IMPORTANT POINT
Dishonour of cheque – Complaint cannot be quashed by High Court on mere presumptions.

ORDER :

Leave granted.

2. The High Court, by a lengthy judgment with copious extracts from the decisions of this Court, quashed a complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (for short, the NI Act), filed by the appellant against the second respondent. The primary ground on which the complaint was quashed was that the complainant failed to disclose the lawyer-client relationship between the second respondent and the appellant and there were also multiple grounds on the falsity of the claim raised in the complaint, which we cannot but observe at the outset, was not possible without analysis of the evidence; which has not even been led as of now.

3. We heard Mr. Pashupati Nath Razdan, learned counsel for the appellant and Mr. Arup Banerjee, learned counsel for the second respondent, who is an Advocate and also the learned State counsel.

4. The allegation in the complaint filed by the appellant herein was that the second respondent had requested a loan from the appellant in the year 2016 for purchase of a land. The complainant is stated to have made a loan of Rs.12.2 lakhs on 02.10.2016 in the presence of certain witnesses. Though, the loan amount was promised to be returned by January 2017, since demonetisation occurred, the second respondent sought further time, especially since he could not sell the plot. On 19.03.2020, the second respondent handed over a cheque for Rs.11 lakhs which when presented was dishonoured on 21.04.2020. The second respondent then requested the appellant to present it on 15.06.2020, when again the cheque was dishonoured on 16.06.2020 and hence, the complaint under Section 138 of the NI Act.

5. The second respondent filed an application before the High Court to quash the complaint by setting up a defence that in fact the cheque was issued as part consideration for the purchase of an Innova car owned by the complainant. It is averred that the total consideration for the car was Rs.12.25 lakhs of which Rs.1.25 lakh was paid in cash. The cheque was issued on the clear understanding that it will be presented only after the car is handed over, for which purchase the second respondent also required finance from a bank which was being arranged. Since Covid-19 intervened, the finance could not be obtained and hence the deal fell through, is the contention taken.

6. In the application filed for quashing, the respondent also contended that he was a lawyer handling two cases of the complainant. It was contended that there were agreements executed by the complainant with witnesses, clearly indicating the agreed purchase of the car towards which the cheque was issued. The complainant has a specific contention that the agreements now projected by the second respondent are fabricated, on the blank papers signed by the appellant for the purpose of court cases.

7. The High Court found that the appellant had not come to Court with clean hands, especially since the lawyer client relationship was suppressed. We cannot accept this as a sound ground, especially since the facts disclosed from the averments of both parties do not indicate the transaction alleged and countered, to be in the course of a lawyer client relationship. It was also found by the High Court that the contention of the relationship between the parties having arisen due to the fact that the brother-in-law of the second respondent was the Manager of the institution in which the complainant worked stood belied. This is inconsequential insofar as the second respondent also accepts the acquaintance with the complainant and despite the second respondent being the lawyer of the complainant, he entered into a transaction for the purchase of a car with the complainant. The relationship was not confined to that of a lawyer and client and extended to commercial transactions.

8. The further finding that the complainant was attempting to wreak vengeance on the institution he worked in, fails miserably since there is no perceivable dispute with th