IMPORTANT POINT
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.

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.70720 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/-.

It is the case of private respondent that, against the aforesaid due amount, the applicant-accused issued two cheques amounting Rs.22,09,680/- and Rs.25,38,000/- allegedly signed by the accused nos.2 and 3. The cheques were presented for clearing before the bank and due to insufficient funds, same returned unpaid.

The demand notice dated 02.06.2021 was served upon the applicant-accused. In the reply of the notice dated 10.06.2021, it was stated that, the cheques were given as a security for payment and not issued to discharge the outstanding debt and/or liability. It was further stated in the reply that, the amount mentioned in the cheques already paid by RTGS mode, however, inadvertently, at relevant time, the accused could not obtain the cheques from the private respondent-company.

In such set of circumstances, within stipulated time, the private respondent company filed a complaint under Section 138 of the N.I. Act. The Court of Judicial Magistrate, Surat issued summons to the applicants- accused.

5. Being aggrieved with the issuance of summons, the applicants-accused are before this Court by preferring the present quashing petition.

6. Ms. Shailee Kapadia, learned counsel appearing for and on behalf of the applicants-accused has made the following submissions:

(i) That the complaint under Section 138 of N.I. Act is not maintainable since the cheques were issued by way of security and not against outstanding dues. That, the cheques were given at the time of purchase of goods against the specific invoices as a security for payment and thereafter, the payment of the particular invoices raised by the complainant-company was made through RTGS mode which was reflected in the ledger accounts maintained by both the parties. In the ledger account, the amount of cheques tellied with each entry and therefore, so far amount mentioned in the cheques are concerned, no any amount is due as it was paid through RTGS mode. That, inadvertently, the accused did not ask the complainant to return the cheques and thus, by retaining the said cheques, the private respondent taking disadvantage of situation, presented it for encashment and thereafter, by resorting criminal machinery, the false case under the provisions of Section 138 of N.I. Act is being filed.

(ii) That, the cheques in question issued as a security for the payment against the particular invoices and when the payment for the same was done through RTGS mode, the cheques could not have been utilized towards the other purchase orders or outstanding dues as alleged in the complaint.

7. In view of aforesaid contentions, learned counsel Ms. Shailee Kapadia would urge on behalf of the accused that, once the payment was made through RTGS mode for which the cheques were issued, their exist no legal recoverable debt and the