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TMI Blog2012 (7) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... d. As per the agreed terms, the petitioners with a covering letter, contemporaneously executed three documents in favour of respondent No. 2, wherein, it was specifically mentioned that the three documents were being executed by the petitioners as Security for Mobilisation Advance. The details of the three documents executed by the petitioners are as under: A Promissory Note dated 19.02.2010 for Rs. 2.50 Crores; B Cheque bearing No. 909722, dated 19.02.2010 for Rs. 2.50 Crores; and C Bank Guarantee dated 19.02.2010 for Rs. 1.25 Crores. 2. The respondent No. 3 on receipt of Security Documents i.e. Cheque, Promissory Note and Bank Guarantee from the petitioners and got released Rs. 2.50 Crores from its banker in favour of the petitioner on 22.03.2010. The respondent No. 2 presented the Cheque bearing 909722 dated 19.02.2010 for a sum of Rs. 2.50 Crores. 3. The respondent No. 2 received a Memo dated 08.08.2010 from its Bankers with the endorsement Exceed Arrangements . The respondent No. 2, allegedly got issued Notice dated 26.08.2010 to the petitioners, which was dispatched on 27.08.2010. 4. Mr. Kailash Vasudev, learned Sr. Advocate appearing for the petitioners submitted that the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dishonour of the cheques issued in discharge of liability or debt, but not on account of issuance of security cheques. The learned Single Judge has also not given cogent, satisfactory and convincing reasons for disbelieving and discarding the pre-charge evidence of the appellant corroborated by the evidence of the expert opinion in regard to the interpolation in and fabrication of the cheques by adding 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/-. 8. Learned counsel for the petitioner further refers to a judgment passed by Bombay High Court in Joseph Vilangadan V. Phenomenal Health Care Services Ltd. Anr. in Criminal Writ Petition No. 2243 of 2009, wherein it was recorded as under :- 11 The issue as regards the coextensive liability of the guarantor and the principal debtor, in our view, is totally out of the purview of Section 138 of the Act, neither the same calls for any discussion therein. The language of the statute depicts the intent of the lawmakers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble under Section 138 of Negotiable Instruments Act. 14. It is further submitted that the petitioners have to prove in the trial, that he did not owe any dues towards respondent No. 2, therefore, at this stage, the instant petition is pre-matured. 15. To strengthen his arguments, learned counsel for respondent has relied upon a case of M.S. Narayana Menon(supra), wherein, it has been held as under :- 28. In view the aforementioned backdrop of events, the questions of law which had been raised before us will have to be considered. Before, we advert to the said questions, we may notice the provisions of Sections 118(a) and 139 of the Act which read as under: 118. Presumptions as to negotiable instruments - Until the contrary is proved, the following presumptions shall be made: (a) of consideration - that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration. 139. Presumption in favour of holder - It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e words Where any cheque The above noted three words are of excrement significance, in particular, by reason of the user of the word any --the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment. 17. Learned counsel for respondent further refers to a case of MMTC Ltd. and Anr. V. Medchi Chemicals Pharma (P) Ltd. and Anr., wherein, it was held as under :- 8. In this case the respondents have taken identical contentions in their petitions to quash the complaints viz. that the complaints file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the discharge in whole or in part of any debt or other liability. The Section raises presumption that cheque was drawn for consideration. This issue was also settled by several authoritative pronouncements of the Supreme Court in Maruti Udyog Ltd. v. Narender and Ors. (1999)1SCC113, and M.M.T.C. Ltd. v. Medchl Chemicals Pharma (P) Ltd., 2002 Cri LJ 266, wherein it was held: 15. A similar view has been taken by this Court in the case of K.N. Beena v. Muniyappan reported in 2001(7) Scale 331, wherein again it has been held that under Section 139 of the Negotiable Instruments Act the Court has to presume, in complaint under Section 138, that the cheque had been issued for a debt or liability. 16. There is Therefore no requirement that the Complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on basis of averments in the Petitions filed by them the High Court could not have concluded that there was no existing debt or liability. The Apex Court rejected the similar contention in recent case in A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volves stipulated that as a security for due performance of agreement, a sum of Rs. 138 lacs was to be deposited by the Ansal Buildwell Co. with the respondent No. 2 and other owner of the said property. 