2021 (8) TMI 619 - HC - Indian Laws

Dishonor of Cheque - Validity of Summon Order passed by the Additional Court - grounds necessary for taking cognizable as provided under Section 142 of N.I. Act has not been established by the complainant - it is alleged that the trial court has not considered this fact that post dated cheque has been collected by the Finance Company and the same has become time barred - willingness to compound the case - HELD THAT - Having regard to the provision of Section 139 and 140 of the N.I. Act the defence that cheque was post dated and was not issued in lieu of legally enforceable debt is not available to the applicant and for the sake of argument if it is presumed that he is having any such defence the same could only be taken during the course of trial which has not been started yet. Willingness to compound the case - HELD THAT - It has been specifically provided under Section 147 of the N.I. Act that the offence punishable under this Act (Negotiable Instruments Act 1988) shall be compoundable. Petition disposed off.

Summary

Issues:
1. Quashing of summoning order under Section 138 of Negotiable Instruments Act.
2. Consideration of defence regarding post-dated cheque.
3. Compounding of offences under Section 147 of the N.I. Act.

Analysis:
1. The applicant sought to quash the summoning order dated 23.12.2020, passed by the Additional Court in a complaint case under Section 138 of the Negotiable Instruments Act. The applicant's counsel argued that the trial court erred in issuing the summoning order without establishing the necessary grounds under Section 142 of the N.I. Act. It was contended that since the post-dated cheque had been collected by the Finance Company and had become time-barred, no summoning order should have been issued. The applicant expressed readiness to compound the offences.

2. The learned AGA opposed the applicant's defence that the cheque was post-dated, citing Sections 138 and 140 of the N.I. Act. The court noted the applicant's grievance that the complaint was filed falsely as previous cheques issued by him had become time-barred. However, the court emphasized that under Sections 139 and 140 of the N.I. Act, the defence of a post-dated cheque not issued for a legally enforceable debt is not permissible. The court clarified that any such defence could only be raised during the trial, which had not commenced yet.

3. Regarding the compounding of offences, the court referred to Section 147 of the N.I. Act, which allows for the compoundability of offences under the Act. The court directed the trial court to consider an application for compounding the offence if filed by the applicant within ten days. The court also instructed that the trial court should follow the legal principles laid down by the Supreme Court in the case of Damodar S Prabhu Vs. Syed Baba Lal H. Until the expiration of the specified ten-day period, the applicant was protected from arrest under any coercive process issued by the trial court in the case under consideration.