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IN THE HIGH COURT OF DELHI
Pratibha Rani, J
M/S. IKF TECHNOLOGIES LTD. AND OTHERS - Appellant
Vs.
SASI BHUSAN RAJU - Respondent
Criminal M.C. 4687-90 of 2006
Decided On : 17-12-2012
For the Appellant : Chetan Sharma, with Mr. Sushil K. Pandey
For the Respondent: R.K. Sharma
The central legal point established in the judgment is that for an offense under Section 138 of the N.I. Act, the dishonored cheque must be issued in discharge of an existing debt or liability, and the absence of such discharge influenced the court's decision to quash the summoning order.
Headnote:
N.I. Act - Cheque Issuance - 138 - Summary of Acts and Sections: N.I. Act, Section 138 - The court analyzed the issuance of a cheque in discharge of existing debt or liability under Section 138 of the N.I. Act. The key legal provisions and their interpretations were crucial in determining whether the cheque in question was issued to meet an existing debt or liability, influencing the court's decision to quash the summoning order.
Fact of the Case:
The respondent alleged that the petitioner company did not honor the agreement, leading to harassment. The respondent received a post-dated cheque, which was dishonored, leading to the filing of a complaint under Section 138 of the N.I. Act.
Finding of the Court:
The court found that the cheque was not issued in discharge of any existing debt or liability, as the amount claimed was based on damages and not a debt. The court also highlighted the lack of settlement or meeting to discuss the amount payable, leading to the quashing of the summoning order.
Issues: The key issue was whether the cheque was issued in discharge of an existing debt or liability, as required under Section 138 of the N.I. Act.
Ratio Decidendi: The court's decision was influenced by the interpretation of the legal provisions under Section 138 of the N.I. Act, emphasizing that the cheque was not issued to meet an existing debt or liability.
Final Decision: The summoning order dated 20.05.2006 passed by the learned M.M. in Complaint Case No. 2819/1/06 filed under Section 138 of the N.I. Act was quashed, and the petition was allowed.
Pratibha Rani, J.
By this petition u/s 482 Cr.P.C., the petitioners seek quashing of summoning order dated 20.05.2006 passed by learned M.M. in Complaint Case No. 2819/1/06 filed u/s 138 of N.I. Act by the respondent (complainant), who himself was Director in M/s IKF Technologies Ltd./petitioner No. 1 company herein. The question required to be dealt with in this petition is whether the cheque in question was issued in discharge of existing debt or liability so as to attract criminal action u/s 138 of NI Act.
2. In brief the case of respondent, as made out in the complaint C.C. No. 2819/1/06 filed by him, is that on 07.07.2005 petitioner No. 1/company entered into MOU with the respondent which was signed on behalf of company by its representative and whole time Director Mr. Sunil Kumar Goel and by the respondent. The respondent was appointed as Chief Executive Officer (CEO) for management of the project Jatropa Plantation in Meghalaya.
3. As per Clause (vii) of the MOU the respondent was to receive :
(a) 10% share from the profits of the project of Jatropa Plantation Project or any other such profit as and when acquired by company even before the actual tentative period of two years. This profit and 10% which may be paid to Shri Raju or his nominee by virtue of power of attorney. This will continue till the project lasts.
(b) Salary Rs. 25,000/- p.m. will be paid which is subject to review by the Board of Management from time to time as per the exigencies of the responsibilities.
(c) Shri Raju shall be entitled to draw actual expenses as such travelling, boarding, incidentals, telephones, Insurance etc.
4. It is the case of the respondent/complainant that he worked for the company but the company did not honour the agreement to run the project successfully thus putting the respondent/complainant to harassment. The respondent/complainant served a legal notice dated 29.12.2005 demanding his salary till his superannuation and future share profit of the project which came around jointly to Rs. 1,36,20,000/-. The respondent/complainant received post dated cheque bearing No. 692299 dated 23.02.2006 drawn on ICICI Bank Ltd., which was dishonoured on presentation for the reason 'insufficient funds'. After serving statutory notice dated 13.03.2006, complaint u/s 138 N.I. Act was filed.
5. It is further averred in the complaint that in the meantime the respondent received reply dated 31.01.2006 to the legal notice dated 29.12.2005 sent by him and in the reply the respondent/complainant was asked to resume the duties. Thereafter he received another reply dated 29.03.2006 from the company handed over by his own counsel as well as through registered post and speed post. The above replies sent by the company are self-contradictory and inconsistent to the cheque in question dated 23.02.2006.
6. The respondent led pre-summoning evidence by way of affidavit in Complaint Case No. 2819/1/06. On finding prima facie that offence u/s 138 N.I. Act is made out against the petitioners who were arrayed as accused in the complaint case, they were ordered to be summoned for committing offence u/s 138 N.I. Act.
7. I have heard Sh. Chetan Sharma, Senior Advocate for the petitioner and Sh. R.K. Sharma, Advocate for the respondent. Both parties have also filed brief synopsis.
8. On behalf of the petitioner it has been submitted that the respondent was appointed as Chief Executive Officer for Jatropa Plantation Project in Meghalaya as per MOU dated 07.07.2005. The respondent committed certain irregularities and vide communication dated 13.10.2005, those irregularities were pointed out to him instructing him to do the needful on war footing and submit the progress report.
9. The learned Senior Advocate further submitted that instead of doing the needful, the respondent sent a notice dated 29.12.2005 which was duly replied vide reply dated 31.01.2006 wherein it was specifically pointed out that company had suffered huge loss due to delay in implementation of the
