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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 ..... unishable under Section 138 r/w Section 141 of Negotiable Instruments Act 1881. 3. The allegations common to both complaints and separately, in brief, are as follows: The respondent/complainant is a public limited company. 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 Rs. 6,09,108/-, Invoice No. NF 931141 dated 3.11.2014 for Rs. 2,90,343/-, Invoice No. NF 931142 dated 3.11.2014 for Rs. 8,76,100/- In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14, through the Corporation Bank, Anna Salai, Chennai. It was returned by a return memo dated 20.12.2014 with an endorsement 'funds insufficient'. It was again represented on 6.3.2015 and returned. 6. The cheques for Rs. 4,07,938/- Rs. 4,42,500/- and Rs. 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their post dated cheques with an undertaking to pay the money through RTGS. There are written communications between 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is breach of such condition then purchaser may have to make good the loss that might have occasioned to the 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 Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection with the existing liability, can be decided conclusively only from the oral and documentary evidence that have to be produced in this case. The reasons for the issuance of the cheques, alleged discharge of the liability are disputed facts are required to be decided only after recording the evidence. This Court cannot decide the disputed facts in this petition. Petitioners should participate in the trial of C.C. No. 6544 of 2015 to establish their claim. Therefore this Court finds that C.C. No. 6544 of 2015 cannot be quashed. 13. In the result, Crl. O.P. No. 23507 of 2016 is allowed, the proceedings against the petitioners in C.C. No. 6543 of 2015 is quashed and the Crl. O.P. No. 23508 of 2016 is dismissed. Consequently, connected mi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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