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TMI Blog2010 (2) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... pay amount from time to time by installments. Accordingly, cheque No. 500276 of Rs. 87,209/- drawn on Ahmednagar Merchants Co-operative Bank Ltd., Branch - Dalmandai, Ahmednagar, was issued. The cheque was dated 24.01.2008. When the complainant/applicant presented the cheque, it was dishonoured on the ground of insufficiency of funds. Thereafter, on 11.02.2008 a notice was issued by the complainant/applicant, but inspite of the same, the amount was not paid by the respondent and therefore the complaint was filed. 3. The learned Magistrate after considering the evidence led by both sides, passed the order of acquittal acquitting the respondent of offence punishable under Section 138 of the Negotiable Instruments Act, mainly on three grounds. Firstly, it is held that as many as ten blank cheques were obtained by the applicant bank while sanctioning/disbursing loan as security and one of them was used in the present case; secondly, there is bar of limitation; and thirdly, amounts paid by the respondent, in respect of which he has produced receipts in defence, were not reflected in the extract of account produced on record and as such it is not proved that the amount of Rs. 89,209/-wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent that the respondent had issued 10 blank cheques signed by him to the complainant in the year 2000 while sanctioning the loan. 6. The learned advocate Shri Pallod argued that even accepting that this to be so, still it will not affect the case of the complainant. He relied upon the case of Purushottam Maniklal Gandhi v. Manohar K. Deshmukh 2007 (2) Bom.C.R. (Cri) 38. In that case Single Bench of this Court has observed in para 18 that it is open to a person to sign and deliver a blank or incomplete cheque and it is equally open for the holder to fill up blanks and specify the amount therein. This does not amount to any alteration in the cheque, since the cheque was not initially issued for any different specified sum which was changed. In para 19 of the said case it is observed that when a drawer of a cheque delivers a signed cheque, he obviously gives an authority to the holder to put a date of his choice. So, it is argued that merely because blank cheques were given by the respondent to the complainant, that does not mean that said cheques are not valid. Moreover, so far as limitation is concerned, in the same case it is observed that limitation would start from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. Explanation - For the purposes of this section, 'debt or other liability' means a legally enforceable debt or other liability. 9. It is argued that the cheque drawn must be for the discharge, in whole or in part, of any debt or other liability. So the debt or other liability must be in existence when the cheque, whether blank or post dated was issued. In this case the accused-respondent issued the cheque in question as security for loan before loan amount was disbursed. So, cheque was not towards any existing debt or liability. In case of loan transaction, borrower is in need of money and therefore he borrows loan amount from some one with understanding that the loan amount would be repaid in lumpsum on a future date or in installments from particular future date onwards periodically, with or without interest. It is not transaction of loan, if the amount is to be repaid th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and smooth functioning of business transaction in particular, use of cheques as negotiable instruments would primarily depend upon the integrity and honesty of the parties. It was noticed that cheques used to be issued as a device inter alia for defrauding the creditors and stalling the payments. Dishonour of cheque by the bank causes incalculable loss, injury and inconvenience to the payee and the entire credibility of the business transactions within and outside the country suffers a serious set back. Remedy available in a Civil Court is a long drawn process and an unscrupulous drawer normally takes various pleas to defeat the genuine claim of the payee. 13. In Electronics Trade & Technology Development Corporation Ltd. v. Indian Technologists & Engineers (Electronics)(P) Ltd. (1996) 2 SCC 739 it is observed that if we consider the provisions of Sections 138 -147 and their object, it is clear that object of Section 138 is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments. Despite civil remedy, Section 138 intended to prevent dishonesty on the part of drawer of negotiable instrument to draw cheque without su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) 3073 : 2008 (3) B.C. 98. 6) Jayantilal Parmar v. Vaishali Farne (2007) 2 Bom.C.R. (Cri) 403. 7) Om Shri Finance & Investment Corporation v. Mohemmed Sheikh (2007) 11 LJSOFT (URC) 24. 16. In Anand Urban Co-operative Credit Society v. Vipin Mehta 2008 (2) Bom.C.R. (Cri) 65, trial court held that 5 blank cheques were obtained towards security for repayment of loan as in this case. This Court refused to interfere with the order of acquittal. 17. In Karekar Finance Pvt. Ltd. v. Shri M.N. Bashyam and Anr. 2007 ALL MR (Cri) 3073, it is held that though the accused had taken loan from the complainant, he proved that the blank cheque was issued by him towards collateral security for loan and interest. It is held that the cheque cannot be said to be issued towards discharge of a debt and same would not come under purview of Section 138 of the Negotiable Instruments Act. 18. Similarly, in the case of Jayantilal Parmar v. Vaishali Farne (2007) 2 Bom.C.R. (Cri) 403, three blank cheques were given as security for loan amount. Two cheques were encashed and third was bounced. The Single Bench of this Court refused to interfere with the order of acquittal. Facts of said case are similar t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of cheque amount of Rs. 87,209/- was outstanding and therefore provisions of Section 138 of the Negotiable Instruments Act are not attracted. We cannot find fault with this ground for acquittal. 24. Here I may rely on Pawan Enterprises v. Satish H. Verma 2003 Bom.C.R. (Cri). 474, In that case a colour T.V. was purchased on 4th April, 1998 by the respondent from the applicant for total consideration of Rs. 22,760/-. Rs. 5000/- were paid in cash and post dated cheque of Rs. 17,745/- was issued on 08.01.1998. The respondent was supposed to pay balance amount in installment or in accordance with post dated cheque. When the cheque was presented on 19.01.1998 what was due was only Rs. 10,975/-, though on 08.01.1998, the date of issuing post dated cheque for Rs. 17,745/- was due. It was held that the cheque issued was for much higher amount than was actually due and therefore it cannot be said that the cheque was issued towards debt or other liability within the meaning of Section 139, and offence under Section 138 of the Negotiable Instruments Act is not committed. In said case the Court distinguished between 'liability' and 'security' and observed that both canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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