2020 (3) TMI 984 - HC - Indian Laws

Dishonor of Cheque - contention that the disputed cheques were not dishonoured for insufficiency of fund rather the payment of above cheques were got stopped as per the instructions of the applicant and in cases of stop payment, the provisions of 138 of the Negotiable Instruments Act do not apply - applicability of section 138 of NI Act - HELD THAT - The contentions raised by applicant are required to be decided upon evidence to be led by parties before the trial court and at this stage merely for the reason that the applicant got the payment stopped it will not be just and appropriate to discharge the applicant. There is no illegality, irregularity, incorrectness or impropriety in the impugned order or any sufficient ground for quashing it and learned counsel for the applicant has failed to show that there is any abuse of process of court or likelihood of miscarriage of justice for prevention of which the exercise of inherent powers by this Court is required. The application is devoid of merits and is liable to be dismissed. Application dismissed.

Issues:
1. Quashing of the impugned order in a complaint case under Section 138 of the Negotiable Instruments Act.
2. Application under Section 482 Cr.P.C. seeking quashing of summoning order.
3. Legal implications of stopping payment on disputed cheques.
4. Interpretation of legal precedents regarding Section 138 of the Negotiable Instruments Act.
5. Abuse of process of court and likelihood of miscarriage of justice.

Analysis:
1. The applicant filed an application under Section 482 Cr.P.C. to quash the impugned order dated 07.06.2018 in a complaint case under Section 138 of the Negotiable Instruments Act. The applicant argued that the disputed cheques were not dishonored due to insufficient funds but because the payment was stopped as per the applicant's instructions. The applicant contended that in cases of stop payment, Section 138 of the Act does not apply. Citing legal precedents, the applicant argued that stopping payment does not constitute an offense under Section 138. However, the court held that the contentions raised by the applicant need to be decided based on evidence to be presented before the trial court. The court found no grounds to quash the impugned order, stating that it is premature to discharge the applicant solely based on stopping the payment.

2. The applicant sought the quashing of the summoning order in the complaint case under Section 138 of the Negotiable Instruments Act. The applicant's objection to the summoning order was rejected by the Magistrate, leading to the filing of the application under Section 482 Cr.P.C. The court noted that the objections raised by the applicant should be determined during the trial proceedings and that it would not be just to discharge the applicant solely based on the stopping of payment at this stage. The court dismissed the application under Section 482 Cr.P.C., emphasizing the need for the trial court to adjudicate the matter expeditiously.

3. The legal implications of stopping payment on disputed cheques were a crucial aspect of the case. The applicant argued that since the cheques were issued as security and the payment was stopped based on the applicant's instructions, no offense under Section 138 of the Negotiable Instruments Act was made out. However, the court held that the determination of whether the cheques were given as security or if there was any outstanding liability should be decided by the trial court after recording evidence from both parties. The court emphasized that the issue of stopping payment could only be conclusively resolved during the trial proceedings.

4. The interpretation of legal precedents regarding Section 138 of the Negotiable Instruments Act played a significant role in the case. The applicant relied on judgments to support the argument that stopping payment does not constitute an offense under Section 138. However, the opposing parties contended that the facts of the cited cases were not applicable to the present case. The court noted that the legal contentions and precedents cited by the applicant would need to be examined during the trial proceedings to determine their applicability and relevance to the case at hand.

5. The issue of abuse of process of court and the likelihood of miscarriage of justice was raised during the proceedings. The opposing parties argued that the applicant was abusing the court process by repeatedly approaching the court and delaying the proceedings. However, the court found no sufficient grounds to quash the impugned order or discharge the applicant based on the arguments presented. The court directed the trial court to expedite the disposal of the complaint case in accordance with the law, emphasizing the need for a fair and expeditious resolution of the matter.

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