JUGESH SEHGALversusSHAMSHER SINGH GOGI

                 (2009] 10 S.C.R. 857


                   JUGESH SEHGAL                            A
                         v.
                SHAMSHER SINGH GOGI
           (Criminal Appeal No. 1180 of 2009)

                      JULY 10, 2009
                                                            B
           [D.K. JAIN AND R.M. LODHA, JJ.]

    Negotiable Instruments Act, 1881:

     s. 138 - Ingredients of - Explained - HELD : In the    c
instant case, the cheque in question was not drawn by
accused on an account maintained by him - The very first
ingredient of s. 138 having not been satisfied, case u/s 138
not made out against the accused - It was a fit case for
exercise of jurisdiction u/s 482 CrPC by High Court to quash 0
the criminal compliant - In the circumstances, continuance
of proceedings in complaint uls 138 of the Act against the
accused would be an abuse of process of court - Criminal
complaint against accused quashed - Code of Criminal
Procedure, 1973 - s.482.
                                                            E
     The complainant filed a complaint uls 138 of the
Negotiable Instruments Act, 1881 against the appellant,
his father, brother and mother. The Chief Judicial
Magistrate took cognizance of the complaint and issued
notice to all the accused, who filed petition uls.482 of the F
Code of Criminal Procedure, 1973 seeking to quash the
complaint. The High Court dismissed the petition qua the
appellant-accused no.1 on the ground that plea of the
appellant that the cheque was not issued by him involved
a disputed question of fact which could not be gone into G
by the High Court in the proceedings uls.482 of the Code.
As regards the remaining three accused, the High Court
allowed the petition holding that neither the cheque was
issued by them nor were they shown to be vicariously
                           857                              H
    858      SUPREME COURT REPORTS             [2009] 10 S.C.R.

A   liable u/s.141 of the Act.

       In the appeal field by accused no.1, it was contended
  for the appellant that the cheque in question purportedly
  issued by him was from an account not maintained by
  him but by one 'S' and, therefore, the basic ingredients
8
  of s.138 of the Act were not fulfilled. It was submitted that
  the said bank account had already been closed and there
  was no question of the cheque in question being issued
  in favour of the complainant by the appellant; and that
  the complaint was an abuse of the process of court and
C as such liable to be quashed.

          Allowing the appeal, the Court

       HELD : 1.1. It is manifest that to constitute an offence
D u/s 138 of the Negotiable Instruments Act, 1881 the
  ingredients required to be fulfilled are: (i) a person must
  have drawn a cheque on an account maintained by him
  in a bank for payment of a certain amount of money to
  another person from out of that account; (ii) The cheque
E should have been issued for the discharge, in whole or
  in part, of any debt or other liability; (iii) that cheque has
  been presented to the bank within a period of six months
  from the date on which it is drawn or within the period of
  its validity whichever is earlier; (iv) that cheque is
  returned by the bank unpaid, either because of the
F amount of money standing to the credit of the 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 the bank; (v) the payee or the
  holder in due course of the cheque makes a demand for
G the payment of the said amount of money by giving a
  notice in writing, to the drawer of the cheque, within 15
  days of the receipt of information by him from the bank
  regarding the return of the cheque as unpaid; and (vi) the
  drawer of such cheque fails to make payment of the said
H
    JUGESH SEHGAL v. SHAMSHER SINGH GOG!                 859


amount of money to the payee or the holder in due A
course of the cheque within 15 days of the receipt of the
said notice. [Para 9] [865-C-H; 866-A]

     1.2. In the instant case, it is clear from the facts that
on receipt of the return memo from the bank, the
                                                                8
complainant is stated to have realized that the
dishonoured cheque was issued from an account which
was not maintained by the appellant-accused No.1 but by
one 'S'. Thereafter, he filed an FIR against all the accused
for offences u/ss 420, 467, 468, 471, IPC. Thus, there is
hardly any dispute that the cheque, subject matter of the C
complaint u/s 138 of the Act, was not drawn by the
appellant on an account maintained by him. Thus, the
very first ingredient of s.138 of the Act is not satisfied and,
consequently, the case against the appellant for having
committed an offence u/s 138 of the Act cannot be D
proved. [Para 11] [866-D-G]

