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2024 (3) TMI 222 - HC - Indian Laws


Issues Involved:
1. Quashing of Complaint under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881.
2. Maintainability of the Complaint based on the Agreement to Sell and Addendum.
3. Applicability of Section 138 of the NI Act and presumption under Section 139 of the NI Act.
4. Exercise of power under Section 482 of the Cr.P.C.

Summary:

Issue 1: Quashing of Complaint under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881

The petitioners sought quashing of the complaint filed by the respondent under Sections 138 and 142 of the NI Act, arguing that the cheque for Rs. 75,00,000/- was issued as security and not for a legally enforceable debt. The respondent alleged that the petitioners failed to discharge their liability, leading to the cheque's dishonor due to insufficient funds.

Issue 2: Maintainability of the Complaint based on the Agreement to Sell and Addendum

The petitioners contended that the complaint did not state that the respondent had to make any payment to its own debtors, which was a condition for the cheque's encashment. The respondent argued that the matter involved disputed facts best determined by the Trial Court. The court noted that the Agreement to Sell and Addendum required the petitioners to pay certain dues, failing which the respondent could encash the cheque.

Issue 3: Applicability of Section 138 of the NI Act and presumption under Section 139 of the NI Act

The court highlighted that for an offence under Section 138 of the NI Act, the cheque must represent a legally enforceable debt. The court observed that the complaint lacked averments that the respondent had to make payments due to the petitioners' default, thus no liability arose for the cheque's encashment. The presumption under Section 139 of the NI Act was negated by the Agreement to Sell and Addendum terms.

Issue 4: Exercise of power under Section 482 of the Cr.P.C.

The court emphasized that power under Section 482 of the Cr.P.C. should be exercised sparingly. However, if the complaint does not make out an offence, the power must be exercised to quash it. The court referred to precedents where complaints lacking necessary averments were quashed to prevent abuse of the process of the court.

Conclusion:

The court concluded that the complaint filed by the respondent lacked necessary averments to establish the petitioners' liability for which the cheque was issued. Thus, the ingredients of the offence under Section 138 of the NI Act were not satisfied. The petition was allowed, and the complaint was quashed. No order as to costs.

 

 

 

 

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