2024 (12) TMI 1012 - HC - Indian Laws

Challenge to order taking cognizance under Section 138 of the Negotiable Instruments Act, 1881 - rejection of petition seeking dismissal of the complaint case on the ground of pendency of a civil suit filed by the accused - quashment of the entire proceeding - rebuttal of presumption - HELD THAT - It is well settled that the presumption enables the holder of the cheque to show a prima-facie case and such presumption shall survive before the trial court only when the contrary not having proved to the effect that the cheques in question were not issued for a consideration or discharge of any existing or future debt or liability - In the case in hand, neither the signature nor the issuance of the cheque has been disputed. The entire defence as recorded hereinabove can be established or the plea taken can be established by adducing rebuttal evidence inasmuch accused can place reliance on the material adduced by the complainant to rebut that actual liability was not disclosed and it is vague. It is by now well settled that the accused can undoubtedly place reliance not only on the complaint s lacuna or material but can also adduce positive evidence and take his defence under Section 313 Cr.P.C. to rebut the presumption. The pendency of the civil case, with the allegation that the defective machines were delivered, that the complainant is not liable to pay in view of deficiency etc. can be matter of such defence of the accused. In the case in hand, this court does not find any of such prerequisite after going through the complaint. In the case in hand, this court is of the unhesitant view that the necessary factual foundation to take cognizance under Section 138 of the NI Act has been laid in the complaint. This court is also of the unhesitant opinion that merely for the reason that the detail of enforceable debt has not been stated in the complaint, the complaint cannot be quashed, more particularly, when a specific statement have been made at paragraph 4,5 and 6 as regards factum of purchase of mobile stone crusher equipments, issuance of cheque for discharge of legally enforceable liability, the amount of the cheque and the total amount of the alleged due. It cannot also be said that the complaint is bereft of even the basic facts, which are absolutely necessary for making an offence under Section 138 of the NI Act. This court finds no merit in this petition to persuade it to exercise its power under Section 482 Cr.P.C. to quash the proceeding of Complaint Case No. 208C/2016 under Section 138 of the NI Act - Accordingly, the present criminal petition stands dismissed.

Summary

Issues:
Challenge to order taking cognizance under Section 138 of the Negotiable Instruments Act, 1881 and dismissal of petition seeking quashment of the proceedings.

Analysis:

1. Lack of Disclosure of Legally Enforceable Due:
The petitioner argued that the complainant did not disclose the actual amount of legally enforceable debt, making it unclear if a case under Section 138 of NI Act is established. The petitioner contended that details regarding the total sale consideration, payments made, and the remaining amount were not provided, challenging the basis of the complaint.

2. Multiple Cheques and Lack of Specific Liability:
The case involved 11 cheques, and the petitioner highlighted the ambiguity in identifying which cheque corresponded to what liability. The petitioner emphasized the absence of clarity regarding the due amount against each machine, raising doubts about the legal basis for the complaint.

3. Legal Presumptions and Burden of Proof:
The respondent argued that the complaint clearly outlined the purchase of equipment, issuance of cheques against a legally enforceable debt, and subsequent dishonor. Referring to Section 139 of the NI Act, the respondent emphasized the presumption of discharge of liability through the cheques, placing the burden on the accused to rebut this presumption with conclusive or circumstantial evidence.

4. Judicial Interpretation and Defense Mechanisms:
The court acknowledged the essential conditions under Section 138 of the NI Act and the significance of the presumption under Section 139. It highlighted that the accused could challenge the complaint's factual assertions through evidence and defenses under Section 313 Cr.P.C., including aspects like pending civil cases and alleged deficiencies in goods delivered.

5. Court's Discretion and Abuse of Process:
The court clarified that the power to quash proceedings under Section 482 of Cr.P.C. is exercised in cases of abuse of court process, malice, absurd allegations, or lack of offense commission. In this case, the court found the complaint sufficiently established the factual foundation for invoking Section 138 of the NI Act, dismissing the petition for lack of merit.

Conclusion:
The court ruled against quashing the proceedings, emphasizing the sufficiency of the complaint's details to support the Section 138 case. It directed the Magistrate to continue with the case, highlighting that its observations were specific to this case and should not influence the trial court's decision.