The main legal point established is that the determination of whether a cheque was issued for an existing due or as security depends on the ascertained and crystallised debt or other liability existing on the date when the cheque is presented for payment.

Vipin Sanghi, J.

Crl.L.P. 234 of 2015

1. Leave granted.

Crl. Appeal No. /2016 (to be numbered and registered)

2. Let the appeal be numbered and registered.

3. With the consent of parties, I have heard learned counsels and proceed to judgment.

4. The appellant has preferred the present appeal to assail the judgment dated 02.01.2015 passed by the learned MM-02, South, Saket Courts, New Delhi, whereby the appellant’s complaint being CC No.642/1 under Section 138 of the Negotiable Instruments Act has been dismissed, and the respondent accused acquitted.

5. The case of the appellant was that the appellant is a company registered under Section 25 of the Companies Act, sponsored by the Government of India through the Ministry of Textiles. The appellant is looking after the matters relating to export of readymade garments from India to other countries. The appellant administers the Garment Export Policy issued by the Government of India from time to time. The further case of the appellant is that every exporter, who intends to export readymade garments from India, has to register with the complainant No.1 and a registration certificate is granted by complainant No.1 in favour of the exporter.

6. The case of the appellants/ complainants is that the accused No.1 company, whose Managing Director and Director are accused No.2 & 3, is registered with complainant No.1 vide registration certificate No.45836 issued by complainant No.1. Respondents/ accused No.2 & 3 were the Directors of the accused company responsible for the conduct and business of accused No.1 at the relevant time. They had issued the cheques in question for the amounts of Rs.1,10,016/-, Rs.10,00,000/- and Rs.40,660/-, all dated 01.06.2005 drawn on Bank of Rajasthan Limited, Naraina Branch, New Delhi in favour of the complainant for the purpose of allocation of export quota, revalidation and utilisation thereof. The said cheques were dishonoured upon presentation due to the bank account being closed vide memo dated 30.11.2005. The appellant issued a legal demand notice dated 06.12.2005. The same was served on the accused by registered post on 13.12.2005. Despite lapse of stipulated period of 15 days, the demand was not met and, consequently, the complaint was preferred.

7. The defence of the accused persons was that the said cheques had been issued towards security, and that the accused was not liable to make payment of the dishonoured cheques. Complainant No.2, the Director of complainant No.1 was examined as the complainant’s witness. During his cross-examination, he deposed that the cheques in question were taken with the stipulation of security - that if the accused company fulfils its export obligations, then the cheques will not be used, and in case the accused company fails to meet its export obligations, then the cheques will be encashed.

8. At this stage it is important to note that this witness admitted that on the date of issuance of the cheques in question, there was no determined liability of the accused persons. I may also observe that according to the appellant, this admission made by the complainant’s witness was contrary to the record, as the determination of liability of the accused had been made by the Assistant Director Balwant Singh by a speaking order dated 01.10.2005, and the quantified liability was Rs.3,32,876/-. According to the appellant, the said order was carried in appeal by the accused company and the said appeal was also eventually dismissed on 08.03.2007 vide order No.14/17/2007–IT passed by the 2nd Appellate Committee of the Government of India, Ministry of Textiles. I may observe that these documents were not led in evidence in the Trial Court and are not part of the Trial Court Record. However, they have been tendered by learned counsel for the appellant along with list of documents on 14.09.2016 and taken on record.

9. The Trial Court in its impugned judgment relied upon the decision of this Court in Rameshwar Dass Devi Dayal (P) Ltd. Vs.