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2015 Supreme(Del) 803
High Court of Delhi
VIPIN SANGHI, J.
Suresh Chandra Goyal – Petitioner
Versus
Amit Singhal – Respondent
CRL. L.P. No. 706 of 2014
Decided On : 14-05-2015
Advocate Appeared:
For the Petitioner:Kshitij Sharda, Advocate.
For the Respondent:Aman Bhalla, Advocate.
A cheque issued as security would not come within the purview of Section 138 of the Act, if it is issued for security or for any other purpose.
Headnote:
NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 138 - DISHONOUR OF CHEQUE - COMPLAINT - MAINTAINABILITY - SECURITY CHEQUE - MEANING AND SCOPE - DISTINCTION BETWEEN CHEQUE ISSUED IN DISCHARGE OF DEBT AND CHEQUE ISSUED AS SECURITY - INTERPRETATION OF MOU - EVIDENCE ACT, 1872 - SECTIONS 91 & 92 - APPLICABILITY - PRESUMPTION UNDER SECTION 118 AND 139 OF NI ACT - REBUTTAL - STANDARD OF PROOF - CRIMINAL APPEAL - SCOPE OF INTERFERENCE - VERY SUBSTANTIAL AND COMPELLING REASONS - GROUNDS.
Fact of the Case:
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: “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.” 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/-.
Finding of the Court:
The impugned judgment is set aside. The accused is convicted of the offence under Section 138 of the NI Act.
Issues: 1. Whether the complaint of the appellant was maintainable under Section 138 of the NI Act since the cheques in question were “security cheques”? 2. Whether the approach of the learned Magistrate was completely misdirected in law, in proceeding to examine the issue whether the debt in question was owed by the accused to the appellant/complainant? 3. Whether the finding returned by the learned Magistrate on the said issue is clearly contrary to the terms of the MOU (Ex. CW-1/4), and certainly cannot be sustained? 4. Whether the defence set up by the accused that his outstanding liability was Rs.60,000/-, and not Rs.1.5 lakhs is merely an ipsi dixit of the accused?
Ratio Decidendi: 1. The expression “security cheque” is not a statutorily defined expression in the NI Act. The NI Act does not per se carve out an exception in respect of a ‘security cheque’ to say that a complaint in respect of such a cheque would not be maintainable. 2. There can be mirade situations in which the cheque issued by the accused may be called as security cheque, or may have been issued by way of a security, i.e. to provide an assurance or comfort to the drawee, that in case of failure of the primary consideration on the due date, or on the happening (or not happening) of a contingency, the security may be enforced. 3. While in some situations, the dishonor of such a cheque may attract the penal provisions contained in Section 138 of the Act, in others it may not. 4. A cheque issued as security would not come within the purview of Section 138 of the Act, if it is issued for security or for any other purpose. 5. The mere fact that the cheque may be blank in some or all respects (except that it bears the signatures of the drawer), and the blanks may have been filled in by the drawee subsequently, that by itself does not invalidate the cheque. It cannot be said that a complaint under Section 138 NI Act would not lie in respect of such a cheque, consequent upon its dishonor for reason of insufficient funds. 6. The defence that the cheques in question Ex. CW-1/1, CW-1/2 and CW-1/3 were issued as “security” cheques has no force in the facts and circumstances of this case, as, on the date when the said cheques were issued simultaneously with the execution of the MOU (Ex. CW-1/4), the debt of Rs.1.5 lacs was outstanding. The appellant was well within his rights to enforce the security in respect whereof the cheques in question were issued and to seek to recover the outstanding debt by encashment of the said cheques.
Final Decision: The impugned judgment is set aside. The accused is convicted of the offence under Section 138 of the NI Act.
VIPIN SANGHI, J.
1. 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:
“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.CW-1/4) itself reflects the debt o
