Criminal Application No.4434 of 2009,Criminal Application No.4435 of 2009,Criminal Application No.4443 of 2009,Criminal Application No.4452 of 2009,Criminal Application No.4460 of 2009

8th February, 2010

Petitioner Counsel: Shri. ASHOK P. MUNDARGI,Shri. S. V. MARWADI ,Shri. NIRANJAN MUNDARGI,Mr. JAYANT BARDESKAR, Mr. HRISHIKESH A. MUNDARGI, Ms. BHAKTI DESHPANDE, Ms. SWAPNA KODE, Ms. VISHRANTI NAVALE
Respondent Counsel: Mrs. PRAVINA KANANI , Ms. VIDYA DONGRE,Smt. R. V. NEWTON,Smt. P. P. BHOSALE,Smt. S. V. GAJARE,Shri. D. R. MORE

Cases Cited:
Rakesh Nemkumar Porwal Vs. Narayan Dhondu Joglekar, 1993 Mh.L.J. 630 [Para 10,13,14,20]
Jaikrishna M. Patil Vs. Dilip D. Chawde, 2006 L.J. Soft Bombay 185 [Para 10,13,14,28]
Vinod Tanna Vs. Jaheer Siddiqui, (2002)7 SCC 541 [Para 11,22,28]
Rajkumar Khurana Vs. State of Delhi, Cri. Appeal No.913/2009, Dt.:-5/5/2009 [Para 11]
Rajan Kinnerkar Vs. Eric Cordeiro, (1994)3 Bom.C.R. 634 [Para 13]
NEPC Micon Ltd. Vs. Magma Leasing Ltd., 1999(4) ALL MR 367 (S.C.)=AIR 1999 SC 1952 [Para 14,25]
Modi Cements Vs. Kuchil Kumar Nandi, 1998(2) ALL MR 433 (S.C.)=1998 SCC 249 [Para 14,22]
Dinesh Harakchand Sankla Vs. Kurlon Ltd., 2006(3) ALL MR (JOURNAL) 1=2006 Cr.L.J. 261 [Para 14]
Rajan Kinnerkar Vs. Eric Cordeiro, 1994(3) Bom.C.R. 634 [Para 14]
S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla, 2007 ALL MR (Cri) 870 (S.C.)=2007 Company Cases 268 (S.C.) [Para 14]
Krishna Murari Poddar Vs. State, 1999(1) ALL MR 259=1999 Bom.C.R. (Cri.) 432 [Para 14]
Malwa Cotton & Spinning Mills Vs. Virsa Singh Sidhu, 2008(5) ALL MR 478 (S.C.)=2008 AIOL (S.C.) 368 [Para 14]

JUDGMENT

JUDGMENT :- In all these matters, the common question that has been raised is "Whether a complaint under Section 138 of Negotiable Instruments Act, is maintainable when the complainant receives an intimation of dishonour from the banker of the drawer to the effect that "the signature of the drawer does not tally" or the remarks of the bankers are "Drawers signature differs from the specimen signature ?"."

2. In other words, when the Negotiable Instruments Act and more particularly Section 138 thereof permits filing of a complaint alleging commission of offence under Section 138 of N.I. Act on the ground that the dishonour of cheque is for insufficiency etc. of the funds is such a complaint tenable or the words are restrictive in nature, hence not capable of a wide meaning. Thus, assuming that the substantive provision is restrictive, yet, considering the title of the section in question, whether a complaint can be filed under Section 138 even if the endorsement or bankers slip is to the afore mentioned effect.

