The distinction between security cheques and existing debt or liability is crucial in determining the commission of an offence under Section 138 of the Negotiable Instrument Act.

JUDGMENT :

(Prayer: Criminal Original Petition filed under Section 482 Cr.P.C., praying to call for the records culminating in STC. No.1263 of 2018 dated 21.08.2018 on the file of the learned Judicial Magistrate, Tambaram and to quash the same.)

1. The private complaint filed by the respondent herein for an offence under Section 138 of the Negotiable Instrument Act, 1881 (hereinafter referred to as 'NI Act') is under challenge in the present Criminal Original Petition.

2. Heard Mr.S.Sivaraman, learned counsel for the petitioner and Mr.A.P.Sathyamurthy, learned counsel for the respondent.

3. The learned counsel for the petitioner would submit that the impugned complaint cannot be sustained since there is no legally enforceable debt under the cheque. According to the learned counsel, the agreement referred to in the complaint is only between the petitioner and 'RS Infotainment', wherein the cheques were issued only for security purposes, which ought not to have been deposited by the respondent herein. The learned counsel also submitted that the alleged payment of Rs.10 lakhs by demand draft and the balance amount of Rs.1,30,000,00/- by way of cash, is a blatant lie as such a huge amount cannot be given by way of cash. Even otherwise, the transactions between the petitioner and the respondent is a subject matter of a Civil Suit in C.S.No.637 of 2018, initiated by the petitioner herein.

4. The learned counsel relied upon the decision of the Hon'ble Apex Court in the case of State of Haryana and others V. Bajan Lal and others reported in AIR 1992 SC 604 and submitted that the averments in the complaint are absurd and inherently improbable on which basis, no just conclusion can be arrived at. The learned counsel also relied upon a decision of M/s.Indus Airways Pvt. Ltd., and others Vs. Magnum Aviation Pvt. Ltd., and others reported in 2014 (4) Scale 645 and submitted that security cheques cannot establish the existing debt or liability. The said decision has been followed by the Delhi High Court in Shivom Minerals Ltd., Vs. State (Delhi).

5. The learned counsel for the respondent submitted that the petitioner had borrowed a sum of Rs.1,40,000,00/- and executed a loan agreement along with promissory notes and had issued undated signed cheques as securities. Since the petitioner had defaulted in making the payments and on his instructions, the impugned cheque was presented. Pursuant to the dishonor of the impugned cheque, the procedure contemplated under the NI Act was duly followed and accordingly, the complaint came to be filed. In view of the same, there is a legally enforceable debt as against the impugned cheque and hence there is no illegality in the complaint.

6. I have given careful consideration to the submissions made by the respective counsels.

7. Before adverting to the submissions made by the respective counsels on the facts of the case, the legal position enunciated by the Hon'ble Apex Court in a series of decisions relating to the exercise of inherent powers of the High Court under Section 482 of the Criminal Procedure Code, places restrictions for intervention to pending criminal complaints. The Hon'ble Apex Court in Bajan Lal's Case (Supra) had formulated guidelines, for exercise of such powers under Section 482 of the Cr.P.C. A few of such guidelines for the purpose of this case, are when such a complaint does not prima facie constitute any offence when taken on their face value and accepted in its entirety; or the allegations and the evidence in support of the same do not disclose the commission of offence when the allegations in the complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused; or the criminal proceedings is maliciously instituted with an ulterior motive.

8. It is the submission of the learned counsel for the petitioner that the loan agreement dated 07.02.2018 is not an agreement a