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TMI Blog2022 (11) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... ment that if the amount was not paid within the stipulated period i.e. till 31.12.2019, then respondent/complainant (party No. 1) would have all the right to encash the cheques and it is also a matter of fact that since aforesaid amount i.e. Rs.2,62,00,000/- alongwith interest was not paid by petitioner (party No. 2) within the stipulated period and, thereafter, the cheque was deposited for encashment, which was dishonoured by the Bank, therefore, it cannot be said that since the cheque was given as security cheque, hence, offence under Section 138 of the NI Act is not attracted against the petitioner. In the case of Ripudaman Singh v. Balkrishna [ 2019 (3) TMI 1895 - SUPREME COURT] , their Lordships of the Supreme Court have held that though agreement to sell does not create interest in immovable property, however it constitutes enforceable contract between parties, therefore, cheques issued under and in pursuance to agreement to sell is payment made in pursuance of legally enforceable debt or liability. In the instant case, objection/grounds raised by petitioner, registering the complaint case under Section 138 of the NI Act against him are grounds of his defence, which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of agreement executed between the parties/partners but a bare perusal of the agreement makes it clear, that obligation of both the parties were reciprocal in nature, as the obligation of one was depended upon the obligation of other partner. It is further submitted that in compliance of terms conditions of the agreement, petitioner (party No. 2) has paid an amount of Rs.5,00,00,000/- to respondent (party No. 1) after borrowing the said amount from the Bank and the petitioner has also paid a sum of Rs.1,18,00,000/- to him against remaining amount of Rs.2,62,00,000/-, which was to be paid alongwith interest by petitioner/party No. 2 to them. It is next submitted that subject cheque and other cheques were issued only as security of remaining amount i.e. Rs.2,62,00,000/- along with interest, but it was also agreed by both the parties in condition No. 8 of the agreement that if petitioner (party No. 2) will be failed to comply with the conditions of the agreement, then respondent (party No. 1) will be reinstated as partner automatically, on the refund of the amount paid by petitioner (party No.2) and, therefore, the petitioner has requested the respondent/complainant to refund th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioner also referred the judgments of the Supreme Court in the cases of Indus Airways Private Limited and others v. Magnum Aviation Private Limited and another (2014) 12 SCC 539 ; Sunil Todi and others v. State of Gujarat and another 2021 SCC OnLine SC 1174 and Ramveer Upadhyay and Another v. State of U.P. and Another 2022 SCC OnLine SC 484 in support of his submissions. 6.On the other hand, learned counsel appearing for the respondent while referring the return filed by him would submit that complaint filed by respondent discloses all necessary ingredients to attract the provisions contained in Section 138 of the NI Act against the petitioner, as the petitioner has not denied the issuance of subject cheque in favour of respondent/complainant and after presentation of the same for encashment, cheques were dishonoured. It is further submitted that submissions made by learned counsel for the petitioner that the cheque was advanced as security of the amount of Rs. 2,62,00,000/- and as per the agreement, obligation of both the parties were reciprocal in nature and there was no liability subsisting on the date of drawal of the cheque are the matter of defence, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted period i.e. 31.12.2019, then, party No. 1 will be entitled to encash the cheque given to them as security. Since the petitioner (party No. 2) could not pay the remaining amount i.e. Rs. 2,62,00,000/- with interest to respondent (party No. 1) within the stipulated period i.e. till 31.12.2019, therefore, they deposited the subject cheque for encashment, which was dishonoured by the Bank. 10.Contention of learned counsel for the petitioner in this case is that the subject cheque and other cheques were given to party No. 1 (respondent/complainant) as security and on the date of issuance of cheque, there was no subsisting enforceable debt or liability against petitioner (party No. 2), therefore, in view of explanation to Section 138 of NI Act, the said offence is not attracted against the petitioner. It is also a contention of learned counsel for the petitioner that since there was specific condition No. 8 in the agreement that if petitioner (party No. 2) will be failed to comply with the part of the agreement, then respondent (party No. 1) will be reinstated as partner automatically on the refund of the amount paid by petitioner (party No. 2) and, therefore, the petitioner has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be a triable issue. We say so because, handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques. 14.In the case of Rajeshbhai Muljibhai Patel and others v. State of Gujarat and another (2020) 3 SCC 794, their Lordships of the Supreme Court have held in paragraph 22 as under : 22..........When once the issuance of cheque is admitted/established, the presumption would arise under Section 139 of the N.I. Act in favour of the holder of cheque that is the complainant-appellant No.3. The nature of presumptions under Section 139 of the N.I. Act and Section 118(a) of the Indian Evidence Act are rebuttable. Yogeshbhai has of course, raised the defence that there is no legally enforceable debt and he issued the cheques to help appellant No.3-Hasmukhbhai for purchase of lands. The burden lies upon the accused to rebut the presumption by adducing evidence. The High Court did not keep in view that until the accused discharges his burden, the presumption under Section 139of N.I. Act will continue to remain. It is for Yogeshbhai to adduce evidence to rebut the statutory presumption. When disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued as security cannot be presented prior to the loan or the instalment maturing for repayment towards which such cheque is issued as security. Further, the borrower would have the option of repaying the loan amount or such financial liability in any other form and in that manner if the amount of loan due and payable has been discharged within the agreed period, the cheque issued as security cannot thereafter be presented. Therefore, the prior discharge of the loan or there being an altered situation due to which there would be understanding between the parties is a sine qua non to not present the cheque which was issued as security. These are only the defences that would be available to the drawer of the cheque in a proceedings initiated under Section 138 of the N.I. Act. Therefore, there cannot be a hard and fast rule that a cheque which is issued as security can never be presented by the drawee of the cheque. If such is the understanding a cheque would also be reduced to an on demand promissory note and in all 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention does not absolve liability of the petitioner from the offence under Section 138 of the NI Act, as that condition specifically speaks that respondent's position can be reinstated only when she will refund the amount paid by petitioner (party No. 2). In other words, if she will not refund the amount paid to her by the petitioner, then her position as partner cannot be reinstated. Whereas conditions No. 6 7 of the agreement specifically speak that if the amount i.e. Rs. 2,62,00,000/- alongwith interest is not paid till 31.12.2019, then the cheques given as security will be matured for encashment, hence, considering the law laid down by Hon'ble Supreme Court in case of Rajeshbhai Muljibhai Patel (supra) and Sripati Singh (Since Deceased) Through His Son Gaurav Singh (supra), aforesaid submission made by counsel for the petitioner is unsustainable. 18.As has been mentioned above that the grounds raised by the petitioner in the instant petition are grounds of defence and factual aspects of the matter, which can be adjudicated after adducing evidence by the parties. Whereas, all the necessary ingredients in respect of offence under Section 138 of the NI Act against th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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