3. The facts in Criminal Application No. 4434 of 2009 need be noted for the purpose of appreciating the rival contentions. The first-respondent complainant filed a complaint before the Metropolitan Magistrate, 31st Court, Vikhroli, Mumbai being Case No.437/SS/2009 against the petitioner, who is accused no.4. It is alleged that the complainant is a proprietory of M/s. Jai Ambe Enterprises, which is a proprietory concern. It is stated that the first accused is a company incorporated under the Companies Act, 1956. Accused nos.2 and 3 are directors and authorised signatories of accused no.1, whereas, accused nos.4, 5 and 6 are also authorised signatories. Each of these accused are responsible for the day to day affairs and management of accused no.1. They were responsible for the day to day affairs and management when the cheques, which are subject matter of the complaint were presented and returned dishonoured, so also, when the cause of action arose.

4. It is alleged that during their course of business, accused nos.2 to 6 on behalf of the first accused placed orders with the complainant for delivery of goods and the complainant sold and delivered goods worth crores of rupees. There was no dispute regarding quality and quantity of the goods sold. There were invoices/bills forwarded and as per the Books of Accounts maintained by the complainant, a sum of Rs.8,49,69479.50/- was due and payable.

5. It is alleged that after issuance of several cheques in discharge of their liability and particularly towards the goods sold and delivered and when the funds could not be arranged for honouring the cheques that the accused by their letter dated 30/12/2008 made false and baseless allegations, disputing the rate of the goods sold and delivered.

6. It is alleged that for the first time, accused no.1 informed the firm that a portion of the bank account of accused no.1 has been changed due to alleged mal-practices by employees of accused no.1, particularly, the petitioner who is accused no.4. Thereafter, there was correspondence on this issue and it is alleged that the cheques which are subject matter of the complaint were signed by accused nos.5 and 6 being authorised signatories of the accused no.1 with the consent and knowledge of accused nos.2, 3 and 4 in discharge of their liabilities and the three cheques of Rs.5,86,077/- when presented came to be returned with the bankers memo which reads as under :

"Drawers signature differs from the specimen signature".

7. Thereafter, it is alleged that the Statutory Notice [S.138(b)] was sent to which no reply was received for a considerable length of time, until, the letter dated 26/02/2009. By this letter, the accused made false and baseless allegations and there was a rejoinder therefor addressed to the same.

8. It is upon these allegations and contending that there was enough opportunity to the accused to replace the returned cheques with fresh cheques that the offences punishable not only under Section 138 of the Negotiable Instruments Act but under Section 402 of IPC have been committed. This complaint is dated 7/3/2009. Annexed thereto are the bankers memos and copies of the letters.

9. When this complaint was placed before the Magistrate concerned, he observed that prima-facie case of an offence punishable under Section 138 of the Negotiable Instruments Act has been made out and therefore process be issued against all the accused. It is against this order that the instant petition has been filed.

10. Mr. Mundargi, learned Senior Counsel appearing on behalf of the petitioner-applicant contended that on a bare perusals of Section 138, the complaint is not maintainable. He submits that Section 138 of the N.I. Act falls under Chapter - which provides for penalties in case of dishonour of certain cheques for insufficiency of funds in the accounts. If the title to this section coupled with the section itself is perused, it is apparent that barring the return of the cheques as unpaid by the bank either because of the amount of money standing to the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid by an agreement with the bank, a person shall be deemed to have committed an offence, the same is not an offence in other events of dishonour. Mr. Mundargi, submits that the section provides for a deeming fiction. He submits that the principles while interpreting the deeming fiction are well settled. What is deemed to be existing is not the real position. The state of affairs are to be imagined to be true. Therefore, when the deeming fiction has to be applied in only two contingencies and cases, then, it cannot be extended to cover any other contingency or cause for dishonour of the cheque or it being returned unpaid by the bank. Mr. Mundargi, submits that, by Section 146 of the N.I. Act the Bank's slip is prima-facie evidence of certain facts. He further submits that if the various sections falling under this Chapter are read harmoniously, then, no other reason stated can be said to be creating an offence by virtue of the deemed fiction. Therefore, it is not possible to extend the section to cases and reasons not stipulated therein, by interpretative process. He submits that the word "etc" should be seen in the backdrop of the Chapter, the arrangement of sections and the intent and object of the legislature while inserting Chapter-XVII in the N.I. Act, 1881. Mr. Mundargi, submits that the decision of the Division Bench of this court in the case of Rakesh Nemkumar Porwal Vs. Narayan Dhondu Joglekar & anr. reported in 1993 Mh.L.J. 630, so also, the decision of the learned Single Judge of this court in the case of Jaikrishna M. Patil Vs. Dilip D. Chawde reported in 2006 L.J. Soft Bombay P.185 will not be of any assistance. He submits that the decision of the Single Judge in Criminal Appeal No.396 of 1997 decided on 30/01/2006 is rendered after a trial. There on facts, the learned Judge found that the case of the complainant is that the accused deliberately made a different signature to avoid payment. On facts and when the entire evidence was perused that the learned Judge rendered a finding that the act of the accused was not bonafide and therefore the difference in the signature was not a reason to dismiss the complaint. He submitted that this decision must be seen in the factual backdrop and in the peculiar circumstances emerging from the record. This decision is of no assistance while interpreting the section. Further, the Division Bench was dealing with a case where the cheque was returned unpaid for insufficiency of funds but finding that the drawer managed to close the Account or stop payments, that the Division Bench interpreted the section widely and held that the complaint was maintainable.

