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TMI Blog2007 (11) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... part of debt was not owing and due to the complainant by the accused and only because he has issued a cheque for a higher amount, he would be convicted if it is held that existence of debt in respect of large part of the said amount has not been proved. The Appellant clearly said that nothing is due and the cheque was issued by way of security. The said defense has been accepted as probable. If the defense is acceptable as probable the cheque therfore cannot be held to have been issued on discharge of the debt as, for example, if a cheque is issued for security or any other purpose the same would not come within the purview of Section 138 of the Act. The afore-noted observations are emphasised are clarificatory in nature. Thus, no ground for quashing the complaint or the summoning order dated 23.9.2002 is made out. - HON'BLE PRADEEP NANDRAJOG, J. For the Appellant : Sidharth Luthra, Sr. Adv., P.K. Dubey and Arundhati, Advs For the Respondent : None JUDGMENT Pradeep Nandrajog, J. 1. The issue which has arisen for consideration in the present petition under Section 482 of the Code of Criminal Procedure, 1973 is the scope and ambit of the expression other liability occurring in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onoured for any reason, the Builder shall replace the cheque with a demand draft within 7 days of the receipt of an intimation from the owners failing which the owners shall be entitled to take recourse to any right or remedy available to or accruing to the owners by such dishonour. (c) The said deposit shall not carry any interest and shall be refunded by the owners to the Builder upon the Builder delivering to the owners the possession of their areas in the Building. (d) That upon failure of the owners to refund the Security deposit the Builder shall have full authority and power to adjust the same by reduction of the allocation of the area of the owners calculated on price prevalent and mutually acceptable as on the date of such default. (e) That till the refund/adjustment of the entire security deposit in the manner stated above the Builder shall have a lien over 50% out of the owners' areas in the Building and the owners shall not sell/transfer/lease or deal with the same till the deposit is refunded to the Builder or recovered by the Builder by making adjustment out of the owners' share. Delay in such refund will attract compound interest @ 18% per annum from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement, it is clear that cheques in question were neither issued towards discharge of a debt nor because accused company owed any money to the complainant. Counsel further relied upon judgment of the Supreme Court in the decision reported as Narayana Menon v. State of Kerala in support of his contention that where a cheque is given only as a security, the provisions of Section 138 of the N.I. Act are not at all attracted. 15. Unfortunately, no assistance has been rendered to this Court by the complainant. 16. Relevant part of Section 138 of the N.I. Act reads as under: 138. Dishonour of cheque for insufficiency, etc., of funds in the account Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from the account by an agreement made with the bank, such person shall be deemed to have committed an offence and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favor of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment. 11. The issue as regards the co-extensive liability of the guarantor and the principle debtor, in our view, is totally out of the purview of Section 138 of the Act, neither the same calls for any discussion therein. The language of the Statute depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favor of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inate and claim damages, whatever the gravity of the breach. 4. It is possible by express provision in the contract to make a term a condition, even if it would not be so in the absence of such a provision. 27. Thus an obligation which is a condition, if breached, hits at the root of the contract and by contract it is open for the parties to make a term a condition which otherwise under ordinary circumstances it may not be. 28. In this regards, it is essential to note Clause V(b) of the agreement which stipulates that the payment of cheques on due dates is the essence of the contract. It reads as under: (b) Payment of the said cheques on the due dates is the essence of the contract. In the event any cheque is dishonoured for any reason, the Builder shall replace the cheque with a demand draft within 7 days of the receipt of an intimation from the owners failing which the owners shall be entitled to take recourse to any right or remedy available to or accruing to the owners by such dishonour. 29. Under the agreement, the accused company had a liability to pay ₹ 138 lakhs to the complainant and other owner of the said property and discharge of this liability was treated fundame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of money or money in lieu of goods or service. Any benefit or detriment of some value can be a consideration. 37. In the instant case, the complainant and the other owner of the said property blocked their asset (property) till the period of completion of construction as provided in the agreement. The promise/act of the complainant and other owner of the said property of blocking their asset for a considerable period can very well be held to be a consideration within the meaning of Section 2(d) of the Indian Contract Act. Thus all reciprocal obligations of the builder would also be a consideration for the contract. 38. In the decision reported as Narayana Menon v. State of Kerala relied upon by the counsel for the petitioners, the Supreme Court was considering the nature and extent of statutory presumption provided under Section 118(a) and 139 of the N.I. Act. The observations relied upon the counsel reads as under: 57. We in the facts and circumstances of this case need not go into the question as to whether even if the prosecution fails to prove that a large portion of the amount claimed to be part of debt was not owing and due to the complainant by the accused and only becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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