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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 ..... 0,000/- was paid by way of cash on 12.12.2016 to the said Global Media Works. As such a total sum of Rs. 1,10,00,000/- was borrowed by the Global Media Works represented by Vijaya Prakash. The further case in the complaint is that the said Vijay Prakash and Anand have paid a sum of Rs. 56,46,000/- and they failed to pay the balance amount. Subsequently, the petitioner along with Vijay Prakash and Anand paid further sum of Rs. 25,00,000/-. Later the petitioner has issued a post dated cheque dated 15.07.2017 in favour of the respondent for a sum of Rs. 28,54,000/-. When this cheque was presented, the same was dishonoured on the ground "payment stopped by the drawer". Subsequently, statutory notice was issued and a complaint has been filed by the respondent against the petitioner. 3.Mr.John Sathyan, learned Counsel appearing for the petitioner would submit that the respondent has not established 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 pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the respondent can proceed against the petitioner straight away without proceeding against the Principal Debtors on the ground that the petitioner stood as a guarantor for the repayment of loan by the Principal Debtors. 11.It will be useful to deal with the judgments cited by the learned Counsel appearing on either side. 12.The relevant portion of the judgment of the Bombay High Court in Kartik and another Vs HDFC Bank Ltd and another in Criminal Application No.4568 of 200, is extracted hereunder. "10. The loan agreement dated 22nd November 2005 between the complainant and the Company shows that the Company had undertaken to provide personal guarantee of Rajesh or a corporate guarantee of M/s Neelam India Pvt. Ltd. by way of additional security. Accordingly, Rajesh had issued a personal guarantee on 22nd November 2005. 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 Guar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any debt or liability and the complaint under Section 138 of the Negotiable Instruments Act, 1881, thus cannot be maintained. 9.As noticed hereinbefore, the principal reason for quashing of the proceeding as also the complaint by the High Court was by reason of the fact that Section 138 of the Act provides for issuance of a cheque to another person towards the discharge in whole or in part of any debt or liability and on the factual context, the High Court came to a conclusion that issuance of the cheque cannot be co-related for the purpose of discharging any debt or liability and as such complaint under Section 138 cannot be maintainable. 10.The language, however, has been rather specific as regards the intent of the legislature. The commencement of the Section stands with the words "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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or liability was determined or acknowledged to be payable. If cheques were issued in relation to a continuing contract or business where no claim is made on the date of the issue nor any determinate amount payable to the holder, one could perhaps argue that the cheques cannot be presented or prosecution launched on a unilateral claim of any debt or liability. The present is, however, a case where the existence of the debt/liability was never in dispute. It was on the contrary acknowledged and a promise was made to liquidate the same within one month. Failure on the part of the debtor to do so could lead to only one result, viz. presentation of the cheques for payment and in the event of dishonour, launch of prosecution as has indeed happened in the case at hand. 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 discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will repay the amount of Rs. 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. Even factually, this Court is of the considered view that on the day when the cheque was presented that is on 09.10.2017, there was existing liability insofar as the petitioner is concerned since the Principal Debtors failed to make payment of balance amount on or before 15.07.2017. As held by the Hon'ble Supreme Court, the language used under Section 138 of Negotiable Instruments Act, is so wide that law makers wanted to bring in "other type of liabilities" 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 libe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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