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2012 Supreme(Bom) 2375
High Court of Judicature at Bombay
K.U. CHANDIWAL, J.
M/s.Carissa Investment Pvt.Ltd. & Others
Versus
M/s.Mahabal Realty Pvt.Ltd. & Others
Criminal Application Nos.1187 of 2011 & 983 of 2012
Decided on : 20-12-2012
For the Applicants:Shirish Gupte @ Ketan Chotani, Advocates.
For the Respondents:R1, Jatin P. Shah, Advocate, A.R. Patil, APP.
The main legal point established in the judgment is the requirement of a specific demand for the payment of the cheque amount in the statutory notice under Section 138 of the Negotiable Instruments Act.
Headnote:
Negotiable Instruments Act - Financial Dispute - Section 138, Section 141 - Summary: The court discussed the accusation of default in repayment of outstanding dues, the presentation of a cheque for a higher amount than due, and the legal implications of the statutory notice. Key legal provisions such as presumption of consideration under the Negotiable Instruments Act and the requirement of specific demand in the notice were highlighted. The court's decision was influenced by the interpretation of the statutory notice and the concept of security under the Act.
Fact of the Case:
The case involved a financial dispute between Mahabal Realty Pvt.Ltd. and the accused regarding the repayment of outstanding dues and the presentation of a cheque for a higher amount than due.
Finding of the Court:
The court found that the statutory notice needed to contain a specific demand for the payment of the cheque amount, and the defense of cheque issued as security required evidence of repayment.
Issues: The issues revolved around the legality of the cheque presentation, the sufficiency of the statutory notice, and the vicarious liabilities of the accused.
Ratio Decidendi: The court's decision was based on the interpretation of the statutory notice and the concept of security under the Negotiable Instruments Act.
Final Decision: Criminal application no.1187 of 2011 and Writ petition no.983 of 2012 were dismissed with costs, and the parties were directed to appear before the learned M.M.Andheri.
Heard finally. Criminal application no.1187 of 2011 is moved by the accused nos.1 & 4applicants challenging order of process confirmed by the learned Additional Sessions Judge dated 5th October, 2011. Writ petition no.983 of 2012 is moved by the original complainant questioning quashing of process against respondent nos.2 and 3 (original accused nos.2 and 3).
2. The parties are referred as complainant and accused. On the complaint of Mahabal Realty Pvt.Ltd. under Section 138 read with 141 of the Negotiable Instruments Act, the learned Judge issued process after recording verification on 17th December,2008.
3. The complaint proceeds on the accusation that in discharge of legally enforceable liability in respect of financial assistance rendered by the complainant to the accused no.1 from time to time, a cheque of Rs.10 crores was issued. An agreement was entered into between the parties. The complainant used to send statement of accounts in respect of loan transaction (financial assistance) to accused no.1. Since there was default in repayment of outstanding dues in terms of the agreement, the complainant company sold shares given to them by way of security for clearing the outstanding legal dues. The sale proceeds of the shares were adjusted towards the outstanding legal dues. The company-complainant asserts that in the month of September,2009, it had approached all the accused with request to clear balance legal dues, but barring blank assurances nothing fruitful has taken place. The cheque in question was signed by the original accused no.4, with consent and knowledge and in presence of accused nos. 2 and 3, in discharge of their liability.
4. As on 30th September,2008, a sum of Rs.3,57,96,991/- was due and receivable from accused no.1 to complainant company, and since the amounts were not paid, the cheque of Rs.10 crores was presented in Kotak Mahindra Bank Ltd. and same is returned to the bank with Cheque Return Memo dated 1.10.2008 of HDFC Bank Ltd. and also Cheque Return Memo dated 1.10.2008 of Kotak Mahindra Bank Ltd. with the endorsement “Funds Insufficient”. This was followed by the statutory notice to the accused. The notice was received by accused no.1 company, however, it was refused by accused nos.2, 3 and 4.
5. In the statutory notice in paragraph 7, it was specifically informed that as on 30th September,2008, an amount of Rs.3,57,96,991/- was due and receivable from the accused and same was demanded, though the cheque was of Rs.10 crores.
6. The learned Counsel for accused submits that the cheque was as a security and could not have been presented. The liability was reduced as could be seen, therefore, presentation of a cheque for Rs.10 crores was illegal. The predominant factor in the matter is (a) a cheque was given as security, could it be presented for recovery of dues;
(b) The cheque was for a higher amount than due, could it brand drawer with liability.
7. Under the Scheme of the Negotiable Instruments Act, Court has to presume a negotiable instrument to be for consideration unless the existence of consideration is disproved. The Petition is under Section 482 of Cr.P.C. seeking to quash the proceedings, which need not be entertained, unless parties lead evidence. This is more so, for the Petitioners/Accused there is nothing primarily to accelerate and project a travesty of justice or process has dominantly arrested legitimate rights or is a weapon of oppression.
8. Section 138 of the Negotiable Instruments Act does not preclude a Court for considering earlier payments if made. Example quoted by Mr.Shah is eloquent to generate thought process.
9. If a borrower has issued a cheque for amount due to the Creditor, mischievously deposits paltry sum in later's account, can he be permitted to stall the legal consequences of dishonour of the cheque. I find substance in it.
10. There was no legal bar in the instant case for the complainant to accept part payments and give credits to the Petitioners u
