial  court  will  have  to
  examine  having regard to the  evidence  adduced before it keeping in view
  the statutory presumption that unless rebutted, the cheque is presumed  to
  have been issued for a  valid consideration.    In  view    of  this   the
  responsibility of the trial judge while issuing summons  to   conduct  the
  trial in matters where there has been instruction to stop payment  despite
  sufficiency of funds  and whether the same would be  a  sufficient  ground
  to proceed in the matter,  would be  extremely heavy.


  7.            As  already noted, the Legislature intends  to  punish  only
  those  who are  well aware that they have no amount  in the bank  and  yet
  issue  a cheque  in discharge of  debt  or  liability   which  amounts  to
  cheating and not to punish those who  bona fide issues the cheque  and  in
  return  gets cheated giving rise  to  disputes  emerging  from  breach  of
  agreement and hence contractual violation.  To illustrate this, there  may
  be a situation where the cheque  is issued in favour  of  a  supplier  who
  delivers  the goods which is found  defective by the consignee before  the
  cheque is encashed or a post-dated cheque towards full and  final  payment
  to a  builder after which the  apartment  owner  might  notice  breach  of
  agreement for several reasons.  It is not uncommon that  in that event the
   payment  might be stopped bona fide by the drawer of   the  cheque  which
  becomes the contentious issue relating to breach of contract and hence the
  question whether that would  constitute  an  offence  under  the  NI  Act.
  There may be  yet another example where  a cheque is issued  in favour  of
  a hospital which  undertakes to treat the patient by operating the patient
  or any other method of treatment  and the doctor  fails  to  turn  up  and
  operate and in the process  the patient  expires even before the treatment
  is administered.   Thereafter, if the  payment is  stopped  by the  drawer
  of the cheque,  the obvious question would arise as to whether that  would
  amount to an  offence under Section 138 of the  NI  Act  by  stopping  the
  payment ignoring Section 139 which makes  it  mandatory  by  incorporating
  that the  offence   under  Section  138  of  the  NI  Act  is  rebuttable.
  Similarly, there may be innumerable situations where  the  drawer  of  the
  cheque for bonafide reasons might issue instruction of ‘stop  payment’  to
  the bank in spite of sufficiency of funds in his account.


  8.        What is wished to be emphasized is that matters arising  out  of
  ‘stop payment’ instruction to  the  bank  although  would  constitute   an
  offence under Section 138 of the NI Act since  this  is  no   longer  res-
  integra, the same is an offence subject to the provision of Section 139 of
  the Act and hence, where the accused fails to discharge   his  burden   of
  rebuttal by proving that the cheque could  be held  to be  a  cheque  only
  for discharge of a lawful debt, the offence would be made out.  Therefore,
   the cases arising out of  stop payment  situation  where  the  drawer  of
  cheques  has sufficient funds in his account and  yet  stops  payment  for
  bona fide reasons, the same cannot be put on par with  other   variety  of
  cases where the cheque  has  bounced  on  account  of   insufficiency   of
  funds or where it exceeds the  amount  arranged  to  be  paid  from   that
  account, since Section  138  cannot  be  applied  in  isolation   ignoring
  Section 139 which envisages a right of rebuttal before an offence could be
  made out  under  Section  138  of  the  Act  as  the  Legislature  already
  incorporates the expression “unless the contrary  is proved”  which  means
  that the presumption of law shall stand  and  unless  it  is  rebutted  or
  disproved, the holder of a cheque shall be presumed to have  received  the
  cheque  of the nature referred to in  Section 138 of the NI Act,  for  the
  discharge of a debt  or other liability.  Hence, unless  the  contrary  is
  proved,  the presumption shall be made that the holder  of   a  negotiable
  instrument is holder in due  course.


  9.            Thus although a petition under Section 482  of  the  Cr.P.C.
  may not be entertained by the High Court for quashing   such  proceedings,
  yet the judicious use of discretion by the trial judge whether to  proceed
  in the matter or  not would be enormous in view of Section 139 of  the  NI
  Act and if the  drawer of  the cheque  discharges the burden  even at  the
  stage of enquiry that he had  bona fide reasons to stop  the  payment  and
  not make the said payment even  within  the  statutory  time  of  15  days
  provided under  the NI Act,  the  trial  court   might   be  justified  in
  refusing  to issue  summons to the drawer of  the cheque by  holding  that
  ingredients  to constitute offence  under Section 138 of the  NI  Act   is
  missing  where the account holder has sufficient funds  to  discharge  the
  debt.  Thus the category  of ‘stop payment cheques’ would be  a   category
  which is  subject  to rebuttal and hence  would be  an  offence   only  if
  the drawer of the cheque  fails to discharge the burden of rebuttal.


  10.           Thus, dishonour of  cheques   simpliciter  for  the  reasons
  stated in Section 138 of the NI Act although is sufficient  for commission
  of offence since  the presumption  of  law on this point is no longer  res
  integra,   the category of ‘stop payment’ instruction  to the bank   where
  the  account holder   has sufficient funds  in his account   to  discharge
  the debt for which  the cheque  was issued, the  said  category  of  cases
  would be subject  to rebuttal as  this  question   being  rebuttable,  the
  accused can show  that the  stop  payment  instructions  were  not  issued
  because  of  insufficiency  or  paucity   of  funds,  but   stop   payment
  instruction had been issued  to the bank for other valid causes  including
  the reason that there  was no  existing debt  or liability   in  view   of
  bonafide dispute  between the drawer and drawee of the cheque.    If  that
  be so, then offence under Section 138 although would be made out, the same
  will attract Section 139 leaving the burden  of proof  of rebuttal  by the
  drawer  of the cheque.  Thus, in  cases  arising  out  of  ‘stop  payment’
  situation, Sections 138 and 139  will  have  to  be   given  a  harmonious
  construction as in that event  Section 139 would be rendered nugatory.


  11.           The instant matter however do not relate to a case of  ‘stop
  payment’ instruction to the bank  as  the  cheque  in  question  had  been
  returned due to mismatching of  the signatures  but  more  than  that  the
  petitioner having neither raised nor proved to the contrary  as  envisaged
  under Section 139 of the NI  Act  that  the   cheques  were  not  for  the
  discharge of  a lawful debt nor making the payment within fifteen days  of
  the notice assigning any reason as to why the  cheques  had  at  all  been
  issued if the amount had not been settled, obviously the  plea of rebuttal
   envisaged under Section 139 does not come to his rescue  so  as  to  hold
  that the  same would  fall within  the  realm  of  rebuttable  presumption
  envisaged  under Section 139 of the Act.   I, therefore, concur  with  the
  judgment and order  of  learned Brother Justice Thakur subject to my views
  on the dishonour of cheques arising  out of  cases    of   ‘stop  payment’
  instruction to the bank in spite of sufficiency of funds  on   account  of
  bonafide  dispute  between the drawer and drawee of the cheque.   This  is
  in view  of the  legal position  that   presumption  in  favour  of    the
  holder  of a cheque  under Section 139 of the NI Act has been held  by the
  NI Act as also by  this  Court  to  be  a  rebuttable  presumption  to  be
  discharged by the accused/drawee of the cheque  which  may  be  discharged
  even at the threshold   where the magistrate examines a case at the  stage
  of taking cognizance as to  whether a prima facie  case  has been made out
  or not  against the drawer of the cheque.


                                                               ………..……………..J
                                                          (Gyan Sudha Misra)




  New Delhi;
  November  27, 2012


-----------------------
[1]      (2002) 1 SCC 234
[2]      (2003) 3 SCC 232 = (2004) Crl.L.J. 664
[3]      (2010) 11 SCC 441