11. Mr. Mundargi, submits that all these decisions are based upon the wide interpretation placed on the section by the Supreme Court itself. However, in later decisions and more particularly that of the two judge bench of the Supreme Court in Vinod Tanna Vs. Jaheer Siddiqui and Ors. reported in (2002)7 SCC 541 : [2002 ALL MR (Cri) 975 (S.C.)], earlier decisions have been distinguished and a view taken that dishonour of cheque because of incomplete signature of drawer, does not attract Section 138. Mr. Mundargi, also invited my attention to a two Judge Bench decision of the Hon'ble Supreme Court in Criminal Appeal No.913 of 2009 decided on 5/5/2009 (Rajkumar Khurana Vs. State of Delhi & Anr.) wherein the Hon'ble Supreme Court took a view that the parameters for invoking Section 138 are limited. The refusal on the part of the bank to honour the cheque in all cases for varied reasons cannot be said to be attracting these provisions. In the case before the Supreme Court (supra), the cheque was returned with the memo "said cheque lost by the drawer". It is in that context that the Supreme Court observed that the purpose of a legal fiction is clear. That cannot be extended for any purpose other than the one mentioned in the statutory provision. Mr. Mundargi, emphasized that the provision in question is a penal one. Therefore, it must receive strict Interpretation. For all these reasons, he submits that the complaint is not maintainable and no process could have been issued on such a complaint.

12. On the other hand, Ms. Kanani, appearing on behalf of the original complainant submitted that the complaint in this case must be perused as a whole. The test is whether all allegations in the complaint assuming to be true, make out a case of an offence punishable under the penal laws. Ms. Kanani submits that in this case, the complaint alleges that over a period of time, there were transactions, goods were delivered, bills and invoices were forwarded and no dispute was raised with regard to liability. At no stage, the accused denied their liability to make payment. The accused went on forwarding cheques and the cheques being returned with the aforementioned remark by itself would not mean that the complaint is not tenable. If the cheques are returned with such remarks and memos but the drawer fully knows that the funds are insufficient, then, the substantive provision is attracted and it is only when the matter is tried that it can be held whether the complaint is maintainable or not. Today, this court should not presume that complaints filed under Section 138 for such remarks and memos of the bankers, can be said to be straightaway not maintainable. She submits that in some of the cases, the endorsements are that the cheques are returned not because of the signature difference, but, also on account of insufficiency of funds. Therefore, whenever such twin reasons are assigned for returning the cheques unpaid, then, the complaint is in any event maintainable, insofar as, the other reason for dishonour is concerned. Therefore, the complaint will have to be construed and perused in each case to find out whether an offence punishable under Section 138 has been committed or not. Consequently, it is a matter of individual facts and no general rule can be laid down.

