2024 (1) TMI 507 - SC - Indian Laws

Dishonour of Cheque - no factual basis to show existing debt or liability - absence of necessary averments in the complaint regarding the nature of transaction between the parties - HELD THAT - All that a complaint under Section 138 of N.I. Act requires to contain is such factual averments as are necessary to satisfy the ingredients of the said provision, namely, that the cheque/money bill which has been dishonoured was issued to discharge full or partial pre-existing debt liability. It is not be the pre-requisite of Section 138 of the N.I. Act to plead evidence in the complaint itself. Once a specific plea has been taken, it can be later on substantiated by adducing evidence at an appropriate stage. On a reading of paragraph 3 of the complaint, the appellant has made the necessary averments in order to prima facie attract the consequences under provisions of the N.I. Act. The High Court, thus, fell in error in misconstruing the averments made in the complaint(s). The impugned order dated 17.07.2019 of the High Court is set aside and all the five complaints filed by the appellant against the respondents under Sections 138, 141 and 142 of the Negotiable Instrument (Amendment Miscellaneous Provisions) Act, 2002 read with Section 420 of the Indian Penal Code 1860, are restored to their original numbers and files - Appeal allowed.

Summary

Issues involved:
The judgment addresses the quashing of complaints under Section 138 of the Negotiable Instruments Act, 1881 by the High Court of Delhi due to the absence of necessary averments regarding the nature of transactions between the parties.

Details of the Judgment:

Issue 1: Quashing of complaints under Section 138 of the N.I. Act
The Supreme Court reviewed the High Court's decision to quash the complaints solely based on the lack of factual basis to show existing debt or liability. The complaints were similarly worded, and the High Court held that without necessary averments about the nature of the transaction, the proceedings under Section 138 of the N.I. Act should be quashed.

Issue 2: Sufficiency of averments in the complaint
The appellant's senior counsel referred to paragraph 3 of the complaint, which detailed substantial business transactions between the parties and the issuance of cheques in discharge of part liability. The Supreme Court noted that the complaints contained the necessary averments to satisfy the ingredients of Section 138 of the N.I. Act, which require mentioning that the dishonored cheque was issued to discharge full or partial pre-existing debt liability. The court emphasized that evidence does not need to be pleaded in the complaint itself, as it can be substantiated later.

Conclusion:
The Supreme Court allowed the appeals, setting aside the High Court's order and restoring the five complaints against the respondents under relevant sections of the law. The court directed the Chief Metropolitan Magistrate to proceed with the complaints in accordance with the law, emphasizing the importance of including necessary averments in complaints under Section 138 of the N.I. Act.