2023 (8) TMI 1225 - HC - Indian Laws

Dishonour of Cheque - failure to consider that no liability arose in order to attract the impugned proceeding under Section 138 of the Negotiable Instruments Act - HELD THAT - In the present case, the cheque was issued towards the complainant s professional fees and the petitioner has admitted paying a sum of only Rs. 10,000/-. - the petitioner has not been able to rebut the presumption under Section 139 as admittedly professional fees was due to the complainant for discharge of his professional duty. The cheque was issued towards that liability of professional fees. Thus, considering the materials on record and in view of the discussions made, the judgment under revision being in accordance with law, needs no interference by this court - Revision application dismissed.

Summary

Issues Involved:
1. Validity of the conviction and sentence u/s 138/141 of the Negotiable Instruments Act, 1881.
2. Consideration of liability and professional negligence.
3. Validity of cheques issued as security.
4. Limitation period for filing the complaint.

Summary:

1. Validity of Conviction and Sentence u/s 138/141 of the Negotiable Instruments Act, 1881:
The revision was against the order dated 17.12.2019 by the Additional Sessions Judge, affirming the conviction and sentence by the Metropolitan Magistrate. The petitioners were convicted and sentenced to pay compensation of Rs. 50,000/- to the complainant, failing which they would face simple imprisonment for one month each.

2. Consideration of Liability and Professional Negligence:
The petitioners contended that no liability arose to attract proceedings u/s 138 of the Negotiable Instruments Act. They argued that the complainant, a Chartered Accountant, neglected professional duties, and the cheques were issued as security, not for discharging legal debts. They also highlighted that the complainant did not appear in tax-related matters, resulting in ex-parte orders against the petitioner.

3. Validity of Cheques Issued as Security:
The court noted that the cheques were issued as part of a settlement for professional fees. The Supreme Court in Sunil Todi & Ors. vs The State of Gujarat & Anr. held that a cheque issued as security could mature for presentation if the underlying obligation was not fulfilled. The court found that the cheques were issued towards the complainant's professional fees, and the petitioner failed to rebut the presumption u/s 139 of the Negotiable Instruments Act.

4. Limitation Period for Filing the Complaint:
The petitioners argued that the complaint was barred by limitation as it was filed two days late and no application u/s 142(b) of the Negotiable Instruments Act was filed for condonation of delay. The court, relying on M/s. Saketh India Ltd. vs M/s. India Securities Ltd., calculated the limitation period and found the complaint was filed within time, considering the holidays on 12.11.2011 and 13.11.2011.

Conclusion:
The court affirmed the judgment and order dated 17.12.2019, dismissing the criminal appeal and upholding the conviction and sentence. The revisional application was dismissed, and the petitioners were directed to comply with the sentence within a month, failing which they would serve the default sentence. All connected applications were disposed of, and the interim order was vacated.