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TMI Blog2022 (4) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of the goods. The e-mail correspondence from the petitioners to the respondent dated 12.02.2015 shows that the respondent undertook to return the cheques for which payment had been already made through RTGS. With regard to the impugned four cheques, it was mentioned in the e-mail that the cheque nos. 798097, 804836, 804584 and 804657 would be returned once RTGS transfer is made. This E-mail was sent on 12.02.2015, even before the statutory notice was sent on 24.03.2015. It reinforces the claim of the petitioners that the cheques concerned in this cases had been given as a security for ensuring the payments due in the business transaction from the petitioners. In the case before hand, it is not the case of the petitioners that the cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any. The first petitioner is a private limited company. The second petitioner is its Managing Director, the third and the fourth petitioners are its Directors. The petitioners 2 to 4 are in control and management of the day today affairs of the first petitioner company. The respondent/complainant entered into a contract for supply of cotton fabric vide invoice No. NF 931140 dated 3.11.2014 for ₹ 6,09,108/-, Invoice No. NF 931141 dated 3.11.2014 for ₹ 2,90,343/-, Invoice No. NF 931142 dated 3.11.2014 for ₹ 8,76,100/- Invoice No. NF 931438 dated 7.11.2014 for ₹ 1,00,729/-, Invoice No. NF 937712 dated 28.1.2015 for ₹ 4,12,750/-, Invoice No. NR 935005 dated 24.12.2014 for ₹ 4,42,500/-, Invoice No. NR 934440 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cient'. It was again represented on 6.3.2015 and returned. 6. The cheques for ₹ 4,07,938/- ₹ 4,42,500/- and ₹ 2,00,432/- were presented for collection on 10.03.2015, 02.03.2015 and on 26.01.2015 respectively, through the Corporation Bank, Anna Salai, Chennai and were returned on 11.03.2015, 07.03.2015 and 07.03.2015 respectively, with an endorsement 'funds insufficient'. 7. A statutory notice was issued on 24.03.2015 demanding the payment of cheque amounts within a period of 15 days from the receipt of the notice. The notice was received by the petitioners. The petitioners have not paid the amount. Therefore the complaints. 8. The learned counsel for the petitioners submitted that after the receipt of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the petitioners and the respondent in this regard. The petitioners had paid the cheque amounts covered by three cheques in C.C. No. 6544 of 2015 with the other amounts payable to the respondent on 08.04.2015, 07.05.2015 and 08.07.2015. There is no amount payable to the respondent. 10. A perusal of the documents filed by the petitioners in support of their case shows that the amounts aforestated had been paid by the petitioners and they are reflected in the accounts statement of the respondent. The purchase order dated 13.11.2014 shows that the post dated cheques were issued by the petitioners to the respondent, obviously as a security for the supply of the goods. The e-mail correspondence from the petitioners to the respondent dated 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seller but that does not create a criminal liability under Section 138. For a criminal liability to be made out under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. We are unable to accept the view of the Delhi High Court that the issuance of cheque towards advance payment at the time of signing such contract has to be considered as subsisting liability and dishonour of such cheque amounts to an offence under Section 138 of the N.I. Act. The Delhi High Court has traveled beyond the scope of Section 138 of the N.I. Act by holding that the purpose of enacting Section 138 of the N.I. Act would stand defeated if after placing orders and giving advance payments, the instr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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