13. She heavily relied upon the decision of the Division Bench of this court in the Rakesh Nemkumar Porwal's (supra) case. She invited my attention to paragraphs-18, 19 and 20 and emphasized that the word "etc" cannot be held to be a surplusage. She submits that the legislature inserts every word with some purpose. If the title to the section uses such words, then, the intent is clear. The legislature does not exhaust itself, insofar as, the reasons for dishonour are concerned. Even if the dishonour of the cheque is for reasons other than insufficiency of funds, still, a complaint under Section 138 is maintainable, is the conclusion of the Division Bench and this decision is binding upon this court. Further, the views of learned Single Judge of this Court in the case of Jaikrishna Patil (supra) and Rajan Kinnerkar Vs. Eric Cordeiro & anr., (1994)3 Bom.C.R. page 634 'are', binding upon this court. She submits that once the essential averments are made in the complaint and the object and purpose of the enactment is understood, then, the complaints in question cannot be thrown out as not maintainable.

14. She has relied upon the following decisions in support of her contentions.

(1) 1993 Mh.L.J. 630 - Rakesh Nemkumar Porwal Vs. Narayan Dhondu Joglekar and anr..

(2) AIR 1999 SC 1952 : [1999 ALL MR (Cri) 1837 (S.C.) : 1999(4) ALL MR 367 (S.C.)] - NEPC Micon Ltd. Vs. Magma Leasing Ltd..

(3) 1998 SCC 249 : [1998(2) ALL MR 433 (S.C.)] - Modi Cements Vs. Kuchil Kumar Nandi.

(4) Supreme Court of India SLP 2977-2978/2004 - Madan Singh Vs. Mohanlal & Ors.

(5) 2006 L.J. Soft Bombay P.185 - Jaikrishna M. Patil Vs. Dilip D. Chawde.

(6) 2006 Cr.L.J. 261 : [2006(3) ALL MR (JOURNAL) 1] - Dinesh Harakchand Sankla Vs. Kurlon Ltd. & anr.

(7) 1994(3) Bom.C.R. 634 - Rajan Kinnerkar Vs. Eric Cordeiro & anr.

(8) 2007 Company Cases 268 (S.C.) : [2007 ALL MR (Cri) 870 (S.C.)] - S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla & Ors..

(9) 1999 Bom.C.R. (Cri.) 432 : [1999(1) ALL MR 259] - Krishna Murari Poddar & anr. Vs. State.

(10) 2008 AIOL (S.C.) 368 : [2008(5) ALL MR 478 (S.C.)] - Malwa Cotton & Spinning Mills Vs. Virsa Singh Sidhu & anr..

15. Thus, the only question that falls for interpretation in these applications is whether a complaint can be said to be maintainable when the reasons for returning the cheques unpaid are other than insufficiency of funds.

