IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Sureshwar Thakur, J.
Amandeep Kaur - Appellant
Versus
Sarvesh Kumar And Anr - Respondent
CRM-M-9268-2021 (O&M)
Decided On : 21-02-2022
Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Summary of Acts and Sections: Section 138 of the Negotiable Instruments Act - The court discussed the legal provisions of Section 138 of the Act, emphasizing the requirement of a legally enforceable debt or other liability arising from a valid commercial transaction. The court highlighted the importance of a valid mercantile contract and the necessity of a valid commercial relationship among the contracting parties for the enforcement of the statutory provisions. The judgment also referenced the principle of cause of action and the inability to transfer contractual liabilities through compromise.
Fact of the Case:
The petitioner sought quashing of a summoning order and complaint under Section 138 of the Negotiable Instruments Act. A compromise occurred between the complainant, the petitioner, and the petitioner's brother, leading to a subsequent complaint against the brother. The petitioner argued that the initial complaint should be quashed due to the compromise and the dishonoured instrument being issued by the brother.
Finding of the Court:
The court disagreed with the petitioner's submission, emphasizing the statutory language of Section 138 and the necessity of a valid commercial relationship for enforcing the provisions. The court held that the initial complaint was amenable for assumption of cognizance and the summoning order was valid, as the complainant had a surviving cause of action against the petitioner.
Issues: The issues revolved around the validity of the initial complaint under Section 138 in light of the compromise and the dishonoured instrument being issued by the petitioner's brother.
Ratio Decidendi: The court emphasized the requirement of a valid mercantile contract and a valid commercial relationship among the contracting parties for the enforcement of Section 138. It highlighted the principle of cause of action and the inability to transfer contractual liabilities through compromise.
Final Decision: The petition was dismissed, and the court held that there was no merit in the petition.
JUDGMENT
Sureshwar Thakur, J. (Oral) - Against the petitioner, complaint bearing No.COMA-59-2016 of 23.03.2017 became instituted before the learned JMIC, Ludhiana. The complaint (supra), was cast under the provisions of Section 138 of the Negotiable Instruments Act (hereinafter referred to as the Act). The learned Magistrate concerned, after perusing the preliminary evidence, as became adduced qua the complaint (supra), proceeded to make a summoning order, upon, the petitioner herein.
2. The petitioner becomes aggrieved from the summoning order, issued upon her, and, has prayed for the quashing of the summoning order made on 04.01.2016 hence appended as Annexure P-2, with the instant petition.
Moreover, the petitioner has also asked for the quashing of the complaint (supra).
3. During the pendency of the complaint (supra), admittedly a compromise occurred inter-se the complainant, and, the petitioner herein, and, also with one Gurmeet Singh, the real brother of the petitioner herein. In the afore drawn compromise, the real brother of the petitioner herein, namely Gurmeet Singh, undertook to discharge the liabilities, as became encumbered, upon the petitioner herein, and, as arises from the issuance of the dishonoured negotiable instrument(s), to the complainant by the petitioner. Though, in pursuance to the afore made compromise, rather one Gurmeet Singh purportedly for discharging the there through(s) encumbered liability upon him, hence issued a negotiable instrument to the complainant. However, upon its presentation before the bank concerned, it became dishonoured. Consequently, the complainant was led to institute against him a complaint bearing No.COMA/321/2019, before the learned JMIC Ludhiana. Even in the complaint (supra), the learned Magistrate concerned, made summoning orders, upon Gurmeet Singh. However, Gurmeet Singh has neither challenged the summoning order nor has asked for the quashing of the complaint (supra), through his making a motion before this Court.
4. The learned counsel for the petitioner has, with the most profound legal wisdom, made a vehement submission before this Court, that the initially cast complaint against the petitioner is amenable for being quashed, and, set aside. The reason which he advances, for supporting the afore submission is rested, upon the factum, that since in pursuance to the compositely drawn compromise amongst all concerned, rather the negotiable instrument concerned, became issued to the complainant by one Gurmeet Singh, the real brother of the petitioner, and, that when upon presentation whereof before the bank concerned, it became dishonoured, and, thereupon resulted in a subsequent complaint, being instituted against him, before the learned Judicial Magistrate concerned. Yet, he submits, that the initial complaint bearing No.COMA-59-2016 of 23.03.2017, is not amenable either for assumption of valid cognizance thereon nor can progress for adduction of evidence thereons, and, rather merges into the compromise drawn amongst all concerned, and, also into the subsequent complaint instituted against one Gurmeet Singh, who had in pursuance of compromise (supra), hence issued a dishonoured negotiable instrument, to the complainant.
5. He also submits, that the afore factual events, would bring to the force, the factum of the petitioner being unnecessarily harassed, and, humiliated, if she is to face trial qua a notice of accusation, for an offence under Section 138 of the Act. This Court, has considered the afore made submission. However, for the reasons to be assigned hereinafter, this Court is in painful disagreement, with the afore made submissions before this Court, by the learned counsel for the petitioner. The reason being that the learned counsel for the petitioner, has remained unmindful, to the import of the statutory language cast, in Section 138 of the Act. The relevant ingredients whereof are extracted hereinafter.
'138 Dishonour of cheque for insufficiency, etc., of fund
The central legal point established in the judgment is the requirement of a valid commercial relationship and a valid mercantile contract for enforcing the provisions of Section 138 of the Negotiable....
Dishonour of a cheque under Section 138 is actionable regardless of claims of stop payment or misplaced cheque, with legal presumptions favoring existence of debt or liability.
Dishonour of a cheque due to insufficient funds constitutes an offence under Section 138 of the N.I. Act, regardless of claims of theft, unless the evidence at trial proves otherwise.
The legal presumption under Section 139 of the NI Act favors the complainant, and factual disputes must be resolved at trial, not pre-trial.
The presumption of a legally enforceable debt under the Negotiable Instruments Act remains until disproven, and the determination of such issues is a matter for the trial court.
A cheque issued for repayment of money, even if initially related to an employment agreement, can constitute a legally enforceable liability under Section 138 of the Negotiable Instruments Act.
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