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TMI Blog2024 (7) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... t the payment and same still in the custody of the complainat and they are not presented for encashment. This Court is of primafacie opinion that, at this stage, it is difficult to examine the disputed question of facts which are in the form of defences, cannot be examined and therefore, the issue as to whether the cheques which were sent along with the purchase order can be considered to be in discharge of an outstanding amount or not is a subject matter of trial, because on 17.04.2021, the total outstanding dues was Rs.2,08,68,924/- and therefore, prima-facie, it can be said that, there was an outstanding liability subsisting on the date of issuance of cheques - entertaining the quashing petition at this stage will result in finality without giving the parties an opportunity to adduce the evidence as merely on the basis of pleadings and the stand taken by the parties and considering the presumption in favour of the complainant and the burden of the accused to disprove the fact that on the date of issuance of cheques, there was no legal debt, legally it would be required to be determined by the trial court after evaluation of the evidence. This Court do not find substance in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability. It was further stated in the reply that, the amount mentioned in the cheques already paid by RTGS mode, however, inadvertently, at relevant time, the accused could not obtain the cheques from the private respondent-company. In such set of circumstances, within stipulated time, the private respondent company filed a complaint under Section 138 of the N.I. Act. The Court of Judicial Magistrate, Surat issued summons to the applicantsaccused. 5. Being aggrieved with the issuance of summons, the applicants-accused are before this Court by preferring the present quashing petition. 6. Ms. Shailee Kapadia, learned counsel appearing for and on behalf of the applicants-accused has made the following submissions: (i) That the complaint under Section 138 of N.I. Act is not maintainable since the cheques were issued by way of security and not against outstanding dues. That, the cheques were given at the time of purchase of goods against the specific invoices as a security for payment and thereafter, the payment of the particular invoices raised by the complainant-company was made through RTGS mode which was reflected in the ledger accounts maintained by both the parties. In the ledge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en is caste on the accused to prove that the holder of cheque received a cheque for the discharge in whole or in part, of any debt or other liability. In the facts of the case, the outstanding as on 17.04.2021 was Rs.2,08,68,924/- which is not disputed by the other side. Thus, considering the limited scope of inquiry by the High Court under Section 482, the facts which are in nature of defence cannot be examined at this stage and same should be considered at the stage of trial because the disputed issue as raised is that, the cheques in question issued as a security and not in discharge towards the outstanding dues would be require to be tried by the trial court after giving opportunity to both the sides to lead the evidence. To buttress the contention, reliance has been placed on the judgments delivered in case of Rathishbabu Unnikrisnan vs. State of NCT (2022 SCC Online SC 513) and Sunil Todi vs. State of Gujarat (2021 SCC Online 1174) to contend that, on the date of drawal of cheques in question, the outstanding amount of the transaction was Rs.2,08,68,924/- and as per the agreeable terms and instructions at the behest of the accused company, the cheques were retained and presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplated under the N.I. Act was served, wherein it was specifically stated that, the cheques were encashed and/or presented against the outstanding dues which was subsisting on the date of issuance of cheques. The accused in the reply of notice, stated that, the cheques were issued for security purpose against the specific invoice and same require to be returned back by the complainant, but somehow they could not get it back and thus, where the amount as mentioned in the cheques was being paid through bank transfer, the encashment of the cheques in eye of law is not permissible and no any offence under Section 138 is made out. 10. In aforesaid controversy, considering the peculiar facts and circumstances of the present case, the issue falls for my consideration as to whether the applicantaccused have made out a case for quashing of criminal complaint filed under Section 138 of the N.I. Act? 11. Before adverting to the submissions, so as to determine the legal issue raised herein, the dictum of law on the subject settled by the Apex Court in its various judgments needs to be referred. (A) Cheque furnished as a security is covered under the provisions of Section 138 of N.I. Act or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where in case of loan transaction, the borrower agrees to repay the amount in a specified time frame and issues a cheque as a security to secure the repayment and the loan is not repaid, the cheque which is issued as a security would mature for presentation and the drawee of the cheque would be entitled to present the same and on such presentation, if the same is dishonoured, the complaint under 138 would be maintainable. (iv) Recently, in case of Sunil Todi vs. State of Gujarat (2021 SCC 1174), after referring the aforementioned decisions, the Supreme Court has held that, the term debt also includes a sum of money promised to be paid on a future date by reason of a present obligation and therefore a post dated cheque issued after the debt has been incurred would be covered by the definition of debt. Before the Supreme Court, the cheques were issued as a security towards the payment and endorsement to this effect was made on the reverse of the cheques. While answering the issue, the Apex Court held that, the dishonour of cheque furnished as a security is covered under the provisions of Section 138 as there was legally enforceable liability subsisting on the date of issuance of cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt under Section 138 of the N.I. Act ought not to have been quashed by the High Court by taking recourse to Section 482 of the Cr.P.C. In para-13 of the aforesaid judgment, the Supreme Court held that, the cheques drawn wherein discharge of a debt for purchase of shares. In any case, when there is legal presumption, it would not be judicious for the quashing court to carry out a detailed inquiry on the facts alleged, without first permitting the trial court to evaluate the evidence of the parties. The Quashing Court should not take upon itself the burden of separating the wheat from the chaff, where the facts are contested. To say it differently, the quashing proceedings must not become an expedition into the merits of the factual dispute, so as to conclusively vindicate either the complainant or the defence. (iv) The parameters for invoking inherent powers of the High Court to quash the criminal proceedings under Section 482 have been spelled out in State of Haryana vs. Bhajan Lal. Para-103 of the judgment would necessary to refer which reads thus: We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the cheques which were sent along with the purchase order can be considered to be in discharge of an outstanding amount or not is a subject matter of trial, because on 17.04.2021, the total outstanding dues was Rs.2,08,68,924/- and therefore, prima-facie, it can be said that, there was an outstanding liability subsisting on the date of issuance of cheques. It is in this background facts, entertaining the quashing petition at this stage will result in finality without giving the parties an opportunity to adduce the evidence as merely on the basis of pleadings and the stand taken by the parties and considering the presumption in favour of the complainant and the burden of the accused to disprove the fact that on the date of issuance of cheques, there was no legal debt, legally it would be required to be determined by the trial court after evaluation of the evidence. 13. For the reasons recorded above, this Court do not find substance in the submission made by learned counsel for the applicants-accused that the ingredients of Section 138 are not made out and the complaint under Section 138 of N.I. Act is not maintainable. 14. Resultantly, no case is made out to exercise extraordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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