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TMI Blog2024 (6) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... ntation, part of the said amount is paid by the drawer of the cheque, then the drawee has to necessarily/mandatorily make an endorsement of the aforesaid part-payment upon the cheque and only then the cheque can be presented for encashment. If the said endorsement is not made, then even if the said cheque is dishonoured upon presentation, the same does not make out an offence under Section 138 NI Act, since the cheque does not represent legally enforceable debt at the time of its presentation/encashment. In the present case, the factum of part-payment of Rs.7,50,000/- is not disputed. However, the subject cheque, which has been presented for encashment, is for the entire amount payable under it i.e. Rs.22,40,000/-, which is evidenced by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and smoked sheet. In this regard, the petitioner raised an invoice of Rs.22,40,000/- which was paid by the respondent through RTGS. However, the petitioner failed to supply the aforesaid goods and in order to refund the payment made, issued a (post-dated) cheque bearing No. 017487 dated 21.03.2020 drawn on Indian Overseas Bank for the aforesaid amount of Rs.22,40,000/-. It is further stated that in between, the petitioner made payment of an amount of Rs.7,50,000/- on 17.03.2020 through RTGS, towards part refund of the amount. However, despite repeated requests, the petitioner failed to repay the balance refund amount of Rs.14,90,000/- and the respondent presented the cheque for encashment. However, the same was returned dishonoured vide re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent dishonour of the subject cheque does not constitute the offence under Section 138 NI Act. 4. Learned counsel for the respondent, on the other hand, has resisted the present petition. He submits that the summoning order has been passed after due consideration of the facts and circumstances of the case. Further, while acknowledging the factum of part payment, he contends that the demand notice issued to the petitioner was only w.r.t the balance refund amount of Rs.14,90,000/-. 5. I have heard learned counsels for the parties and have also perused the material placed on record. 6. The issue arising in the present case relates to endorsement of part-payment upon a cheque presented for encashment. In this regard, it would be apposite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be presented for encashment without recording the part-payment. If the unendorsed cheque is dishonoured on presentation, the offence under Section 138 would not be attracted since the cheque does not represent a legally enforceable debt at the time of encashment. xxx 34.2 If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque. 34.3 When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of the offence punishable under Section 138 of Negotiable Instruments Act. Obviously this could not have been the intention of the legislature to make a person liable to punishment even if he has made arrangements necessary for payment of the amount which is actually payable by him. If the drawer of the cheque is made to pay more than the amount actually payable by him, the inevitable result would be that he will have to chase the payee of the cheque to recover the excess amount paid by him. Therefore, I find it difficult to take the view that even if the admitted liability of the drawer of the cheque has got reduced, on account of certain payments made after issue of the cheque, the payee would nevertheless be entitled to present the ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an argument has been raised on behalf of the respondent that the demand notice issued was only w.r.t the balance amount of Rs.14,90,000/-, however, in light of the aforenoted authoritative decisions, the said contention does not lend any credence to the case of the respondent. 13. In view of the factual and legal position enumerated above, this Court is of the considered opinion that continuation of the legal proceedings against the petitioner would be an abuse of process of law. Consequently, the petition is allowed and the complaint case bearing No.310/2021 is quashed. As a necessary sequitur, the summoning order dated 19.02.2021 is also set aside. 14. The petition alongwith pending application is disposed of in the above terms. - - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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