      2.1. Though the powers possessed by the High
 Courts under the provision of s.482 CrPC are very wide
 but the same should be exercised in appropriate cases, E
 ex debito justitiae to do real and substantial justice for the
 administration of which alone the courts exist. The
 powers have to be exercised sparingly, with
 circumspection and in the rarest of rare cases, where the
court is convinced, on the basis of material on record, F
that allowing the proceedings to continue would be an
abuse of the process of court or that the ends of justice
require that the proceedings ought to be quashed. It was
a fit case where the High Court, in exercise of its
jurisdiction u/s. 482 of the Code, should have quashed G
the complaint u/s 138 of the Act. [Para 13 and 16] [867-C-
E; 868-F]

     Janata Dal Vs. H.S. Chowdhary & Ors. (1992) 4 SCC
305; Kurukshetra University & Anr. Vs. State of Haryana &
Anr. (1977) 4 SCC 451; State of Haryana & Ors. Vs. Bhajan H
    860       SUPREME COURT• REPORTS               [2009] 10 S.C.R.


A   Lal & Ors. 1992 Supp (1) SCC 335 and Som Mittal Vs.
    Government of Kamataka (2008) 3 SCC 574, referred to.

         2.2. Under the circumstances, continuance of further
    proceedings in the complaint u/s 138 of the Act against
    the appellant would be an abuse of the process of the
8
    court. Therefore, the decision of the High Court cannot
    be sustained and is set aside, and the criminal complaint
    pending against the appellant is quashed. [Paras 17 and
    18) [869-A-B; 869-C]

c                         Case Law Reference:

          (1992) 4 sec 305           referred to          Para 13
          (1977) 4 sec 451           referred to          Para 13

          1992 Supp (1) SCC 335 referred to               Para 13
D
          (2008) 3 sec 574           referred to          Para 15

        CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
    No. 1180 of 2009.
E
        From the Judgment & Order dated 13.12.2005 of the High
    Court of Punjab & Haryana at Chandigarh in Crl. Misc. No.
    47932-M of 2004.

          Badri Prasad Singh and Anil Gaur for the Appellants.
F
          Reepak Kansai and (for G.K. Bansal) for the Respondents.

          The Judgment of the Court was delivered by

          D.K. JAIN, J. 1. Leave granted.
G
         2. This appeal arises from the judgment and order dated
    13th December, 2005 rendered by a learned Single Judge of
    the High Court of Punjab & Haryana at Chandigarh in Criminal
    Miscellaneous No. 47932-M of 2004. By the impugned
H
                 JUGESH SEHGAL v. SHAMSHER SINGH GOGI                   861
                             [D.K. JAIN, J.]
         ~
               judgment, the learned Judge, while partly allowing the petition 'A
......         preferred under Section 482 of the Code of Criminal
               Procedure, 1973 (for short "the Code") seeking quashing of a
               private complaint filed by the respondent (hereinafter referred
             · to as "the complainant") under Section 138 of the Negotiable
               Instruments Act, 1881 (for short "the Act") has dismissed the B
               petition qua the appellant.

                   3. In order to appreciate the controversy, a few material
              facts may be stated thus:

                     The complainant is engaged in the trading of petroleum    c
               products. According to him, the appellant, his father, brother
               and mother used to purchase mobile oil from him from time to
               time. According to the complainant, on 20th November, 2000,
         l     all four of them got issued a cheque bearing No. 227739 drawn
               on Indian Bank, Sonepat in the sum of Rs. 24, 92, 115/- in D
               discharge of their liability towards him. The complainant
               presented the cheque for payment to his bankers, which was
               returned unpaid on 29th December, 2000 with the remarks
              "Account closed". Thereafter, on 17th January, 2001, the
              complainant got a legal notice issued to all the four accused E
              asking them to pay the cheque amount. In their reply to the legal
              notice, the accused denied having any business dealings with
              the complainant as also the issue of cheque in question by any
              one of them. Their stand was that no such cheque was ever
              signed, issued or got issued by them at any point of time in F
              favour of the complainant.

