2019 (3) TMI 1736 - HC - Indian Laws

Dishonor of Cheque - Assignment of the debt - it is submitted by petitioners that the cheques issued were in the nature of security cheques and not cheques in discharge of debt or other liability - HELD THAT - If the accused appears after service of summons, the learned Metropolitan Magistrate shall ask him to furnish bail bond to ensure his appearance during trial and ask him to take notice under Section 251 Cr.PC and enter his plea of defence and fix the case for defence evidence, unless an application is made by an accused under Section 145(2) of NI Act for recalling a witness for cross-examination on plea of defence. If there is an application u/s 145(2) of N.I. Act for recalling a witness of complainant, the court shall decide the same, otherwise, it shall proceed to take defence evidence on record and allow cross examination of defence witnesses by complainant. Once the summoning orders in all these cases have been issued, it is now the obligation of the accused to take notice under Section 251 of Cr. PC., if not already taken, and enter his/her plea of defence before the concerned Metropolitan Magistrate s Court and make an application, if they want to recall any witness. If they intend to prove their defence without recalling any complainant witness or any other witnesses, they should do so before the Court of Metropolitan Magistrate. The notice u/s 251 Cr.P.C has already been framed against the petitioners and the petitioners have pleaded not guilty and claimed trial. Upon analyzing the provisions of the NI Act, it is clear that Section 138 of the Act spells out the ingredients of the offence as well as the conditions required to be fulfilled before initiating the prosecution - These ingredients and conditions are to be satisfied mainly on the basis of documentary evidence, keeping in mind the presumptions under Sections 118 and 139 of the NI Act and Section 27 of the General Clauses Act, 1897 as well as the provisions of Section 146 of the Act. The parameters of the jurisdiction of the High Court, in exercising jurisdiction under Section 482 Cr.PC, are now almost well-settled. Although it has wide amplitude, but a great deal of caution is also required in its exercise. The requirement is, the application of well known legal principles involved in each and every matter. Adverting back to the facts of the present case, this Court does not find any material on record which can be stated to be of sterling and impeccable quality warranting invocation of the jurisdiction of this Court under Section 482 Cr.PC at this stage. More so, the defence as raised by the petitioners in the petition requires evidence, which cannot be appreciated, evaluated or adjudged in the proceedings under Section 482 of Cr.PC and the same can only be proved in the Court of law. Petition dismissed.

Summary

Issues Involved:
1. Whether the cheques issued by petitioner No. 1 are in the nature of security cheques?
2. Whether there exists a legally enforceable debt payable by petitioners to respondent in view of receivable purchases agreement entered between respondent and Citibank?
3. Whether the complaint under Section 138 of the NI Act filed by respondent was maintainable in view of assignment of debt by the respondent to Citibank?

Issue-Wise Detailed Analysis:

Issue 1: Whether the cheques issued by petitioner No. 1 are in the nature of security cheques?
The petitioners argued that the cheques issued were security cheques and not for discharging any debt or liability. They contended that there was no legally enforceable debt at the time of drawing the cheques. The respondent, however, countered that the cheques were not security cheques as the goods were delivered pursuant to the purchase order. According to the respondent, the purchase order stipulated that if two consecutive installments were not paid, the cheques could be deposited for debt recovery. The court observed that the nature of the cheques and the related facts are disputed issues that require evidence and cannot be adjudicated under Section 482 Cr.PC.

Issue 2: Whether there exists a legally enforceable debt payable by petitioners to respondent in view of receivable purchases agreement entered between respondent and Citibank?
The petitioners argued that due to the assignment of debt to Citibank, the respondent had no right to claim the amount, as mandated by the Factoring Regulation Act, 2011. The respondent, however, stated that the receivables were reassigned to them after the petitioner failed to make payments to Citibank, thus reinstating the debt obligation towards the respondent. The court noted that the existence of a legally enforceable debt is a factual issue requiring trial and cannot be resolved in a petition under Section 482 Cr.PC.

Issue 3: Whether the complaint under Section 138 of the NI Act filed by respondent was maintainable in view of assignment of debt by the respondent to Citibank?
The petitioners contended that the complaint under Section 138 NI Act was not maintainable due to the assignment of debt to Citibank. The respondent argued that the debt was reassigned to them after the petitioner defaulted on payments to Citibank, thus making the complaint maintainable. The court emphasized that the maintainability of the complaint involves disputed questions of fact and law that need to be addressed during the trial.

Conclusion:
The court concluded that the issues raised involve disputed questions of facts and law which require a trial for proper adjudication. It reiterated that the High Court, in exercise of its jurisdiction under Section 482 Cr.PC, cannot delve into the truthfulness of the allegations or disputed facts. The petition was dismissed, and the trial court was directed to consider and deal with the contentions and defense of the petitioner in accordance with law. The prayers in the petition were found untenable in law, leading to the dismissal of the petition and the related applications.