Penal Code, 1860 – S. 420 – Negotiable Instruments Act, 1881 – Ss. 138 & 145 – Evidence on Affidavit – Summoning Order for an offence punishable under Section 420 IPC on the basis of affidavit evidence received by the Magistrate with the aid of Section 145 of the Negotiable Instruments Act is manifestly illegal and cannot be sustained. 


In Chamber Case :- APPLICATION U/S 482 No. – 14336 of 2004

Order Date :-01.12.2017

Applicant :- Alok Rajgardia Opposite Party :- State Of U.P. And Others

Counsel for Applicant :- Neeraj Pandey,G.S. Chaturvedi Counsel for Opposite Party :- Govt. Advocate

Hon’ble J.J. Munir,J.

The applicant Alok Rajgardia is the drawer of a bounced cheque and has been summoned by the learned XIIIth Additional Chief Judicial Magistrate, Room No. 46, Agra vide order dated 29.04.2004 to stand his trial for an offence punishable under Section 138 Negotiable Instruments Act.

The aforesaid order has been passed in Complaint Case No. 3020 of 2004 (M/S S.E. Investments Limited vs. Radhika Automobiles Pvt. Ltd. and others.) and hereinafter is referred to as the impugned order; the complaint giving rise to Complaint Case No. 3020 of 2004 last mentioned is hereinafter referred to as the ‘Complaint’. Alok Rajgardia is hereinafter referred to as the ‘Drawer’ whereas the M/S S.E. Investments Limitedopposite party no. 2 is hereinafter referred to as the “Payee’.

That facts material on the basis of which the Complaint was laid by the Payee are that the Payee are a duly incorporated company engaged in the business of financing purchase of motor vehicles, consumer durables and machinery on hire purchase secured by hypothecation. On 10.02.2000, the Drawer along with his brother Ashok Rajgardia and father K. L. Rajgardia and Vikas Nahar came to the office of the Payee requesting finance for machinery on hire purchase in the name of his company M/s Radhika Automobiles Pvt. Ltd. After satisfying themselves about the authority and antecedents of the Drawer, the Payee financed a sum of Rs. 28,00,000/- whereon Rs, 10,50,000/- were hire charges aggregating a total sum of Rs. 38,50,000/- in favour of M/s Radhika Automobiles Pvt. Ltd on condition that the Drawer would repay the loan in 35 monthly installments each worth Rs. 1,10,000/- commencing w.e.f. 10.02.2000. On 04.11.2000, the Drawer again visited the office of the Payee and requested finance to purchase two Baleno cars and one Maruti AC Car on hire purchase basis in the name of the company, that is to say, M/s Radhika Automobiles Pvt. Ltd. The Payee on being satisfied that the Drawer had requisite authority given by the Board of Directors of the Company under reference to raise finance granted in the meeting of the Board held on 28.09.2000 proceeded to process the request and financed a sum of Rs. 16,50,000/- to purchase three cars under a hire purchase agreement whereon a sum of Rs. 4,12,502/- worked out as hire charges, the loan thus aggregating to a sum of Rs. 20,62,502/-. The aforesaid loan was also advanced in favour of M/s Radhika Automobiles Pvt. Ltd and was repayable in 23 monthly installments of Rs. 89,674/- commencing 04.11.2000.

It is alleged that the Drawer issued cheque bearing no. 594446 on behalf of the company M/s Radhika Automobiles Pvt. Ltd dated 12.09.2002 worth of Rs. 50,00,000/- drawn on Canara Bank, Belanganj, Agra to discharge the company’s liability and debt due on account of the loan as aforesaid.

The Drawer deposited the said cheque in account maintained with Central Bank of India, Agra for collection but the cheque was returned dishonoured by the Drawer’s Bank with a remark “Funds Insufficient” on 13.09.2002. The Payee received information about the dishonour from his bank on 14.09.2002.