BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
K. MURALI SHANKAR, J.
A. Gnanasekeran - Appellant
Versus
A. Vijayasekaran - Respondent
Crl.O.P. (MD) No. 14088 of 2019 & Crl.M.P. (MD) No. 8575 of 2019
Decided On : 16-09-2022
Negotiable Instruments Act - Family Arrangement - Sections 138, 142 - M.M.T.C. Ltd and another Vs. Medchl Chemicals and Pharma (P) Ltd., (2002)1 Supreme Court Cases 234 - Rathish Babu Unnikrishnan Vs. The State (Government of NCT of Delhi) and another, Crl.A.Nos.694-695 of 2022 - The court discussed the legal provisions of Sections 138 and 142 of the Negotiable Instruments Act and the legal presumption of the cheque having been issued in the discharge of liability. The court emphasized that the burden of proving that there was no existing debt or liability was on the accused and that this burden had to be discharged at the trial. The court also highlighted that the exercise of powers under Section 482 Cr.P.C., to quash the proceedings is an exception and not a rule and that inherent jurisdiction under Section 482 Cr.P.C., though wide, has to be exercised sparingly, carefully and with caution, only when justified by tests specifically laid down in the Section itself.
Fact of the Case:
The petitioner, accused of issuing a dishonored cheque, claimed that there was no subsisting legal liability to issue the cheque and that the alleged cheque was left in the office for urgent needs when the petitioner was away from the headquarters. The respondent, on the other hand, claimed that the cheque was issued towards payment of owelty as per a family arrangement.
Finding of the Court:
The court found a prima facie case against the petitioner at this stage and concluded that the Criminal Original Petition was devoid of merits. The court directed the Judicial Magistrate to complete the trial and dispose of the case expeditiously.
Issues: The issues revolved around the validity of the cheque issued by the petitioner and the existence of a legally enforceable debt or liability. The court also addressed the exercise of powers under Section 482 Cr.P.C., to quash the proceedings.
Ratio Decidendi: The burden of proving that there was no existing debt or liability was on the accused and had to be discharged at the trial. The court emphasized that the exercise of powers under Section 482 Cr.P.C., to quash the proceedings is an exception and not a rule and that inherent jurisdiction under Section 482 Cr.P.C., though wide, has to be exercised sparingly, carefully and with caution, only when justified by tests specifically laid down in the Section itself.
Final Decision: The Criminal Original Petition was dismissed, and the Judicial Magistrate was directed to complete the trial and dispose of the case expeditiously.
JUDGMENT
(Prayer: Criminal Original Petition has been filed under Section 482 Cr.P.C, to call for the records relating to the complaint dated 15.07.2019 under Section 138 and 142 of the Negotiable Instruments Act, in S.T.C.No.997 of 2019 on the file of the Judicial Magistrate No.I, Sivakasi and quash the same.)
1. This Criminal Original Petition has been filed, invoking Section 482 Cr.P.C., seeking orders to call for the records pertaining to the case in S.T.C.No. 997 of 2019, pending on the file of the Court of Judicial Magistrate No.I, Sivakasi and quash the same.
2. The petitioner is the sole accused and the respondent has filed a private complaint under Section 200 Cr.P.C., against the petitioner for the offences under Section 138 r/w 142 of the Negotiable Instruments Act. Admittedly, the petitioner and the respondent are blood brothers. It is not in dispute that their father Ayyanathan had 9 children viz., Rajasekaran, Chandrasekaran, Suriyaprabha, Gunasekaran, A.Vijayasekaran (complainant), A.Gnanasekaran (Accused), Chandraprabha, Rathnaprabha and Dhanasekaran, that their brother Chandrasekaran died on 25.03.1991 and their father died on 06.06.2002 and that after separation of some brothers, the complainant, the accused and Dhanasekaran were carrying on their family business. It is also not in dispute that the accused was the Chairman of Sivakasi Municipality for two period.
3. The case of the complainant is that when the complainant, the accused and their brother Dhanasekaran were managing their business, in order to protect and safeguard the family name and family business, had chosen to go for several rounds of discussions and mediations from July 2016 in the presence of their friends and well wishers of the family and that after several round of discussions, an oral family arrangement was reached mutually between the members of the joint family on 23.08.2017 and the oral partition list was prepared in the first week of March 2018 and the same was signed by all the three brothers before the witnesses, that thereafter, by confirming the oral family arrangement, a memorandum of partition was entered on 26.04.2018 wherein the complainant, the accused and Dhanasekaran and all their family members had signed in the memorandum accepting the oral partition arrangement effected on 23.08.2017, that as per the said family arrangement, the members of the joint family had agreed to obtain the sale deed in the name of the accused relating to the properties situated in S.No.303/1 of Aranvoyal Village, Thiruvallur Taluk, that the entire sale consideration for the purchase of the said property was made prior to the partition and after the partition out of the funds from the Safire Offset Printers concern and that in order to have the equality of allotment of properties and in view of the purchase of the above property at Thiruvallur, the accused on 25.06.2018 consented to compensate by paying Rs.5,18,50,000/- as owelty to the complainant.
4. It is the further case of the complainant that the accused had issued a cheque bearing No.229729, dated 20.04.2018 drawn on Tamil Nadu Mercantile Bank Ltd., Sivakasi towards payment of owelty, that the accused had subsequently informed that he is not able to raise the funds and honour the cheque and had received the cheque back and issued another post dated cheque on 20.05.2018 bearing No.229730, dated 11.02.2019 drawn on Tamil Nadu Mercantile Bank Ltd., Sivakasi in favour of the complainant for Rs.5,18,50,000/- that the complainant has then presented the cheque for collection in Tamil Nadu Mercantile Bank, Sivakasi on 08.05.2019 for CTS transfer, that the cheque was returned as dishonoured for want of sufficient funds in the bank account of the accused, that the complainant has then sent a legal notice dated 06.06.2019 to the accused, demanding the payment of the amount covered by the cheque, that the accused having received the notice on 07.06.2019 sent a reply dated 14.06.2019 with all sorts of fal
AI
The burden of proving the absence of a legally enforceable debt or liability in a case involving a dishonored cheque lies with the accused and must be discharged at the trial. The exercise of powers ....
Section 138 NI Act proceedings cannot be quashed at a pre-trial stage when statutory requirements are met, as the question of legally enforceable debt must be examined only at trial under the Section....
The legal provisions of the NI Act create a deeming offence for dishonour of cheques and establish a presumption of debt or liability upon the holder of the cheque, with a reverse onus cast on the ac....
There is no disputes with regard to the signature on the cheuqe and her defence is that the brother-in-law had obtained her signature under the pretext that for emergency purpose this would be requir....
Dishonour of cheque – Jurisdiction under Section 482 of Cr.P.C. or Article 226 Constitution of India is requires to be exercised in circumspection and sparingly.
A person who is not a signatory to the cheque cannot be prosecuted under Section 138 of the Negotiable Instruments Act, 1881, for the offence of dishonour of cheque for insufficiency of funds.
Vicarious liability under Section 141 of the Negotiable Instruments Act can only be imposed when the partner is in overall control of the day-to-day business of the firm, and the drawer of the cheque....
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.