16. The undisputed position is that Chapter-XVII has been inserted by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (66 of 1988). The Chapter has been inserted with effect from 1/04/1989. The legislature was aware of the fact that the Chapter had to be inserted to enhance the acceptability of cheques in settlement of liabilities by making the drawer liable for penalties, in case of bouncing of cheques due to insufficiency of funds in the account or for the reason that it exceeds the arrangement made by the drawer, with adequate safeguard to prevent harassment of honest drawers. The Statement of Objects and Reasons by itself cannot be held to be a guide for interpreting the statute, and the plain words must be looked into, but, whenever there is a doubt, then, for a limited purpose and for construction of the substantive provisions, assistance can be taken of Statement of Objects and Reasons. That is to discern the legislative intent. In the instant case, a perusal of Chapter-XVII which is titled as "Of Penalties in case of dishonour of certain cheques for Insufficiency of Funds in the Accounts", would show that Section 138 opens with the words "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". He shall be punished with imprisonment which may extend now for two years or with fine, which may extend to twice the amount of the cheque or with both. However, this is without prejudice to any other provisions of the Negotiable Instruments Act. Thus, a new Chapter is inserted which provides for penalties for dishonour of certain cheques. There is substance in the contention of Shri. Mundargi that the word "etc" should not be seen in isolation, but, must be seen in the backdrop of the title to the Chapter, the Statement of Objects and Reasons and the substantive provision itself. The offence that is carved pertains to payment of amount of money, that the drawer owes to another person by cheque. That cheque is drawn because the drawer maintains an account with the bank and money is deposited by him with the banker which lies to the credit of the drawer. The cheque is for payment of money for discharge in whole or in part of the debt or any other liability. The proceeds of the cheque have to be honoured by the banker from the Account of the Drawer maintained by it. When the legislature is aware that the account of the drawer has money standing to his credit and the drawer draws a cheque, but, that amount of money is insufficient to honour the cheque, that the cheque will be returned unpaid by the banker. Sometimes, the amount of money standing to the credit of that account is inadequate to honour the cheque, because, the amount of the cheque exceeds the arrangement with the bank. Therefore, although the marginal note of the Section reads as "dishonour of the cheques" yet, the substantive provision uses the word "returned unpaid by the banker". The legislature does not intend to make any other act or reason assigned by the banker for returning the cheque unpaid as an offence. This is clear from the fact that it creates a fiction and states that such person shall be deemed to have committed an offence.

17. The deeming fiction and its interpretation is subject-matter of several decisions of the Hon'ble Supreme Court. It would not be necessary to refer to each of them but the principles emerging from them are summarised in "Principles of Statutory Interpretation by Hon'ble Justice G.P. Singh" wherein, the learned Author observes thus :

"In interpreting a provision creating a legal fiction, the court is to ascertain for what purpose the fiction is created, and after ascertaining this, the Court is to assume all those facts and consequences which are incidental or inevitable corollaries to the giving effect to the fiction. But in so construing the fiction it is not to be extended beyond the purpose for which it is created, or beyond the language of the section by which it is created. It cannot also be extended by importing another fiction. The principles stated above are "well settled". A legal fiction may also be interpreted narrowly to make the statute workable."

18. In the decision relied upon by Shri. Mundargi (Vinod Tanna's case) as well, the Hon'ble Supreme Court has observed that the legislature has carved out an offence in limited cases. It is only when the cheque is returned unpaid either because of the amount of money standing to the credit of the Account is insufficient to honour the cheque or that the cheque amount exceeds the amount arranged to be paid in that Account by an agreement with that bank, that the offence is committed. Therefore, there is merit in the contention that the word "etc" would not be decisive. The section must be read as a whole. The principles of statutory interpretation are clear. Even parts, sub-parts and sub-sections of a section must be read together and as a whole, so as to make a consistent enactment. It is not permissible to leave out or omit some words or add some words which the legislature never intended. It cannot be said that the legislature was unaware of the varied reasons for which the cheques could be returned unpaid. However, when it enacted the provision carving out an offence only for limited acts, then, that legal fiction cannot be extended to include something which the legislature has not included. That would amount to adding something to the provision, which is impermissible. If the plain words are taken into account, then, it is not possible to agree with the complainants that if the cheques are returned unpaid on account of difference in the signatures on the cheque or for aforementioned reasons that the complaint would be maintainable.

19. However, it must be at once clarified that if the cheques are returned unpaid for more than one reason and if one of the reason assigned is that the amount is insufficient as provided by Section 138, then, in individual facts and cases, the complaints can be held to be maintainable and it will be for the parties to establish and prove their rival cases. Such complaints by themselves cannot be held to be non-maintainable. The case that I am considering is of the cheque being returned unpaid on account of difference in signature and there are no other reasons for dishonour in some of the cases that were brought to my notice.

