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TMI Blog2024 (6) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... ven for the discharge of a legally enforceable debt, which has been accepted by the courts below on the ground that neither the appellant has proved that the cheques were given for the purpose of discharging a legally enforceable debt nor any materials have been placed by the appellant to show that there existed a legally enforceable debt towards which the cheques in issue were given. Without the appellant discharging his share u/s 138, the appellant cannot fall back on Section 139 to show that the presumption would have to be given to the appellant and the ball would have to be placed in the court of the respondents to prove that the cheques were not given towards the discharge of a legally enforceable debt or other liability. The appellant ought to discharge their burden by giving the requisite details with regard to the statement of account and all the other details, which have been noted above and without giving the aforesaid details, placing a cheque, which is alleged to have been dishonoured, which is alleged to have been given by the respondents cannot be the basis to hold that a case u/s 138 of the Act is made out. The whole case of the respondents is on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are dispensed with. 5. The facts in all the appeals/petitions are one and the same and, therefore, barring the specifics, the brief facts, which are required for appreciation of the issue are stated hereunder. 6. Chits run by the appellant are governed by the Tamil Nadu Chit Funds Act. The respondents in all the appeals/petitions are persons, who had entered into chit transaction with the appellant. The period of chit covered in all the cases is for a tenure of 20 months. It is the case of the appellant that the respondents, who were paying the monthly chit amounts, at various points of time in the chit, had become the successful bidder and they were disbursed the prize money by the appellant. However, after receiving the chit amount, even before the term, on the basis of their successful bid, the respondents failed to honour the commitment to pay the subscription amount every month till the end of the chit term and, thereby, committed default and the respondents are liable to pay various sums of money, as detailed in the respective affidavit filed in support of the appeals/petitions. 7. It is the further case of the appellant that due to the said default committed by the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the debt, then the presumption falls on the respondents to prove that the cheque was not given for the purpose of discharge of the debt. Since the respondents have failed to prove the same, necessarily the benefit should fall on the appellant and the court below ought to have appreciated the said fact in proper perspective, which it has miserably failed to do and, therefore, the respective orders require interference at the hands of this Court. 11. In support of the aforesaid submissions, learned counsel for the appellant placed reliance on the following decisions :- i) M/s. Oriental Kuries Ltd. Vs Lisa Ors. (AIR 2020 SC 115); ii) K.Selvam Anr. Vs M/s. Gokulam Chit Fund Pvt. Ltd. (Crl. O.P. (MD) 8115 8202 of 2018 Dated 12.11.2019); iii) M/s. Sri Krishna Agencies Vs State of A.P. Anr. (2AIR 2009 SC 1011); iv) Dashrathbai Trikambahi Patel Vs Hitesh Mahendrabhai Patel anr. (2022 Live Law (SC) 830); and v) Sripathi Singh Vs State of Jharkhand (2021 Live Law (SC) 606) 12. Per contra, learned counsel appearing for the respondent in Crl. A. No.305/2021 submitted that Section 138 of the Act clearly mandates that the cheque which has been drawn by the person should be for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of chit. 17. Before appreciating the facts in issue, Sections 138 and 139 of the Act, which are relevant for the consideration of the present issue, requires to be adverted to and the same is quoted hereunder :- 138. Dishonour of cheque for insufficiency, etc., of funds in the account. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice. to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless- (a) the cheque has been, presented to the bank within a period of six months from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants. 21. A careful perusal of the various documents produced by the appellant in the respective complaints against the respondents show that, but for the account statement for the said period, there is no other material to show that there is a default committed by the respondents. Further, there is also no material to show that the appellant had called upon the respondents to pay the said sum towards the chit default by giving the requisite details with regard to the non-payment of monthly chits by the respondents. 22. In fact, it is the specific case of the respondents before the trial court that they had called upon the appellant to provide them the break up of the details with regard to the sums that are alleged to be due by the respondents, but no such material or information were provided by the appellant. It is the further case of the respondents that notwithstanding the said fact, the cheque, which is alleged to have been dishonoured, was not given to discharge a legally enforceable debt, but it was given as a security along with other connected papers, including blank papers and pronote and the appellant had nowhere proved that the cheques, which were dishonoured, forming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which is alleged by the appellant is towards the discharge of monthly chit amounts by the various respondents. The Chit Funds Act provides for necessary avenues in which the amount in default can be claimed by the appellant. Therefore, the chits being approved by the authority, necessarily, the default towards the same, the appellant has to take recourse under the Chit Funds Act. 27. Turning the attention of this Court to the various decisions relied on by the learned counsel for the appellant, even at first blush, the decision in Selvam and Krishna Agencies case, would not in any way be of assistance to the appellant. Insofar as the decision in Oriental Kuries case is concerned, it is a case initiated under the Chit Funds Act, in which the Apex Court had held that the foreman in the chit transaction could proceed against the defaulted members of a chit under the Chit Funds Act. However, in the present case, the case is under the Negotiable Instruments Act and that the security has not been enforced against the respondents by the foreman and, therefore, the said decision cannot be pressed into service. 28. The decision in Dashrathbhai case is more in favour of the respondents. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 (2) GLH 105] appended to the cheque. When such an endorsement is made, the instrument could still be used to negotiate the balance amount. If the endorsed cheque when presented for encashment of the balance amount is dishonoured, then the drawee can take recourse to the provisions of Section 138. Thus, when a part- payment of the debt is made after the cheque was drawn but before the cheque is encashed, such payment must be endorsed on the cheque under Section 56 of the Act. The cheque cannot 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. 29. From the aforesaid decision, it is implicitly evident that the payments which have been made should be reflected so as to come to the conclusion that the cheque, which is the subject matter of dishonour was with regard to the discharge of a legally enforceable debt. Further, the Apex Court has held that the dishonour of the cheque alone cannot be the criteria to invoke Section 138 of the Act, but the cheque, which stood dishono ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 138 of the Act, necessarily, the appellant has to place the requisite details like the statement of account, the details of the payments made, the default amount and establish that there is a debt, which requires to be honoured by the respective respondents, which alone could be enforced and also further prove that the cheques, which have since been dishonoured were, indeed, issued by the respective respondents towards the discharge of the said legally enforceable debt. If the appellant is able to provide all the details and place materials to establish the same, then there would be no impediment for the court below to look into the issue u/s 138 of the Act. Without placing the aforesaid materials, it would not be justified for this Court to interfere with the well considered orders passed by the courts below in the respective petitions. 34. For the reasons aforesaid, the impugned orders passed by the respective courts in the petitions does not deserve interference and the same stands affirmed. However, liberty is granted to the appellant to provide all the details, such as statement of account, the payment and receipt details with regard to the chit amounts, the defaulted amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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