2021 (5) TMI 971 - HC - Indian Laws

Dishonor of Cheque - disputed questions of fact are involved - case of applicant is that there was no legal dues to be paid to the complainant as the cheque was given only for the security purpose - legally enforceable debt or not - HELD THAT - Considering the facts of the present case, question of snatching possession of the Kvory plant from the applicant by threatening and beating him on 27.02.2020 by the complainant and the contents of the police complaint filed by the applicant-accused against the complainant and his son-in-law are disputed question of facts and they can only be considered after recording evidence by the prosecution/accused before the learned Trial court. Non producing the lease agreement executed between the parties and no legal debt of the complainant would be also a question of facts, which can be considered by the trial court that after recording evidence and examination/cross examination of the complainant. This is a case wherein the disputed questions of fact are involved. Under these circumstances, when there is disputed question of fact is involved and there is prima facie material showing that the cheques were issued by the accused to the complainant with his signature and there was monetary transaction between them, then in such case, inherent powers under Section 482 of the Code of Criminal Procedure cannot be exercised. This court is of the considered view that the High Court should not have interfered with the cognizance of the complaints having been taken by the trial court and High Court should not discharge the accused from his liability at the threshold. Unless the parties are given opportunity to lead evidence, it is not possible to come to a definite conclusion as to what was the date when the alleged possession of Kvory plant was handed over to him and while the police complaint was given against the complainant and his son-in-law and what was the lease agreement executed between the parties - Admittedly, cheque was under the signature of the present applicant given to the complainant. The purpose of alleged security, as argued by learned advocate for the applicant, can be decided before the trial Court on recording evidence. The present applicant is dismissed at the stage of admission without issuing any notice to the other side.

Summary

Issues Involved:
1. Quashing of the complaint under Section 138 of the Negotiable Instruments Act, 1881.
2. Legality of the cheque issued as "security".
3. Disputed facts regarding the lease agreement and possession of Kvory plant.

Detailed Analysis:

1. Quashing of the Complaint under Section 138 of the NI Act:
The applicant sought to quash the complaint filed under Section 138 of the NI Act, arguing that the cheque in question was issued only as security and not for the discharge of any debt or liability. The court, however, emphasized that the question of whether a cheque represents a discharge of an existing enforceable debt or liability is a matter of fact that needs to be determined during the trial. The court cited several precedents, including Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited and Indus Airways Private Limited v. Magnum Aviation Private Limited, to highlight that the nature of the transaction determines the applicability of Section 138.

2. Legality of the Cheque Issued as "Security":
The applicant argued that the cheque was given only for security purposes and not for the discharge of any debt. The court referred to the judgment in Sampelly Satyanarayana Rao, where it was held that if on the date of the cheque, the liability or debt exists or the amount has become legally recoverable, Section 138 is attracted. The court noted that whether the cheque was issued as security or for the discharge of a debt is a factual question that should be resolved during the trial.

3. Disputed Facts Regarding the Lease Agreement and Possession of Kvory Plant:
The applicant raised several factual disputes, including the non-production of the lease agreement, the alleged snatching of possession of the Kvory plant, and the claim of incurred expenses and losses. The court held that these are disputed questions of fact that can only be resolved through evidence presented during the trial. The court emphasized that it is not appropriate to quash the complaint under Section 482 of the CrPC based on disputed facts that require thorough examination during the trial.

Conclusion:
The court dismissed the application to quash the complaint under Section 138 of the NI Act, emphasizing that the issues raised by the applicant involve disputed questions of fact that need to be resolved during the trial. The court reiterated that the High Court should not interfere with the cognizance of the complaints taken by the trial court and that the applicant is at liberty to raise all available contentions before the trial court. The court did not delve into the merits of the matter but focused on the aspect of its entertainability for quashing the complaint.