20. Now comes the decision of this court in Rakesh Nemkumar Porwal (supra) case.

21. There, the Division Bench was considering the complaint wherein all 12 cheques were returned by the complainant's bankers with the endorsement "refer to drawer". Therefore, what fell for interpretation of the Division Bench, was whether the complaint can invoke Section 138 of Negotiable Instruments Act and in that context the Division Bench referred to the rival contentions. It refers to several decisions of the High Courts in India. It is thereafter that the Division Bench concluded in paragraph-18 that the circumstances in which, such dishonour takes place have to be totally ignored. The law takes no note of the fact that the payment is not forthcoming and it matters little that any of the manifold reasons may have caused that situation, if, for instance the closure of an account or the stoppage of payment or any other of the commonplace reasons. It may be true that the Division Bench referred to the legislative intent and the dictionary meaning of the term "dishonour", so also, the word "etc" but at the same time, the Division Bench held that the intention was not to punish the drawer whose cheque has not been honoured in one or two limited situations permitting at the same time the same result in altered circumstances. Therefore, if such situation is having relation to the substantive provision, namely, insufficiency of funds, that the Division Bench held that the complaint in that case was maintainable. The Division Bench decision must be read in the backdrop of the factual position and the instances brought to its notice. The Division Bench was not required to consider a case of the present nature.

22. In any event, after the Division Bench decision was rendered, much water has flown. In two decisions of the Hon'ble Supreme Court to which my attention has been invited by Shri. Mundargi, the view taken is that if the cheque is returned with the remark or reason "cheque lost by the drawer" or "signature of the drawer being incomplete", then, Section 138 cannot be invoked. I am bound by these decisions. In Vinod Tanna's case [2002 ALL MR (Cri) 975 (S.C.)] (supra), the Supreme Court referred to its earlier decisions in the case of Modi Cements [1998(2) ALL MR 433 (S.C.)] (supra), K. K. Sidharthan, Electronics Trade & Technology Development Corporation Ltd. (supra) and distinguished Modi Cements case and referred to the other two cases. There the order of this court refusing the prayer of the accused to quash the criminal proceedings was under challenge. The complaint before the Supreme Court was that the cheque was not dishonoured for insufficiency of funds but on the ground that the drawer's signature was incomplete. It is in that context that in paragraph-5 the Supreme Court held thus :

"Mr. Bobde, learned Senior Counsel appearing for the appellants contends that the High Court has failed to appreciate the ratio of the judgment of this Court in Modi Cements case inasmuch as in paragraph 11 of the said judgment, the Court had recorded a conclusion that it is in complete agreement with the legal proposition enunciated in Electronics Trade & Technology Development Corpn. Ltd. Vs. Indian Technologists & Engineers (Electronics) (P) Ltd. as well as K.K. Siddharthan Vs. T.P. Praveena Chandran. In these two cases, the cheque in question had been dishonoured because of insufficiency of funds or the amount exceeded the arrangement made with the bank and in Electronics Trade & Technology Development Corpn. Ltd. the cheque had not been honoured because of the direction from the drawer regarding stop-payment. In fact, a plain reading of Section 138 of the Act makes it crystal clear that unless the conditions precedent mentioned therein are satisfied, the said penal provision cannot be attracted. In this view of the matter and on the admitted facts, as rendered to in paragraph 5 of the impugned judgment, we have no hesitation in coming to the conclusion that the High Court committed error in relying upon the judgment of this Court in Modi Cements and refusing to quash the criminal proceedings. We accordingly set aside the impugned judgment of the High Court, quash the criminal proceedings and allow the criminal appeal."

23. In the second Decision, Raj Khurana (supra), the Supreme Court was concerned with maintainability of the complaint when the Bank Memo stated "cheque lost by the Drawer" Answering the question in the negative, the Supreme Court holds thus :-

9. Section 138 of the Act 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 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 twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless-

(a) the 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;

(b) the payee or the holder in due course of the cheque, 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 unpaid; and

(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 the said notice.