                   4. Dissatisfied with the response to the legal notice, the
             complainant filed a complaint under Section 138 of the Act
             against the afore-noted four persons. Paragraph 3 of the
             complaint, which contains the gist of complainant's case and G
             has a bearing on the issue involved in this appeal, reads as
             follows:

                  "That the complainant handed over the cheque No.
                                                                               H
    862       SUPREME COURT REPORTS                [2009] 10 S.C.R.


A         227739, dt. 20.11.2000 of Indian Bank, Sonepat to its
          banker Oriental Bank of Commerce, Samalkha for the
          collection of the amount of aforesaid cheque after about
          one month as requested by the complainants. But the
                                                                         -
          lndiRn Bank, Sonepat returned the said cheque with the
B         remarks "Account closed" vide return memo dated
          29.12.2000. The return memo dated 29.12.2000 alongwith
          original cheque was returned by the O.B.C., Samalkha
          alongwith its forwarding letter dt. 03.01.2001 to the
          complainant vide which the O.B.C .. Samalkha also
c         informed that a sum of Rs.3136/- has been debited in the
          complainant's account as collection charges. After
          receiving the return memo alongwith forwarding
          03.01.2001, the complainant came to know for the first
          time that the accused have issued the aforesaid cheque
          dt. 20.11.2000 with a fraudulent intention knowing fully
D
          well that the accused have no sufficient amount for the
          encashment of the aforesaid cheque or the said account
          was not in existence on that date or the said account
          pertained to someone else. The complainant has also
          came to know that all the above named accused being a
E         family members, formed an unlawful group to play fraud
          with the public and there was several other instances."

                                                (emphasis supplied)

F       5. The Chief Judicial Magistrate, Panipat took cognizance
  of the complaint and vide order dated 20th September. 2003,
  directed issue of notice to all the accused. All the accused put
  in appearance; notice of accusation was given; they pleaded
  not guilty and claimed trial. Thereafter, all the four accused filed
G petition under Section 482 of the Code praying for quashing
  of the complaint. As noted earlier, by a short order, the High
  Court has dismissed the petition qua accused No.1, the
  appellant herein, on the ground that the plea of the appellant
  that the cheque was not issued by him involved a disputed
H question of fact which could not be gone into by the Court in
                 JUGESH SEHGAL v. SHAMSHER SINGH GOGI                 863
                             [D.K. JAIN, J.]
         ,   proceedings under Section 482 of the Code. As regards the A
......       rest of three accused petitioners, the learned Judge allowed the
             petition holding that neither the cheque had been issued by them
             nor they had been shown to be vicariously liable under Section
             141 of the Act. Aggrieved by the said decision, the appellant
             has come up in appeal before us.                                 B

                  6. Learned counsel appearing for the appellant submitted
             that the High Court gravely erred in declining to exercise its
             jurisdiction under Section 482 of the Code in a case where the
             complaint ex facie lacked the basic ingredients of the offence
             under Section 138 of the Act for which the appellant has been
                                                                              c
             made to stand trial. It was contended that admittedly, the
             cheque in question, purportedly issued by the appellant, was
             from an account not maintained by him with the Indian Bank but
             by one Ms. Shilpa Chaudhary and therefore, the basic
             ingredient of Section 138 of the Act was missing. It was also D
             urged that since the said bank account had already been closed
             on 3rd November, 2000, there was no question of the subject
             cheque being issued in favour of the complainant by the
             appellant on 20th November, 2000. It was pleaded that the filing
             of the complaint under the said provision is an abuse of the E
             process of the Court and therefore, the High Court ought to have
             quashed the complaint.
         \
                  7. Per contra, learned counsel appearing on behalf of the
             complainant, supported the impugned order and submitted that F
             having issued the cheque to the complainant under his
             signatures by making a false representation that the account
             was maintained by him, the appellant had duped the
             complainant. It was contended that at this juncture the question
             whether or not the cheque was issued by the appellant is pre- G
             mature as the same would be determined only after the evidence
             has been led by the parties. Learned counsel thus, argued that
             the appellant having played a fraud on the complainant, does
             not deserve any relief.
                                                                             H
    864          SUPREME COURT REPORTS               [2009] 10 S.C.R.


