2017 (3) TMI 1006 - HC - Indian Laws

Offence punishable under Section 138 Negotiable Instruments Act - Held that - In the present case neither was there any endorsement on the cheque nor a document annexed thereto. Letter dated 21st March, 2016 was given separately and thus the change of character of the document was not capable of being intimated to the third party who may have been a holder in due course. Hence the letter dated 21st March, 2016 did not change the character of the cheque in question to a non-negotiable instrument. Since the present petition is under Section 482 Cr.P.C. and the parties are yet to lead their evidence it is not open for this Court to draw any conclusion on the issue between the two parties as to whether the signatures of Ankur Gupta on the letter in question were only in acceptance of the letter or it would be deemed that he had accepted the contents of the letter in question as well. This is an issue to be determined during trial. Thus the argument of the learned counsel for the Strategic that the letter in question has to be read as it is and no oral evidence can be led to give a meaning to it also deserves to be rejected. Since a presumption arises under Section 139 of the NI Act with regard to the liability once a cheque has been issued which presumption has to be rebutted during the course of trial at this stage it is not for this Court to come to a conclusion in exercise of its jurisdiction under Section 482 Cr.P.C. that since no reply was given to the letter in question by Religare its contents are deemed to be admitted. In view of the discussion aforesaid this Court finds no reason to quash the complaint or set aside the order summoning the petitioners.

Summary

Issues Involved:
1. Maintainability of the complaint due to authorization.
2. Existence of debt or liability at the time of issuance of the cheque.
3. Nature of the cheque as a negotiable instrument.
4. Interpretation of the letter dated 21st March, 2016.
5. Presumption under Section 139 of the NI Act.

Detailed Analysis:

1. Maintainability of the Complaint:
The petitioners argued that the complaint was not filed by a duly authorized person. They relied on the Supreme Court decision in A.C. Narayan Vs. State of Maharashtra & Anr., which mandates that a criminal complaint must be filed by an employee duly authorized by a resolution of the company and that the employee must have personal knowledge of the facts. However, the court noted that the complaint explicitly stated that Ankur Gupta was the authorized signatory on behalf of the complainant, supported by a Board Resolution/Power of Attorney dated 7th July, 2016. The court also referenced the Supreme Court decision in Haryana State Cooperative Supply and Marketing Federation Limited Vs. Jayam Textiles and Anr., which allows for correction of any error in the authority to swear or affirm the facts. Thus, the objection regarding the complaint's maintainability was rejected.

2. Existence of Debt or Liability:
The petitioners contended that no debt or liability existed when the cheque was issued due to the validity of the Standby Letter of Credit (SBLC) until 22nd June, 2016. They cited Indus Airways Private Limited & Ors. Vs. Magnum Aviation Private Limited & Anr. to support their claim. However, the court emphasized that the SBLC was a guarantee and not a discharge of liability. Clause 2.3(c) of the Assignment Agreement allowed Religare to invoke the SBLC if Strategic failed to pay the outstanding balance. Therefore, the court held that the complaint was maintainable, rejecting the argument that there was no existing liability.

3. Nature of the Cheque as a Negotiable Instrument:
The petitioners argued that the cheque was a non-negotiable instrument based on the letter dated 21st March, 2016. They referenced Sections 13 and 130 of the NI Act and cited M. Ethirajulu vs. Rangam Adinarayana and Others, and Hibernian Bank Limited vs. Gysin & Hanson. However, the court noted that the letter was separate and not annexed to the cheque, meaning it did not change the cheque's character to a non-negotiable instrument. The court concluded that the letter did not affect the cheque's negotiability.

4. Interpretation of the Letter Dated 21st March, 2016:
The letter dated 21st March, 2016 was central to the arguments, with the petitioners claiming it made the cheque conditional. The court stated that the issue of whether the signatures of Ankur Gupta on the letter were an acknowledgment of receipt or acceptance of its terms was a matter for trial. The court rejected the argument that the letter should be read as it is without oral evidence, emphasizing that this determination must occur during the trial.

5. Presumption under Section 139 of the NI Act:
The court reiterated that once a cheque is issued, a presumption of liability arises under Section 139 of the NI Act. This presumption can only be rebutted during the trial. The court cited Hiten P. Dalal Vs. Bratindranath Banerjee, which states that the presumption places the evidential burden on the accused to prove that the cheque was not issued for discharging any liability. The court also referenced Goa Plast Pvt. Ltd. vs. Chico Ursula D’Souza, which held that there is no obligation to reply to a letter under the scheme of Section 138 of the NI Act.

Conclusion:
The court found no reason to quash the complaint or set aside the summoning order. The petition and application were dismissed, and the issues raised by the petitioners were deemed matters to be determined during the trial.