2022 (8) TMI 465 - HC - Indian Laws

Dishonor of Cheque - cheating or not - cheques in question have not even been issued by the petitioner company - misuse of letter heads of the petitioner company - agreement to sell with regard to flat - issuance of any cheque or not - legally enforceable debt or not - section 138 of NI Act - HELD THAT - The mandate under section 138 is clear. It is only to be invoked where a cheque has been drawn by a person for any amount of money in discharge of part or whole of any debt or liability, and that cheque remains unpaid on account of insufficient funds lying to the credit of the drawer of the cheque or if it exceeds the amount arranged to be paid from that account. In the present case, the petitioner company has not issued the cheques in question nor was there any debt or liability due from them. There has been no averment in the 138 complaint as regards to any debt owed by the petitioner to respondent no.2 - It is pertinent to note that the ingredients of Section 138 NI Act have not been fulfilled in the present case as the cheques in question have not even been issued by the petitioner company thereby not even meeting the first ingredient of the requirement u/s 138 Negotiable Instruments Act, 1881. The petitioner company is neither the drawer of the cheque nor is there any debt or liability shown against the petitioner-company. The petitioner company has sufficiently shown that they had no role in the case at hand and cannot thus be held liable for dishonour of a cheque which was not even issued by them or on their behalf in the first place. In these circumstances, where there are no ingredients made out against the petitioner-company, continuation of proceedings against them will be an abuse of the process of law. The fact that the revision petition had been filed and had been withdrawn will not come in the way of the inherent jurisdiction exercisable by this Court u/s 482 Cr.P.C. where the complaint itself fails to disclose the ingredients of section 138 Negotiable Instruments Act, being made out against the petitioner - Petition allowed.

Summary

Issues:
Petition seeking quashing of proceedings under Section 138 of Negotiable Instruments Act, 1881.

Analysis:
The petitioner sought to quash proceedings before the Court of Metropolitan Magistrate related to a complaint under Section 138 of the Negotiable Instruments Act, 1881. The dispute arose from an agreement to sell a flat between the complainant and another party, where the complainant made a payment to respondents 3 to 5 for the purchase. The respondent No. 2 alleged cheating, leading to the issuance of bounced cheques by respondent No. 4, triggering the complaint. The petitioner contended no privity of contract with respondent No. 2, denying issuing the cheques or receiving any payment. The respondent argued the petitioner's involvement based on a previous revision petition withdrawal. However, the court emphasized the clear mandate of Section 138, requiring a cheque issued for a debt or liability, which was absent in this case. The court highlighted the purpose of the section to penalize those issuing cheques without intent to discharge liabilities. Notably, the petitioner company did not issue the cheques, failing to meet the statutory requirements. Citing legal precedents, the court underscored the need to prevent abuse of legal processes and secure justice. Consequently, the court allowed the petition, setting aside the complaint and summoning order against the petitioner, clarifying the observations' limited scope in the present matter without affecting any separate FIR against the petitioner company or its officers.