A         8. It is true that Section 138 of the Act was enacted to         •
  punish unscrupulous drawers of cheques who, though purport                   _,..
  to discharge their liability by issuing cheque, have no intention
  of really doing so, yet to fasten a criminal liability under the said
  provision, necessary ingredients of the Section are to be
B satisfied. Section 138 of the Act reads as follows:

          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
c         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
D         by an agreement made with that bank, such person shall
          be deemed to have committed an offence and shall,
          without prejudice to any other provisions of this Act, be
          punished with imprisonment for a term which may be
          extended to two years, or with fine which may extend to
E         twice the amount of the cheque, or with both:

          Provided that nothing contained in this section shall apply
          unless-                                                          l


           (a)    the cheque has been presented to the bank within
F
                  a period of six months from the date on which it is
                  drawn or within the period of its validity, whichever
                  is earlier;

           (b)    the payee or the holder in due course of the cheque,
G                 as the case may be, makes a demand for the
                  payment of the said amount of money by giving a
                  notice in writing, to the drawer of the cheque, within
                  thirty days of the receipt of information by him from
                  the bank regarding the return of the cheque as
H
                  JUGESH SEHGAL v. SHAMSHER SINGH GOGI                       865
                              [D.K. JAIN, J.]

                            unpaid; and                                              A

......              (c)     the drawer of such cheque fails to make the
                            payment of the said amount of money to the payee
                            or, as the case may be, to the holder in due course
                            of the cheque, within fifteen days of the receipt of     B
                            the said notice.

                   Explanation.-For the purposes of this section, "debt or
                   other liability" means a legally enforceable debt or other
                   liability.
                                                                                     c
                     9. It is manifest that to constitute an offence under Section
              138 of the Act, the following ingredients are required to be
              fulfilled:

                    (i)     a person must have drawn a cheque on an account D
                            maintained by him in a bank for payment of a
                            certain amount of money to another person from out
                            of that account;

                    (ii)    The cheque should have been issued for the
                            discharge, in whole or in part, of any debt or other     E
                            liability;

         ..         (iii)   that cheque has been presented to the bank within ·
                            a period of six months from the date on which it is
                            drawn or within the period of its validity whichever F
                            is earlier;

                    (iv)    that cheque is returned by the bank unpaid, either
                            because of the amount of money standing to the
                            credit of the account is insufficient to honour the
                                                                                G
                            cheque or that it exceeds the amount arranged to
                            be paid from that account by an agreement made
                            with the bank;

                   (v)      the payee or the holder in due course of the cheque
                            makes a demand for the payment of the said               H
    866      SUPREME COURT REPORTS                 [2009] 10 S.C.R.


A                amount of money by giving a notice in writing, to the
                 drawer of the cheque, within 15 days of the receipt
                 of information by him from the bank regarding the
                 return of the cheque as unpaid;

          (vi)   the drawer of such cheque fails to make payment
B
                 of the said amount of money to the payee or the
                 holder in due course of the cheque within 15 days
                 of the receipt of the said notice;

         10. Being cumulative, it is only when all the afore-
C   mentioned ingredients are satisfied that the person who had
    drawn the cheque can be deemed to have committed an
    offence under Section 138 of the Act.

         11. In the case before us, it is clear from the facts, briefly
o   noted above, and in para 3 of the complaint as extracted, that
    on receipt of the return memo from the bank, the complainant
    is stated to have realized that the dishonoured cheque was
    issued from an account which was not maintained by accused
    No.1-the appellant herein, but by one Shilpa Chaudhary. As
E   a matter of fact and perhaps having gai~ed the said knowledge,
    on 20th January, 2001, the complainant filed an FIR against all
    the accused for offences under Sections 420, 467, 468, 471,
    406 of the Indian Penal Code (IPC). Thus, there is hardly any
    dispute that the cheque, subject matter of the complaint under
F   Section 138 of the Act, had not been drawn by the appellant
    on an account maintained by him in the Indian Bank, Sonepat
    branch. That being so, there is little doubt that the very first
    ingredient of Section 138 of the Act, enumerated above, is not
    satisfied and consequently the case against the appellant for
G   having committed an offence under Section 138 of the Act
    cannot be proved.

         12. The next question for consideration is whether or not
    in the light of the afore-mentioned factual position, as projected
    in the complaint itself, it was a fit case where the High Court
H
     JUGESH SEHGAL v. SHAMSHER SINGH GOGI                  867
                 [D.K. JAIN, J.]

 should have exercised its jurisdiction under Section 482 of the   A
 Code?