Explanation.- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability."

10. A bare perusal of the aforementioned provision would clearly go to show that by reason thereof a legal fiction has been created. A legal fiction, as is well known, although is required to be given full effect, has its own limitations. It cannot be taken recourse to for any purpose other than the one mentioned in the statute itself.

In State of A.P. and Anr. Vs. A. P. Pensioners Association and Ors. [(2005)13 SCC 161], this Court held :

"...In other words, all the consequences ordinarily flowing from a rule would be given effect to if the rule otherwise does not limit the operation thereof. If the rule itself provides a limitation on its operation, the consequences flowing from the legal fiction have to be understood in the light of the limitations prescribed. Thus, it is not possible to construe the legal fiction as simply as suggested by Mr. Lalit."

11. Section 138 of the Act moreover provides for a penal provision. A penal provision created by reason of a legal fiction must receive strict construction. [See R. Kalyani Vs. Janak C. Mehta and Ors., (2009)1 SCC 516 and DCM Financial Services Ltd. Vs. J. N. Sareen and Anr., (2008)8 SCC 1]. Such a penal provision, enacted in terms of the legal fiction drawn would be attracted when a cheque is returned by the bank unpaid. Such non-payment may either be : (i) because of the amount of money standing to the credit of that account is insufficient to honour the cheque, or (ii) it exceeds the amount arranged to be paid from that account by an agreement made with that bank.

Before a proceeding thereunder is initiated, all the legal requirements therefor must be complied with. The court must be satisfied that all the ingredients of commission of an offence under the said provision have been complied with.

The parameters for invoking the provisions of Section 138 of the Act, thus, being limited, we are of the opinion that refusal on the part of the bank to honour the cheque would not bring the matter within the mis-chief of the provisions of Section 138 of the Act."

24. In the face of these authoritative pronouncements, it will not be proper for me to hold that in a complaint, if the reason for dishonour or return of the cheque as unpaid, being other than insufficiency of funds and particularly in relation to the signature or defects therein, then it is maintainable. In the later Decision, the effect of a Deeming provision and Legal fiction is considered and it is held that the language cannot be extended to cover anything or stretched beyond its limited purpose.

25. The reliance on the other decisions of the Hon'ble Supreme Court is not accurate. Paragraph-10 of NEPC Micon Ltd. [1999 ALL MR (Cri) 1837 (S.C.) : 1999(4) ALL MR 367 (S.C.)] (supra) read thus :

"10. This Court in the case of Kanwar Singh Vs. Delhi Administration, (1965)1 SCR 7 : (AIR 1965 SC 871) while construing Section 418(i) of the Delhi Municipal Corporation Act, 1959 observed:

"It is the duty of the court in construing a statute to give effect to the intention of the legislature. If, therefore, giving a literal meaning to a word used by the draftsman, particularly in a penal statute, would defeat the object of a legislature, which is to suppress a mischief, the Court can depart from the dictionary meaning or even the popular meaning of the word and instead give it a meaning which will advance the remedy and suppress the mis-chief."

These observations must be seen in the backdrop of the controversy before the Supreme Court. The Supreme Court was considering the issue when the cheque is returned by the Bank unpaid on the ground that the "Account is Closed" would it mean that it is returned on the ground of insufficiency of funds. Holding that, it would be covered by Section 138 despite this reason, that the observations in para 10 have been made. They must be seen together with the other paras and more particularly para 7 of the Decision so read, they are of no assistance in this case.

