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DELHI HIGH COURT
Vipin Sanghi, J.
Suresh Chandra Goyal —Petitioner
versus
Amit Singhal —Respondent
Crl.L.P. No.706 of 2014
Decided on 14.5.2015
(ii) Negotiable Instruments Act, 1881 — Section 138 — Indian Evidence Act, 1872 — Section 91 & 92 — Parties recorded outstanding liability of accused existing on date of execution of MOU — HELD — In this light does not stand to reason as to why they would not record repayment of amount — If money actually so returned by accused to complainant — On this aspect no challenge raised by accused during course of complainants cross examination — If amount returned over and above amount of Rs. 1.5 lakhs — Accused would have been holding not only receipt/acknowledgment given by complainant but complainant would not in possession of remaining security cheques — It stands established beyond all reasonable doubt that debt of Rs. 1.50 lakhs outstanding and payable by accused to complainant. [Para 23]
(iii) Negotiable Instruments Act, 1881 — Section 138 — Security cheques — Liability of respondent — Issuance of cheque at time of signing contract — Has to be considered against liability — As amount written in cheque payable by person on date mentioned in cheque. [Para 51]
(iv) Negotiable Instruments Act, 1881 — Section 138 — Security cheques — HELD — It makes no difference whether or not — There is express understanding between parties that security may be enforced in event of failure of debtor to pay debt or discharge other liability on due date — Mere fact that debtor has given security in form of post-dated cheque or current cheque with agreement that it is security for fulfilment of obligation to be discharged on future date itself — Sufficient to read into arrangement — An agreement that in case of failure of debtor to make payment on due date — Security cheque may be presented for payment, i.e. for recovery of due debt. If that were not so, there would be no purpose of obtaining a security cheque from the debtor — Security cheque issued by debtor so that same may be presented for payment — Otherwise it would not be security cheque — As MOU does not expressly or impliedly states that security cheques not to be used to recover instalments — Even in case of failure to pay same by respondent/debtor. [Para 61]
(v) Negotiable Instruments Act, 1881 — Section 138 — Security cheques — S. 138 of NI Act does not distinguish between cheque issued by debtor in discharge of existing debt, other liability or cheque issued as security — On premise that on due future date debt — Which shall have crystallized by then, shall be paid — So long as there is debt existing — In respect whereof cheque in question issued — HELD — Same would attract S. 138 of NI Act in case of its dishonour. [Para 62]
(vi) Negotiable Instruments Act, 1881 — Section 138 — Security cheques — Defence that cheques in question issued as “security” cheques has no force — As on date when said cheques issued simultaneously with execution of MOU — Debt of Rs. 1.5 lacs outstanding — Appellant well within his rights to enforce security in respect whereof cheques in question issued and to seek to recover outstanding debt by encashment of said cheques. [Para 63]
Result: Petition allowed
Vipin Sanghi, J.—After hearing learned counsel, leave granted.
2. Let the appeal be registered and numbered.
Crl.A. No. /2015 (to be registered and numbered)
3. I heard learned counsel finally at the admission stage with their consent and reserved judgment. Accordingly, I now proceed to dispose of the appeal.
4. The present appeal is directed against the judgment dated 15.09.2014 passed in complaint No. 96/2012, whereby the learned Metropolitan Magistrate, Karkardooma Courts, Delhi, has acquitted the respondent-accused of the offence under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).
5. The case of the complainant, as emerging from the complaint and the evidence led by the complainant, was that the complainant had invested monies, from time to time, in the business of the accused. A sum of Rs.3 Lakhs was outstanding after accounting for the monies returned by the accused to the complainant. The accused – acting as the first party, entered into a Memorandum of Understanding (MOU) dated 26.06.2011 with the appellant – acting as the second party, for return of the said remaining investment of Rs.3 lakhs to the complainant. The relevant extract of the MOU (Ex.CW-1/4), inter alia, reads as follows:
“.................
and whereas the second party Sh. Suresh Chandra Goyal has invested a sum of Rs. 3,00,000.00 (Rs. Three Lakhs only) in the month of June, 2010 and onwards by cash & various cheques by way of partnership on 50-50% basis. The Partnership was broken by way of mutual consent in first week of December, 2010.
and whereas both the parties agreed that First party will return full amount of Rs. 3,00,000/- (Rs. Three Lakhs only) to Second Party Sh. Suresh Chandra Goyal in six instalment of Rs. 50,000.00 (Rs. Fifty thousand only) by way of six monthly cheque starting from December, 2011 and Second Party Suresh Chandra Goyal will return all security cheque drawn in favour of second party, if any. It is also agreed upon by all the parties that interest @ 1.5% per month will be charged if there is any delay in getting the cheques cleared by the first party.”
6. Thus, the complainant held six cheques of Rs. 50,000/ each, given by the accused in terms of the MoU (Ex.PW1/4). The appellant/complainant admitted the receipt of Rs.1.50 lakhs out of the aforesaid amount. Three cheques in respect thereof were returned to the accused when the said amount of Rs. 1.50 lakhs was returned in installments of Rs. 50,000/- each. The appellant/complainant claimed that the accused, in order to repay the remaining amount of Rs. 1.50 Lakhs issued three cheques of Rs. 50,000 each, bearing Nos. 864160, 864161 & 864162 dated 15.01.2012, 15.02.2012 & 15.03.2012 respectively, drawn on Axis Bank, Preet Vihar Branch, Delhi, in favour of the appellant, which were exhibited as Ex.CW1/1, CW1/2 and CW1/3. The said cheques were presented and were dishonoured upon presentation on account of insufficient funds. After issuance of the statutory notice dated 04.08.2012 under Section 138 NI Act, since the accused did not make payment, the complaint was preferred. The accused admitted, while making his statement under Section 251 Cr.P.C., that he was liable to make payment to the appellant/ complainant of Rs.60,000/-, but denied that the liability was Rs.1,50,000/-.
7. The submission of learned counsel for the appellant is that the learned Magistrate, while acquitting the accused, has given two reasons in the impugned judgment. The first is that the petitioner has not been able to establish that a debt was owed by the accused towards the appellant-thus, it could not be said that the cheques Exs.CW1/1, CW1/2 and CW1/3 were issued in discharge of a debt; secondly, the learned Magistrate had held that the cheques in question were given as security cheques and, therefore, could not form the basis of a complaint under Section 138 of the NI Act.
8. In respect of the first reason, the submission of learned counsel for the appellant is that MOU (Ex
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