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TMI Blog2018 (10) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court by relying upon the two expressions “any cheque” and “other liabilities'' has categorically held that the moment the cheque is issued in discharge of any debt or other lability, there cannot be any restriction or embargo in the matter of application of the provisions of Section 138 of Negotiable Instruments Act. The application of Sections 126 and 128 of the Contract Act will have no relevance in a case under Section 138 of Negotiable Instruments Act. In view of the judgment of the Supreme Court, it is clear that the respondent need not really wait for the Principal Debtor to repay and they can always proceed against the petitioner who, admittedly stood as guarantor and issued cheque as security. The undertaking dated 06.06.2017 clearly states that the Principal Debtors will repay the amount of ₹ 28,54,000/-. The moment the Principal Debtors fail to make payment, the liability of the petitioner as a guarantor will come into operation. Since the principal debtor did not make any payment, the respondent proceeded to deposit the cheque on 09.10.2017. This Court does not find any ground to quash the proceedings and the petitioner has to face the proceedings befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablished the existence and subsisting liability / enforceable debt against the petitioner and therefore complaint itself is liable to be quashed. The learned Counsel would further submit that the petitioner only stood as a guarantor and as per the recitals in Ex.P 2 and Ex.P 3, the liability was primarily on the above said Vijaya Prakash and Anand who had given cheque to the respondent and the petitioner gave assurance that if in case Vijaya Prakash and Anand did not pay the amount, the petitioner will take the responsibility and repay the amount and the petitioner gave his cheques only as a security. The learned Counsel would further submit that the entire complaint is silent with regard to the cheques given by Vijay Prakash and Anand and it is not known whether they had paid the balance amount to the respondent. Therefore, the learned counsel would submit the contingency to pay the balance amount will arise for the petitioner only if the above said Vijaya Prakash and Anand fail to make payment and till then, there is no subsisting lability/ legally enforceable debt insofar as the petitioner is concerned. 4.The learned Counsel relied upon a judgment of the Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Though not contemplated by the loan agreement, similar personal guarantees were also issued by Kartik and Neelam. The guarantees issued by the applicants are identically worded. Para 1 of the operative part of the deeds of guarantee is material and is quoted herein below: In consideration of the Bank having agreed to grant the said facility the Guarantor hereby irrevocably and unconditionally guarantee that the Borrower shall from time to time repay/ liquidate the facility to the Bank, together with interests and all other monies payable in respect thereof under the said Loan Agreement and shall perform and observe all terms and conditions of the said Loan Agreement and that in the event of the Borrower failing to pay or discharging his liability to the Bank the facility of ₹ 150 lacs or any part thereof together with interest and other monies in terms of the said Loan Agreement or committing or happening of any event of default as defined in the said Loan Agreement, the Guarantor shall on written demand by the Bank pay to the Bank without any demur and/or contestation and notwithstanding any dispute between the Bank and the Borrower and without going in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords Where any cheque . The above noted three words are of extreme significance, in particular, by reason of the user of the word any the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour 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 principal 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 lawmakers to the effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. The argument that the respondent had no liability to liquidate the debt owed by Nazimul Islam, has not impressed us. What is important is whether the cheques were supported by consideration. Besides the fact that there is a presumption that a negotiable instrument is supported by consideration there was no dispute that such a consideration existed in as much as the cheques were issued in connection with the discharge of the outstanding liability against Nazimul Islam. 15.The Bombay High Court has held in the judgment referred supra that the complainant has to make his claim with the Principals Debtors to begin with and only thereafter the guarantor's liability will come into play. In other words, unless the complainant has made a demand from the Principal Debtors, the liability of the guarantor will never crystallize and the liability was contingent upon the Principal Debtor not paying. By relying upon this judgment, the learned Counsel for the petitioner would submit that the same will apply to the facts of the present case. 16.It is important to take note of the judgment of the Hon'ble Supreme Court in this regard. The Hon'ble Supreme Court in IC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the purview of the provision the moment the cheque is supported by consideration. 19.In view of the above discussion, this Court does not find any ground to quash the proceedings and the petitioner has to face the proceedings before the Court below and raise all the defence available to him. It is made clear that the findings given in this order will have no bearing on the proceedings before the Court below and the petitioner is at liberty to raise all the contentions before the Court below and the Court below shall decide the case strictly on its own merits. 20.In the result the criminal original petition is dismissed. Consequently, CrlOP(MD)No.1845 of 2018 is closed. 21.At this stage, the learned counsel for the petitioner submitted that the presence of the petitioner before the Court below may be dispensed with for the reason that the petitioner is staying in USA and taking care of his son's treatment. 22.Accepting the said submission, the presence of the petitioner before the trial Court shall be dispensed with on condition that he shall be present at the time of questioning under Section 313 of Cr.P.C and at the time of passing judgment. On all the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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