26. To my mind, the Court while exercising jurisdiction for taking cognizance of an offence under Section 138 was required to consider only allegations made in the complaint and the material produced by the complainant. If there is no allegation that the accused did not have sufficient funds in the bank account and the cheque is returned unpaid for want of compliance with the requirement of the signature thereon not matching with that of the specimen signature or the cheque being returned with the remark in terms of the Hon'ble Supreme Court decisions referred above, then, the complaint cannot be held to be maintainable. Reliance placed on the words "etc." appearing in the title to Section 138 of the N.I. Act is somewhat misplaced. In "Law Lexicon, The Encyclopaedic Law Dictionary" by P. Ramanatha Aiyar 3rd Edition Reprint 2007, the word Etc. or Et cetera is defined thus :

"Et cetera (etc.). And so forth; and so on; and the rest; and others; others of the like kind, Where the words 'etc.', follow an enumeration of specific things beginning with "all kinds of trees" having some characteristic, the words should be restricted to things of the same nature as those already mentioned. In such a case the rule of ejusdem generis will apply. (AIR 1923 Mad 511 : 44 MLJ 285 : 1923 MWN 230 : 72 IC 258).

A bequest of "all household furniture and effects, plate, glass, wearing apparels, etc.", would pass the articles enumerated and others ejusdem generis but not the general residue. (Newman Vs. Newman, 26 Bea. 220).

The word 'etc.' does not share the character of an inclusive definition and cannot therefore enlarge the scope of the expression 'Institution'. K. V. Mathew Vs. District Manager, Telephones Ernakulam, AIR 1984 Ker. 40, 42."

In the opinion of the Learned Author and relying upon the Decision of the Kerala High Court reported in AIR 1984 Kerala Pg.40 (K. V. Mathew Vs. District Manager Telephones, Ernakulam) the word "etc." does not share the Character of Inclusive Definition. It cannot enlarge the Scope of Section 138 of N.I. Act. The word by itself would not mean that cases not covered by the Expressions "Either" "or" are falling within the purview of the Section. The offence is committed in the event of Dishonour or Return of cheques for insufficiency of funds or the amount of the cheque exceeding the Arrangement in the Account. The other reasons having co-relation with the offence, in a given case, may be just an excuse for insufficiency of funds. The cases of signatures being deliberately left incomplete or the Bank Memo being false or collusive must be specifically alleged and proved and only then can the Court conclude that this reason is a mere cloak for the real cause, namely, Insufficiency of funds. In such an event a different conclusion on maintainability of the complaint may be possible. However, before me such a case is not pleaded by parties.

27. Any wider question or controversy need not be decided. I am considering the limited cases wherein the cheque is returned unpaid due to defect in the signature and that alone is the reason stated in the memo. Therefore, the decision that I am rendering today must be seen in that context only. I do not intend to lay down any General Principle since it is not necessary to do so.

28. As far as the decision of the learned Single Judge of this court in Jaikrishna s/o. Mahadeorao Patil (supra) case is concerned, the said decision is delivered on 30/01/2006. The attention of the learned Single Judge was not invited to the decision of Supreme Court in the case of Vinod Tanna's [2002 ALL MR (Cri) 975 (S.C.)] (supra). That apart, on evidence and in peculiar facts emerging from the records that the learned Judge took the view that the accused had committed an offence punishable under Section 138 of N.I. Act. That must be seen as rendered in the peculiar facts and circumstances before the learned Judge and not laying down any general principles, much less, holding that the complaint can be said to be maintainable if the reason for dishonour is other than that enumerated in Section 138 of N.I. Act. In the result, it is held that whenever the complaint under Section 138 of N.I. Act is alleging that the cheque in question had not been honoured or returned unpaid only on account of defect or deficiency in signature, then the complaint under Section 138 of N.I. Act would not be maintainable. However, if the complaint also alleges commission of offence under Sections 415, 420 of IPC, then, to that extent, it can be held to be maintainable but no process for summoning the accused for charge punishable under Section 138 of N.I. Act can be issued.

29. In the light of the above, the applications where the complaints are alleging commissions of offence under Section 138 of N.I. Act when the only reason for the cheque being returned unpaid is defect or deficiency in Drawer's signature, then, they are held as not maintainable. They will have to be quashed to the extent indicated above. Rule made absolute accordingly.

Ordered accordingly.