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2006 Supreme(Del) 1803
High Court Of Delhi
BADAR DURREZ AHMED
RAMESHWAR DASS DEVI DAYAL (P) LTD - Appellant
Versus
CONSOLIDATED STEELS AND ALLOYS LTD - Respondents
CRL REV P 426 Of 2002
Decided On : 10/09/2006
ANAND AGRAWAL, TANVEER AHMED MIR
The presumption under Section 139 of the Negotiable Instruments Act mandates that the holder of a cheque received the cheque for the discharge of any debt or other liability, and the burden of proof to rebut the presumption lies on the accused. The accused cannot be discharged without the case proceeding to trial, and the presumption can only be rebutted by adducing evidence.
Headnote:
Negotiable Instruments Act - Discharge of Debt - Section 138, Section 141 - Summary of Acts and Sections: The court discussed the scope and ambit of the word 'debt' and 'other liability' as per Section 138 and Section 139 of the Negotiable Instruments Act, 1881. The court highlighted the presumption that a cheque is issued for the discharge of any debt or other liability, and the burden of proof to rebut the presumption lies on the accused. The court emphasized that the presumption can only be rebutted by adducing evidence, and the stage of adducing evidence comes at the trial.
Fact of the Case:
The petitioner extended margin money and provided securities for a bank guarantee on behalf of the respondent No. 2. When the bank guarantee was in danger of being invoked, the respondent No. 2 issued a cheque to the petitioner, which was dishonoured. The petitioner filed a complaint under Section 138 read with Section 141 of the Negotiable Instruments Act.
Finding of the Court:
The court found that the cheque issued by the respondent No. 2 to the petitioner was for the discharge of a debt or other liability. The court emphasized the presumption under Section 139 of the Negotiable Instruments Act, which mandates that the holder of a cheque received the cheque for the discharge of any debt or other liability, and the burden of proof to rebut the presumption lies on the accused.
Issues: The primary issue was whether the cheque issued by the respondent No. 2 to the petitioner was for the discharge of any debt or other liability. Another issue was whether the learned Additional Sessions Judge could interfere in exercise of his revisional jurisdiction with the order of issuance of notice under Section 251 CrPC passed by the learned Metropolitan Magistrate.
Ratio Decidendi: The court held that the presumption under Section 139 of the Negotiable Instruments Act must be raised, and the accused cannot be discharged without the case proceeding to trial. The court emphasized that the presumption can only be rebutted by adducing evidence, and the burden of proof lies on the accused.
Final Decision: The impugned order passed by the learned Additional Sessions Judge was set aside, and the order passed by the learned Metropolitan Magistrate was revived. The matter was directed to be placed before the learned Metropolitan Magistrate for further proceedings in accordance with law.
BADAR DURREZ AHMED, J, J.
( 1 ) THIS revision petition has been filed challenging the order dated 13. 2. 2002 passed by the learned Additional Sessions Judge whereby the respondents 2 to 4 have been discharged of the offences committed under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. The impugned order was, itself, passed in a revision petition preferred by the accused against the order dated 1. 6. 2001 passed by the learned Metropolitan Magistrate whereby notice under Section 251 Cr. P. C. had been issued against them in view of the alleged offences committed by them under Section 138 read with Section 141 of the Negotiable Instruments Act (hereinafter referred as `the said Act' ).
( 2 ) THE question that has been primarily raised before this Court is whether the cheque for Rs 40,80,100/- issued by respondent No. 2 in favour of the petitioner on 3. 9. 1999 was for the discharge, in whole or in part, of any debt or other liability. This question has been so raised because, by virtue of the impugned order, the learned Additional Sessions Judge was of the view that the said cheque was not issued for the discharge of any debt or other liability. According to the learned counsel for the petitioner, this is an erroneous conclusion whereas the learned counsel appearing on behalf of the respondents 2 to 4 supports the findings returned by the learned Additional Sessions Judge.
( 3 ) THE facts are that the respondent No. 2 entered into a transaction with steel Authority of India Limited for which purpose the respondent No. 2 was required to extend a bank guarantee in the sum of Rs 40,00,000/ -. The respondent No. 2 did not have the wherewithal at that point of time to arrange for a bank guarantee for the said sum of money. In these circumstances, the respondent No. 2 approached the petitioner and requested the petitioner to provide security to the bank so that the bank could extend the guarantee in favour of Steel Authority of India on behalf of the respondent No. 2. The petitioner, after some persuasion, agreed to do so. The petitioner secured the bank - J. and K. Bank Limited, South Extension Part-II Branch, New Delhi - by providing margin money to the extent of Rs 14,00,000/- and also other securities which were already with the bank. On the basis of the margin money extended by the petitioner and the other securities of the petitioners that were already available with the bank, a bank guarantee for the amount of Rs 40,00,000/-was extended in favour of Steel Authority of India Limited on 5. 6. 1999 on behalf of the respondent No. 2. It is the petitioner's contention that sometime in august, 1999, the petitioner came to know that the Steel Authority of India was not very happy with the working of the respondent No. 2 in the transaction that they had entered into and that there was imminent danger of the bank guarantee being invoked by Steel Authority of India. In these circumstances, the petitioner is said to have approached the respondent No. 2 and requested the respondent No. 2 and its Directors, i. e. respondents 3 and 4 that the petitioner should be secured because the bank guarantee could be invoked at any point of time and the petitioner had already extended itself by providing margin money of rs 14,00,000/- and by putting various securities at the mercy of the bank. The respondent No. 2, as a consequence of these submissions made by the petitioner, agreed to give a cheque in favour of the petitioner to the extent of Rs 40,80,100/- on 3. 9. 1999. Although, the bank guarantee was for the amount of Rs 40,00,000/-, an additional sum of Rs 80,100/- was also included in the cheque inasmuch as that was the amount of commission charges paid by the petitioner for arranging the bank guarantee. On receipt of the cheque, the petitioner presented the same on 4. 9. 1999. The same was dishonoured, with the bank returning this cheque with the endorsement "insufficient funds". Thereafter, the requisite notice
