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AVNEESH JHINGAN
Psa Nitrogen Limited – Appellant
Versus
Satia Industries Limited – Respondent
JUDGMENT
Avneesh Jhingan, J. (Oral) - This petition under Section 482 Cr.P.C. is filed for quashing of the complaint bearing No. NACT-152-2018, titled as "Satia Industries Ltd. v. PSA Nitrogen Ltd." and summoning order dated 23.5.2018.
2. The brief facts necessary for adjudication of the present petition are that the complainant-Satia Industries Ltd. placed a purchase order dated 13.7.2016 with the petitioner-company for design, engineering, supply, supervision of erection and commissioning of oxygen generator set. As per the payment clause, the petitioner had to give a cheque for Rs.37.20 lacs with an undertaking that the respondent can encash the cheque on failure of the petitioner to deliver equipment. The cheque was to be taken back on completion of successful commissioning.
3. In compliance of the payment clause, admittedly a cheque was issued by the petitioner to the complainant.
4. The complainant alleged that supply was not completed within time, as many items were not supplied and some of the items supplied were of lower capacity. Cheque No. 001474 for an amount of Rs.37,20,000/- issued by the petitioner was presented for encashment, as the petitioner failed to deliver the req
The main legal point established in the judgment is that the defence of a cheque being issued for security and not for discharge of debt or liability would be a triable issue and not a ground for qua....
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.
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 cheques were issued for a legally enforceable debt or as security is a matter for trial, not for quashing proceedings.
The burden to prove that a cheque was not issued in discharge of any debt or liability lies on the issuer during the trial, and the presumption in favor of the holder of the cheque can be rebutted by....
A cheque issued as security can incur liability under Section 138 if a legally enforceable debt exists at the time of its presentation.
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