        13. The scope and ambit of powers of the High Court
  under Section 482 of the Code has been enunciated and
  reiterated by this Court in a series of decisions and several 8
  circumstances under which the High Court can exercise
  jurisdiction in quashing proceedings have been enumerated.
  Therefore, it is unnecessary to burden the judgment by making
  reference to all the decisions on the point. It would suffice to
  state that though the powers possessed by the High Courts C
  under the said provision are very wide but these should be
· exercised in appropriate cases, ex debito justitiae to do real
  and substantial justice for the administration of which alone the
  courts exist. The inherent powers do not confer an arbitrary
  jurisdiction on the High Court to act according to whim or
  caprice. The powers have to be exercised sparingly, with D
  circumspection and in the rarest of rare cases, where the court
  is convinced, on the basis of material on record, that allowing
  the proceedings to continue would be an abuse of the process
  of the court or that the ends of justice require that the
  proceedings ought to be quashed. [See: Janata Dal Vs. H.S. E
 Chowdhary & Ors. 1 , Kurukshetra University & Anr. Vs. State
 of Haryana & Anr. 2 and State of Haryana & Ors. Vs. Bhajan
 Lal & Ors. 3]

       14. Although in Bhajan Lat's case (supra), the court by way F
 of illustration, formulated as many as seven categories of
 cases, wherein the extra-ordinary power under the afore-stated
 provisions could be exercised by the High Court to prevent
 abuse of process of the court yet it was clarified that it was not
 possible to lay down precise and inflexible guidelines or any G



 1   (1992) 4 sec 305.
2.   (1977) 4 sec 451.
3.   1992 supp (1) sec 335.                                        H
    868       SUPREME COURT REPORTS               (2009] 10 S.C.R.


A   rigid formula or to give an exhaustive list of the circumstances
    in which such power could be exercised.

      15. The purport of the expression "rarest of rare cases" has
  been explained very recently in Som Mittal Vs. Government
B of Kamataka 4 • Speaking for the three-Judge Bench, Hon'ble
  the Chief Justice said:

           "When the words 'rarest of rare cases' are used after the
          words 'sparingly and with circumspection' while describing
          the scope of Section 482, those words merely emphasize
c         and reiterate what is intended to be conveyed by the words
          'sparingly and with circumspection'. They mean that the
          power under Section 482 to quash proceedings should not
          be used mechanically or routinely, but with care and
          caution, only when a clear case for quashing is made out
D         and failure to interfere would lead to a miscarriage of
          justice. The expression "rarest of rare cases" is not used
          in the sense in which it is used with reference to
          punishment for offences under Section 302 IPC, but to
          emphasize that the power under Section 482 Cr.P.C. to
E         quash the FIR or criminal proceedings should be used
          sparingly and with circumspection."

         16. Bearing in mind the above legal position, we are of
    the opinion that it was a fit case where the High Court, in
F   exercise of its jurisdiction under Section 482 of the Code,
    should have quashed the complaint under Section 138 of the
    Act.

       17. As already noted hereinbefore, in para 3 of the
  complaint, there is a clear averment that the cheque in question
G was issued from an account which was non-existent on the day
  it was issued or that the account from where the cheque was
  issued "pertained to someone else". As per complainant's own
  pleadings, the bank account from where the cheque had been

H 4. (200B) 3 sec 574.
   JUGESH SEHGAL v. SHAMSHER SINGH GOGI                   869
               [D.K. JAIN, J.]
issued, was not held in the name of the appellant and therefore, A
one of the requisite ingredients of Section 138 of the Act was
not satisfied. Under the circumstances, continuance of further
proceedings in the complaint under Section 138 of the Act
against the appellant, would be an abuse of the process of the
Court. In our judgment, therefore, the decision of the High Court B
cannot be sustained.

     18. In the result, the appeal is allowed; the impugned order
is set aside and as a consequence, Criminal Complaint No.
275 of 2008 pending against the appellant in the Court of Chief C
Judicial Magistrate, Panipat is quashed.

R.P.                                          Appeal allowed.