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2023 (7) TMI 294 - HC - Indian LawsDishonor of Cheque - validity of summon, and notice framed under Section 251 of the CrPC - whether the security cheques given by the petitioners were towards any future consideration or legally enforceable debt? - invocation of jurisdiction of this Court under Section 482 of the CrPC - HELD THAT - In the case of Indus Airways Private Limited and Others v. Magnum Aviation Private Limited and Another 2014 (4) TMI 464 - SUPREME COURT , the Hon ble Apex Court, in the facts of that case, held that a post-dated cheque issued by way of advance payment against a purchase order cannot be considered as a cheque issued towards the discharge of legally enforceable debt. In the said case, it was admitted between the parties that the purchase order was cancelled. The Hon ble Apex Court held that in such circumstances, the cheque could not be held to have been presented for encashment for discharge of legally enforceable debt or liability. This Court, in the case SURESH CHANDRA GOYAL VERSUS AMIT SINGHAL 2015 (5) TMI 1246 - DELHI HIGH COURT had an occasion to deal in detail with the circumstances where the debt in question can be interpreted to be owed by the accused to the complainant for the purpose of Section 138 of the Negotiable Instruments Act. The Court interpreted the term legally enforceable debt when the cheques are issued as a security. It was held that the expression security cheque is not a statutorily defined expression in the Act. There can be a situation where the cheques are given to provide an assurance or comfort to the drawee that in case of failure to pay the primary consideration on the due date, the security may be enforced. Section 138 specifically mentions that the cheque must have been issued for discharge of not only any debt but can also be for other liability . It is therefore, not necessary that when the cheques are issued, the drawer had any debt to discharge on the date of issuance. The debt or any liability is to exist when the cheque in question is presented for encashment - the allegations made in the complaint, at the stage when the complaint is sought to be quashed at the initial stage, are to be taken as correct unless evidence of unimpeachable character has been produced. The defence taken by the petitioner is that it had not received any gold from the complainant and that the liability has not been crystalized so as to attract the provisions of Section 138 of the Negotiable Instruments Act. The legal presumption of the cheques having been issued in the discharge of liability must also receive due weightage. In a situation where the accused moves Court for quashing even before the trial has commenced, the Court's approach should be careful not to prematurely extinguish the case by disregarding the legal presumption supporting the complaint. The Hon ble Supreme Court in a recent decision of S.P. MANI AND MOHAN DAIRY VERSUS DR. SNEHALATHA ELANGOVAN 2022 (9) TMI 846 - SUPREME COURT , had held that the provisions contained in the NI Act create a statutory presumption of dishonesty, exposing a person to criminal liability if payment is not made within the statutory period even after issuance of notice. It further held that everything stated in the complaint is taken to be correct at the initial stages and the allegations made therein are to be liberally construed in favour of the complainant at the time of issuance of process. When there is a legal presumption and where facts are contested, it would not be judicious for the Court to separate the wheat from the chaff under the garb of inherent powers. It has been held time and again that the power of quashing criminal proceedings while exercising power under Section 482 of the Cr.P.C should be exercised sparingly and with circumspection. The Court, at this stage is not to embark upon an inquiry as to the reliability or genuineness of the allegations made in the complaint - The presumption envisaged under Section 139 of the Negotiable Instruments Act is a rebuttal presumption at the time of trial. The Court can exercise power under Section 482 of the Cr.P.C, if the complaint on the face of it does not make out any case against the accused or if any evidence of an unimpeachable nature is produced. This Court finds that the petitioners, at best, have raised questions of fact mixed with questions of law which cannot be examined in the limited jurisdiction under Section 482 of the CrPC, for it is desirable that the same be left to be adjudicated upon based on the evidence led by both sides at the trial. Petition dismissed.
Issues Involved:
1. Quashing of impugned notice framed under Section 251 of the CrPC. 2. Setting aside of summoning order under Section 138 of the NI Act. 3. Legally enforceable debt or liability under Section 138 of the NI Act. 4. Issuance and validity of security cheques. 5. Jurisdiction of High Court under Section 482 of the CrPC. Summary: 1. Quashing of Impugned Notice under Section 251 of the CrPC: The petitioners sought to quash the notice framed under Section 251 of the CrPC, arguing that the notice was erroneous and lacked reasons. The court found that the notice framed by the learned MM was based on the material on record and pre-summoning evidence, hence, it was not a non-speaking order. 2. Setting Aside of Summoning Order under Section 138 of the NI Act: The petitioners challenged the summoning order dated 26.08.2021, claiming that the cheques were issued as security and not towards any legally enforceable debt. The court held that the issuance of cheques was not disputed, and whether they were given as security or towards a legally enforceable debt is a matter of trial. 3. Legally Enforceable Debt or Liability: The court analyzed whether the cheques issued as security could be considered for discharge of a legally enforceable debt. It referred to multiple precedents, including Sripati Singh v. State of Jharkhand and Sunil Todi v. State of Gujarat, emphasizing that cheques given as security can attract Section 138 of the NI Act if the debt becomes due and payable. 4. Issuance and Validity of Security Cheques: The court discussed the nature of security cheques and their enforceability under Section 138 of the NI Act. It concluded that security cheques, once the debt becomes due, can be presented for encashment, and their dishonor can lead to criminal liability. 5. Jurisdiction of High Court under Section 482 of the CrPC: The court reiterated that the power under Section 482 of the CrPC should be exercised sparingly and with circumspection. It held that the factual disputes raised by the petitioners, including the nature of the cheques and the existence of debt, are matters to be adjudicated at trial and not in a petition under Section 482. Conclusion: The petition to quash the notice and summoning order was dismissed. The court emphasized that the presumption of the cheques being issued in discharge of liability must be given due weightage, and the burden of proving otherwise lies on the accused during the trial. The court found no merit in the petitioners' arguments to quash the proceedings at this stage.
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