8. Clause V reads as under: V. Security Deposit (a) The Builder shall deposit with the owners a total sum of Rs. 138 lakhs towards security for due compliance of the terms of this Agreement by the Builder. A sum of Rs. 11.5 lakhs has already been received by the owners from the Confirming Party, receipt whereof the owners hereby acknowledges. The Builder shall return the said sum of Rs. 11.5 lakhs on behalf of the owners, and the balance sum of Rs. 126.5 lakhs shall be paid by the Builder to the owners in 30 equal monthly Installments as per Annexure-II hereto. (b) Payment of the said cheques on the due dates is the essence of the contract. In the event any cheque is dishonoured for any reason, the Builder shall replace the cheque with a demand draft within 7 days of the receipt of an intimation from the owners failing which the owners shall be entitled to take recourse to any right or remedy available to or accruing to the owners by such dishonour. (c) The said deposit shall not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la 2006 Cri LJ 4607 in support of his contention that where a cheque is given only as a security, the provisions of Section 138 of the N.I. Act are not at all attracted. 17. At the outset, I note that the expression other liability cannot be construed as akin to the preceding word debt . The expression other liability can take its meaning and colour from the preceding word debt only if the rule of ejusdem generis is held to be applicable. 18. The rule of ejusdem generis is applicable when words pertaining to a class, category or genus are followed by general words. In such a case, the general words take their meaning from the preceding particular words because the legislature by using the particular words of a distinct genus has shown its intention to that effect. Thus, before the rule of ejusdem generis is applied it is a pre-requisite that there must be a distinct genus, which must comprise of more than one species. Consequently, if a general word follows only one particular word, that single particular word does not constitute a distinct genus and Therefore rule of ejusdem generis cannot be applied in such a case. 20. The Supreme Court had the occasion to consider the ambit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The judgments recorded in the order of the High Court do not have any relevance in the contextual facts and the same thus does not lend any assistance to the contentions raised by the respondents. 23. Thus, if given its full meaning, the expression other liability within its broad sweep would include any liability to pay . 25. The doctrine of fundamental terms of a contract as enunciated in the decision reported as Suisse Atlantique Societe D'Armement Maritime S.A. v. N.V. Rotterdamche Kolen Centrale (1967) 1 AC 361 is as under: A fundamental term of a contract is a stipulation which the parties have agreed either expressly or by necessary implication or which the general law regards as a condition which goes to the root of the contract so that any breach of that term may at once and without reference to the facts and circumstances be regarded by the innocent party as a fundamental breach and thus is conferred on him the alternative remedies at his option. 29. Under the agreement, the accused company had a liability to pay Rs. 138 lakhs to the complainant and other owner of the said property and discharge of this liability was treated fundamental to the agreement, non-perform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in lieu of goods or service. Any benefit or detriment of some value can be a consideration. 37. In the instant case, the complainant and the other owner of the said property blocked their asset (property) till the period of completion of construction as provided in the agreement. The promise/act of the complainant and other owner of the said property of blocking their asset for a considerable period can very well be held to be a consideration within the meaning of Section 2(d) of the Indian Contract Act. Thus all reciprocal obligations of the builder would also be a consideration for the contract. 38. In the decision reported as Narayana Menon v. State of Kerala 2006 Cri LJ 4607 relied upon by the counsel for the petitioners, the Supreme Court was considering the nature and extent of statutory presumption provided under Section 118(a) and 139 of the N.I. Act. The observations relied upon the counsel reads as under: 57. We in the facts and circumstances of this case need not go into the question as to whether even if the prosecution fails to prove that a large portion of the amount claimed to be part of debt was not owing and due to the complainant by the accused and only because he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id. 25. It is settled law that at this stage the Court is not justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the complaint. The inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice. At this stage the court should not go into merits and or come to conclusion that there was no existing debt or liability. 26. In view of the above discussion, my opinion matched with the law as has been settled in a judgment delivered by Gujarat High Court in the case of Om Prakash v. Gurucharan Singh (supra) wherein, it has been held that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. 27. The case of the petitioner is not that they have no debts against the respondent and the cheque in question was issued only for security; the case is otherwise, they failed to discharge their enforceable debt. The respondent presented the same and on dishonor of the said cheque, he filed the complaint under Section 138 of NI Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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