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2022 (11) TMI 558 - HC - Indian LawsDishonor of Cheque - legally enforceable debt or liability or not - rebuttal of presumption - section 138 and 139 of NI Act - HELD THAT - It is not in dispute that pursuant to the agreement dated 9.11.2017 (Annexure P-4) executed between partners of Firm M/s. Blue Diamond Associates including both the parties, subject cheque was issued by the petitioner in favour of respondent/complainant against transfer of their share in his favour, which was said to be dishonoured by the Bank and despite service of legal notice, amount of cheque was not paid by the petitioner, thus, all the necessary ingredients under Section 138 of the NI Act are attracted against the petitioner in the instant case. This court is not impressed at all with the submissions made hereinabove by learned counsel for the petitioner, as there was specific condition in the agreement dated 19.11.2017 that remaining amount i.e. Rs.2,62,00,000/- has to be paid by petitioner (party No. 2) to respondent (party No. 1) necessarily along with interest till 31.12.2019. It is also specifically mentioned in the agreement that if the amount was not paid within the stipulated period i.e. till 31.12.2019, then respondent/complainant (party No. 1) would have all the right to encash the cheques and it is also a matter of fact that since aforesaid amount i.e. Rs.2,62,00,000/- alongwith interest was not paid by petitioner (party No. 2) within the stipulated period and, thereafter, the cheque was deposited for encashment, which was dishonoured by the Bank, therefore, it cannot be said that since the cheque was given as security cheque, hence, offence under Section 138 of the NI Act is not attracted against the petitioner. In the case of Ripudaman Singh v. Balkrishna 2019 (3) TMI 1895 - SUPREME COURT , their Lordships of the Supreme Court have held that though agreement to sell does not create interest in immovable property, however it constitutes enforceable contract between parties, therefore, cheques issued under and in pursuance to agreement to sell is payment made in pursuance of legally enforceable debt or liability. In the instant case, objection/grounds raised by petitioner, registering the complaint case under Section 138 of the NI Act against him are grounds of his defence, which are required to be proved by him before the learned trial Court by adducing evidence. If those grounds are allowed to be entertained at this interlocutory stage, then it will amount to grant the petitioner/accused unmerited advantage. The petition under Section 482 of the Cr.P.C., being devoid of substance, is liable to be and is hereby dismissed.
Issues Involved:
1. Quashment of complaint case under Section 482 of Cr.P.C. 2. Applicability of Section 138 of the Negotiable Instruments Act, 1881. 3. Existence of enforceable debt or liability. 4. Cheque issued as security. 5. Reciprocal obligations under the agreement. 6. Scope of inherent powers under Section 482 of Cr.P.C. Issue-wise Detailed Analysis: 1. Quashment of Complaint Case under Section 482 of Cr.P.C. The petitioner sought to quash the complaint case filed under Section 200 read with Section 138 of the NI Act, arguing that the cheque in question was issued as security and there was no subsisting liability on the date of issuance. The court held that the grounds raised by the petitioner are matters of defense that need to be adjudicated during the trial. The petition under Section 482 of Cr.P.C. was dismissed as it was deemed inappropriate to quash the complaint at the pre-trial stage. 2. Applicability of Section 138 of the Negotiable Instruments Act, 1881 The court examined whether the necessary ingredients to attract Section 138 of the NI Act were present. It was established that the cheque was issued against the transfer of shares, was dishonored upon presentation, and the amount was not paid despite a legal notice. Therefore, all necessary ingredients under Section 138 of the NI Act were deemed to be present. 3. Existence of Enforceable Debt or Liability The petitioner argued that there was no enforceable debt or liability on the date of issuance of the cheque. However, the court noted that the agreement stipulated the payment of Rs.2,62,00,000/- by 31.12.2019, failing which the cheque could be encashed. Since the amount was not paid within the stipulated period, the cheque matured for encashment, establishing an enforceable liability. 4. Cheque Issued as Security The petitioner contended that the cheque was issued as security and not for the discharge of a debt. The court referred to multiple judgments, including *M/s. Womb Laboratories Pvt. Ltd. v. Vijay Ahuja* and *Sripati Singh v. State of Jharkhand*, which held that a cheque issued as security can still attract Section 138 if the conditions for its encashment are met. The court concluded that the cheque in question, although issued as security, matured for encashment due to non-payment of the stipulated amount, thus attracting Section 138. 5. Reciprocal Obligations under the Agreement The petitioner argued that the obligations were reciprocal and the respondent should refund the amount paid to reinstate their position as a partner. The court observed that the agreement's conditions required the payment of the remaining amount by a specific date, and failure to do so allowed the respondent to encash the cheque. The reciprocal nature of obligations did not absolve the petitioner from liability under Section 138. 6. Scope of Inherent Powers under Section 482 of Cr.P.C. The court emphasized that the scope of inherent powers under Section 482 of Cr.P.C. is limited and should not be used to quash complaints at the pre-trial stage unless the defense is of unimpeachable quality. The court cited *Rathish Babu Unnikrishnan v. State (Govt. of NCT of Delhi)*, highlighting that quashing proceedings at the preliminary stage can result in grave and irreparable consequences. The factual defenses raised by the petitioner were deemed triable issues to be decided by the trial court. Conclusion: The petition under Section 482 of Cr.P.C. was dismissed, with the court holding that the grounds raised by the petitioner were matters of defense to be adjudicated during the trial. The observations made in the order were specific to deciding the petition and did not influence the trial court's decision. There was no order as to costs.
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