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ILESH J. VORA
Sufi International Pvt Ltd – Appellant
Versus
Accurate Trans Heat Pvt. Ltd. Thro Kedarmal Mangilal Dargad – Respondent
JUDGMENT :
ILESH J. VORA, J.
1. By this application, filed under Article 226 and 227 of the Constitution of India read with Section 482 of Cr.P.C., whereby the original accused – Sufi International Private Limited and its Directors, seek quashing of the Criminal Case No.70729 of 2021, filed by the private respondent- company Accurate Trans Heat Private Limited under Section 138 of the Negotiable Instruments Act, 1881.
2. This Court has heard learned counsel Ms. Shailee Kapadia, Mr. Apurva Vakil with Mr. Jeet Karia and Ms. C.M. Shah for the respective parties.
3. The facts in brief are that, the private respondent- complainant is in business of whole wheat, sugar, rice and spices etc. The applicants-accused are exporter of whole wheat, sugar, rice etc.
By written agreement dated 11.11.2020, the parties have entered into business transaction and agreed to do business as per the terms and conditions of the contract.
During the period from 09.07.2020 to 31.03.2021, the private respondent sold the goods worth Rs.6,25,21,462/- to the applicants-accused. Against the total sale, the accused-company paid Rs.4,16,78,837/-. The total outstanding amount due after deducting TCS was Rs.2,08,68,924/-.
I
The court emphasized that the determination of whether cheques were issued for a legally enforceable debt or as security is a matter for trial, not for quashing proceedings.
Cheques issued as security can still be subject to Section 138 if a legally enforceable debt exists at the time of issuance.
The court emphasized that the determination of whether a cheque was issued for a legally enforceable debt or as security is a factual issue for trial.
The court emphasized that the determination of whether cheques were issued for a legally enforceable debt or as security is a matter for trial, not for quashing proceedings.
A legally enforceable debt must exist at the time of cheque presentation for liability under Section 138 of the N.I. Act to arise.
A cheque issued as security does not create criminal liability under Section 138 unless there is a legally enforceable debt at the time of its issuance.
The court held that a cheque issued as security does not invalidate a complaint under Section 138 of the Negotiable Instruments Act, and factual disputes must be settled at trial.
Point of Law : Inherent jurisdiction under Section 482 Cr.P.C. though wide, has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specificall....
(1) Dishonour of cheques – Under Section 138 of NI Act, a separate cause of action arises upon each dishonour of a cheque provided statutory sequence of presentation, dishonour, notice, and failure t....
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