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TMI Blog2022 (6) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... Magistrate No. II, Kumbakonam. 3. The respondent/complainant has filed a private complaint under Section 200 Cr.P.C., against the petitioner for the offence under Sections 138 r/w 142 of NI Act. 4. The case of the complainant is that the complainant is running a chemical factory in the name and style of Southern Organics Firm, that the petitioner/accused was a customer and she has purchased chemicals vide 7 invoices for a sum of Rs. 2,95,968/-, that the petitioner had paid a sum of Rs. 37,244/- for invoice No. 644, that she had also a paid a sum of Rs. 50,000/- through NEFT transactions and after deducting a sum of Rs. 12,756/- as per the previous accounts a sum of Rs. 2,58,724/- was due by the petitioner/accused, that the petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een the petitioner and the respondent and issuance and encashment of cheque through the petitioner's banker namely Canara Bank will show that the case of the respondent is not true and invented for the purpose of lodging the above complaint and that the complaint is liable to be quashed on the ground of material alteration of cheque which was given as security. 6. The learned counsel for the petitioner would further submit that the respondent is not having any legally enforceable debt as against the petitioner and that the above complaint has been lodged abusing the process of law. 7. It is pertinent to note, as rightly contended by the learned counsel for the respondent, that the petitioner/accused in his reply notice as well as in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent is liable to pay the commission amount claimed by the petitioner are the aspects that cannot be gone into, in the present petition. 12. Admittedly, the cheque was returned for the reason that the bank account was closed, but according to the petitioner, she has already informed the closing of the bank account with the City Union Bank Limited to the respondent, but that was disputed by the respondent. 13. As already pointed out, the petitioner has taken a stand that since the cheque was issued in the year 2016 and the same was allegedly presented in the year 2018, the same is barred by limitation, but according to the respondent, the cheque in dispute was given to the respondent only on 02.10.2018. 14. As rightly contended by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g one more figure '0' to make Rs. 30,000/- to Rs. 3,00,000/- and similarly adding one more figure '0' to make Rs. 40,000/- to Rs. 4,00,000/-." 17. But recently the Hon'ble Supreme Court in Sunil Todi and Others Vs. State of Gujarat and another in Crl. A. No. 1446 of 2021, dated 03.12.2021 has specifically held that merely labelling the cheque as a security would not obviate its character as an instrument designed to meet a legally enforceable debt or liability and the relevant passage is extracted hereunder: "30. The submission which has been urged on behalf of the appellants, however, is that the fact that the cheques in the present case have been issued as a security is not in dispute since it stands admitted from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. When a cheque is issued even though as 'security' the consequence flowing therefrom is also known to the drawer of the cheque and in the circumstance stated above if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option of initiating the civil proceedings for recovery or the criminal proceedings for punishment in the fact situation, but in any event, it is not or the drawer of the cheque to dictate terms with regard to the nature of litigation." 19. The above decisions are squarely applicable to the case on hand. 20. In the case on hand, as already pointed out, the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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