2021 (1) TMI 16 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - demand arising out of statutory notice, not paid - Acquittal of the accused - Section 138 of the Negotiable Instruments Act - HELD THAT - The trial court acquitted the accused in all the five cases. According to the trial court since one of the clause in the agreement says the consequence of the dishonour of the cheque, the offence under Section 138 of the Negotiable Instruments Act is not attracted. I cannot agree with the same - There cannot be an agreement against the statutory provision or an offence which is made out if the formalities in the Negotiable Instruments Act are complied. Therefore, according to me, the impugned judgments in these appeals are unsustainable. I do not want to make any further opinion in this case because I am remanding these five appeals to the lower court for fresh consideration in accordance to law. There is no representation for the accused in these cases. The matter remanded to the lower court to settle the matter or to defend the cases on any other point, if it is available - appeal allowed by way of remand.

Summary

Issues:
1. Appellant filed multiple appeals under Section 138 of the Negotiable Instruments Act against the same respondent for dishonoring cheques.
2. Trial court acquitted the accused based on an agreement between the parties.
3. Interpretation of the agreement's clauses regarding consequences of dishonored cheques.
4. Applicability of statutory provisions over contractual agreements in cases of dishonored cheques.
5. Decision to remand the cases for fresh consideration in accordance with the law.

Analysis:
1. The appellant filed multiple appeals under Section 138 of the Negotiable Instruments Act against the respondent for dishonoring cheques. The trial court acquitted the accused in all cases based on the interpretation of a specific agreement between the parties dated 30.5.2001, which detailed the consequences of dishonored cheques.

2. The trial court primarily relied on the clauses of the agreement, especially clause 7, which outlined the rights and consequences in case of default or dishonor of the cheques. The court concluded that since the agreement addressed the dishonor of cheques, the offense under Section 138 was not attracted, leading to the acquittal of the accused in all cases.

3. However, the appellate court disagreed with the trial court's interpretation. It emphasized that agreements cannot override statutory provisions or negate offenses established under the Negotiable Instruments Act. The court highlighted that compliance with the formalities of the Act is crucial, and agreements cannot be used to circumvent legal obligations.

4. The appellate court, therefore, set aside the trial court's judgments and remanded all five cases for fresh consideration in accordance with the law. The court stressed the importance of adhering to statutory provisions and providing the accused an opportunity to settle or defend the cases based on legal grounds.

5. The judgment allowed both parties to present all contentions before the lower court, emphasizing the need for a fair and lawful reconsideration of the cases. Additionally, the court permitted the parties to file transfer petitions for consolidation of the cases for efficient disposal by a single court.

Overall, the judgment highlighted the importance of upholding statutory provisions in cases involving dishonored cheques and ensuring a fair and legal process for all parties involved.