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2006 Supreme(Del) 2061

High Court Of Delhi
Badar Durrez Ahmed
VIRENDER SINGH - Appellant
Versus
LAXMI NARAIN - Respondents
Crl. Rev. P. 106 Of 2005
Decided On : 11/11/2006

Advocates Appeared:
C.K.Sharma, Mohinder Saini, Prashant Khatana, Vikas Chandra Tripathi

The main legal point established in the judgment is that for the application of Section 138 of the Negotiable Instruments Act, there must be a legally enforceable debt or liability for the cheque to discharge, and agreements with unlawful consideration are void ab initio.

Headnote:

Negotiable Instruments Act - Dishonour of cheque - Section 138 - Summary of Acts and Sections: The court discussed the provisions of Section 138 of the Negotiable Instruments Act, 1881 and its interplay with Section 23 of the Indian Contract Act, 1872. The court highlighted the requirement for a legally enforceable debt or liability for the application of Section 138 and emphasized the void nature of agreements with unlawful consideration.

Fact of the Case:

The petitioner was convicted under Section 138 of the Negotiable Instruments Act for dishonouring a cheque issued as illegal gratification for securing a job. The petitioner argued that the agreement was void due to unlawful consideration and, therefore, the cheque was not for the discharge of any debt or liability.

Finding of the Court:

The court found that the agreement between the parties was void ab initio due to unlawful consideration, and thus, there was no legally enforceable debt or liability for the cheque to discharge. The court set aside the conviction of the petitioner and allowed the revision petition.

Issues: The main issue was whether the cheque issued by the petitioner was for the discharge of any debt or other liability, considering the void nature of the agreement due to unlawful consideration.

Ratio Decidendi: The court held that the cheque was not for the discharge of any legally enforceable debt or liability, as the agreement was void ab initio due to unlawful consideration. Therefore, Section 138 of the Negotiable Instruments Act was not attracted.

Final Decision: The revision petition was allowed, and the petitioner was acquitted. The petitioner had already paid a sum of Rs. 1,00,000 to the complainant and undertook to pay a further sum of Rs. 20,000 within two months.


BADAR DURREZ AHMED, J.

( 1 ) THIS revision petition is directed against the judgment and order dated 17. 12. 2004, whereby the appeal preferred by the petitioner against the judgment dated 21. 8. 2004, passed by the learned Metropolitan Magistrate, was dismissed. By the judgment dated 21. 8. 2004 and order dated 9. 9. 2004, the learned Metropolitan Magistrate, New Delhi, had convicted the petitioner under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the said Act)and directed him to be released on probation for a period of one year on furnishing a personal bond in the sum of Rs. 25,000 with one surety of the like amount and to pay a compensation of Rs. 1,20,000.

( 2 ) THE facts as indicated in the impugned order are that the complainant gave a sum of Rs. 80,000 to the petitioner and his father, who were arrayed as accused No. 1 and 2 respectively. The said sum of Rs. 80,000 was allegedly paid by the complainant (respondent No. 1) to the accused for the purposes of securing a job for the complainant's nephew in Haryana police. In essence, this money was paid by way of illegal gratification for the purposes of arranging the said job through purported high profile political leaders. However, the complainant after having paid the said sum of Rs. 80,000 did not get the job for his nephew. Since the job was not made available to the complainant's nephew, the complainant requested the accused to return the amount of Rs. 80,000 to the complainant. The said sum was not easily forthcoming. After great persuasion and intervention of elders, the petitioner admitted liability on behalf of his father and promised to pay the sum of Rs. 80,000 to the complainant and in pursuance of this promise, issued a cheque of Rs. 80,000 on 30. 3. 2000 drawn on Punjab National Bank, Najafgarh, delhi. The cheque on presentation was dishonoured by virtue of the memo dated 7. 4. 2000 with the remarks 'no account'. Thereafter, a statutory notice was served and since the payment was not forthcoming, the present complaint under Section 138 of the said Act was filed. The learned metropolitan Magistrate, after conducting trial, found the petitioner to be guilty of the offence under Section 138 of the said Act and, as indicated above, the petitioner being aggrieved by that decision preferred an appeal before the learned Additional Sessions judge, who concurred with the learned metropolitan Magistrate and upheld the conviction and sentence.

( 3 ) THE main contention raised by the learned Counsel for the petitioner before this Court is that in the background of the provisions of Section 23 of the Indian contract Act, 1872, the payment of money that was made by the complainant to the accused was not lawful and, therefore, no binding contract resulted there from. He referred to the provisions of Section 138 of the said Act, which reads as under:

"138. Dishonour of cheque for insufficiency, etc. , of funds in the accountwhere any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deenied to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both: provided that nothing contained in this section shall apply unless (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b ) the payee or the holder in due























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