DELHI HIGH COURT
Vipin Sanghi, J.
Credential Leasing & Credits Ltd. —Petitioner
versus
Shruti Investments & Anr. —Respondents
Crl. L.P. No.558 of 2014
Decided on 29.6.2015

IMPORTANT POINT
Scope of Section 138 NI Act would cover cases where the ascertained and crystallised debt or other liability exists on the date that the cheque is presented, and not only to case where the debt or other liability exists on the date on which it was delivered to the seller as a post-dated cheque, or as a current cheque with credit period.

Headnote:Negotiable Instruments Act, 1881 — Section 138 — Dishonour of cheque given as security for transactions taken up at later stage — Acquittal judgment by trial Court on premise that on the date of issuance of cheque there was no debt or other liability existing on that date and thus cheque was not issued in discharge of an existing debt or other liability — Appeal — Complainants case was that it was member of National Stock Exchange dealing in capital market — On request of accused and in consideration of cheque in question dt. 22.6.96 for Rs.14 lakhs and deposit of certain shares with complainant as security accused were allowed to conduct sale and purchase of shares on credit basis with complainant with understanding that cheque could be encashed in case of failure of accused to meet its liability it and when if arose due to share transactions undertaken by accused — Accused conducted transactions as per detailed bills and statement of accounts more than Rs.14 lakhs became due and complainant presented cheque which was dishonoured — Section 138 of Act would cover case where ascertained and crystallized debt or other liability existed on the date when cheque was presented — It would need examination on a case to case basis as to whether on the date of presentation of dishonoured cheque the ascertained and crystallized debt or other liability did not exist — Trial Court was not justified in passing acquittal judgment when defence set up by accused that accused had given blank signed papers to complainant-appellant was unbelievable — Accused was liable to be convicted.

       Held: In my view, therefore, the scope of Section 138 NI Act would cover cases where the ascertained and crystallised debt or other liability exists on the date that the cheque is presented, and not only to case where the debt or other liability exists on the date on which it was delivered to the seller as a post-dated cheque, or as a current cheque with credit period. The liability, though, should be in relation to the transaction in respect whereof the cheque is given, and cannot relate to some other independent liability. If, on the date that the cheque is presented, the ascertained and crystallised debt or other liability relatable to the dishonoured cheque exists, the dishonor of the cheque would invite action under Section 138 NI Act. There could be situations where, for example, an issue may be raised with regard to the quality, quantity, deficiency, specifications, etc. of the goods/services supplied, or accounting. It would have to be examined on a case to case basis, whether an ascertained or crystallised debt or other liability exists, which could be enforced by resort to Section 138 NI Act, or not.

       The decision in Collage Culture (supra) is premised entirely on the decision of the Supreme Court in M.S. Narayana Menon (supra). It appears that the decision in Beena Shabeer (supra) was not cited before the Court. In the light of the aforesaid discussion, I am of the view that this decision does not come to the aid of the accused.

       Thus, I am of the considered view that there is no merit in the legal submission of the respondent accused that only on account of the fact that the cheque in question was issued as security in respect of a contingent liability, the complaint under Section 138 of the NI Act would not be maintainable. At the same time, I may add that it would need examination on a case to case basis as to whether, on the date of presentation of the dishonoured cheque the ascertained and crystallised debt or other liability did not exist. The onus to raise a probable defence would lie on the accused, as the law raises a presumption in favour of the holder of the cheque that the dishonoured cheque was issued in respect of a debt or other liability. As settled by the Supreme Court, the said onus obliges the accused to raise a defence - either by picking holes in the case of the complainant and/ or by positively leading defence evidence which leads the Court to believe that there is a probable defence raised by the accused to the claim of the complainant with regard to the existence of the debt or other liability. The said onus does not cast as stringent an obligation on the accused, as it casts on the complainant, who has to prove beyond reasonable doubt the guilt of the accused.

       The defence set up by the respondent/accused that accused no.2 had given blank signed papers to the appellant/complainant is unbelievable. Firstly, there is no contemporaneous record produced by the accused to show that the accused had delivered blank signed papers to the complainant for any purpose, much less for the purpose of becoming a sub-broker of the complainant. Secondly, a perusal of Ex. CW-1/10, 1/11, 1/13, 1/15 and 1/17 shows that the signatures of accused no.2 on the said documents are so positioned and placed as to rule out the possibility of the said documents being filled in later. Ex. CW-1/10, 1/11, 1/12, 1/13 and 1/15 are the daily sauda confirmation on a printed format. The signatures appear outside the printed area and are so placed as to suggest that they have been consciously engrossed on these documents close to the printed area. Ex. CW-1/17 is a hand written communication, and there is nothing to suggest that the writing in the said document is different from the signatures of DW-2, which he has admitted. Pertinently, Ex. CW-1/17 records that the accused issued a cheque of Rs.50,000/- towards his liabilities. The said letters along with the cheque were issued on the 24.07.1996, i.e. the same day on which the last of the cash difference bills were prepared. The cash difference bills, as noticed herein above, are premised on the daily sauda confirmation acknowledged by the accused. (Paras 28 to 30 & 35)

       Result: Appeal allowed.