The main legal point established in the judgment is that a cheque is presumed to be received for the discharge of any debt or other liability unless the contrary is proved, as per the provisions of the Negotiable Instruments Act.

SURESH KAIT, J.

1. Vide the present petition, the petitioner is seeking quashing of the complaint filed by the respondent No. 2 for the offence punishable under Section 138 of the Negotiable Instruments Act, for the reasons that the said compliant is not maintainable as the cheque in question, presented and was dishonoured, was issued towards Security and not towards any lawful outstanding debt or dues.

2. The brief facts of the case are that the petitioner No.1 and respondent No. 2 entered into an agreement dated 19.02.2010, in respect of supply of Iron-ore to one M/s Glencore International A.G., a company in Switzerland. As per the agreed terms, the petitioners with a covering letter, contemporaneously executed three documents in favour of respondent No. 2, wherein, it was specifically mentioned that the three documents were being executed by the petitioners as Security for Mobilisation Advance. The details of the three documents executed by the petitioners are as under:-

A Promissory Note dated 19.02.2010 for Rs.2.50Crores;

B Cheque bearing No. 909722, dated 19.02.2010 for Rs.2.50Crores; and

C Bank Guarantee dated 19.02.2010 for Rs.1.25Crores.

3. The respondent No. 3 on receipt of Security Documents i.e. Cheque, Promissory Note and Bank Guarantee from the petitioners and got released Rs.2.50Crores from its banker in favour of the petitioner on 22.03.2010. The respondent No. 2 presented the Cheque bearing 909722 dated 19.02.2010 for a sum of Rs.2.50Crores.

4. The respondent No. 2 received a Memo dated 08.08.2010 from its Bankers with the endorsement “Exceed Arrangements”. The respondent No. 2, allegedly got issued Notice dated 26.08.2010 to the petitioners, which was dispatched on 27.08.2010.

5. Mr. Kailash Vasudev, learned Sr. Advocate appearing for the petitioners submitted that the aforementioned legal notice was duly served upon the petitioners on 31.08.2010, thereafter, the respondent filed a complaint under Section 138 Negotiable Instruments Act in the court of learned CMM, Tis Hazari Courts, Delhi, vide CCNo. 648/RN/10. The trial court took cognizance on 16.11.2010, after considering the Pre-summoning-evidence of the complainant/ respondent No. 2 and issued summons to the petitioners.

6. On 09.02.2011, the petitioners appeared before the trial court through counsel, when the matter was adjourned to 06.07.2011 for appearance of the petitioners, framing of notice and recording of plea of defence, if any.

7. Ld. Sr. counsel submitted that the petitioners are aggrieved by the aforesaid complaint, hence, filed the instant petition on the ground that the aforesaid cheque was issued as a Security only and not towards any lawful debts or dues. To strengthen his arguments, learned counsel has relied upon a case of M.S. Narayana Menon @ Mani v. State of Kerala and Anr. AIR 2006 SCC 3366, wherein, the Apex court has observed as under :-

“57. We in the facts and circumstances of this case need not go into the question as to whether even if the prosecution fails to prove that a large portion of the amount claimed to be a part of debt was not owing and due to the complainant by the accused and only because he has issued a cheque for a higher amount, he would be convicted if it is held that existence of debt in respect of large part of the said amount has not been proved. The Appellant clearly said that nothing is due and the cheque was issued by way of security. The said defence has been accepted as probable. If the defence is acceptable as probable the cheque therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act.”

8. In another case of Sudhir Kumar Bhalla v. Jagdish Chand and Ors (2008) 7 SCC 137, the Apex court has observed as under :-

“22. On examination of the above-stated findings of the learned Single Judge in the judgment impugned before us, we find