A legally enforceable debt is essential for liability under Section 138 of the Negotiable Instruments Act; cancellation of the underlying contract negates such liability.

JUDGMENT

Mr. Jasgurpreet Singh Puri, J.

The present application has been filed under Section 378(4) Cr.P.C. seeking leave to appeal against the judgment dated 12.01.2016 passed by the learned Sessions Judge, Ambala, whereby the respondent has been acquitted.

2. The present applicant, namely, Ranbir Singh @ Randhir Singh filed a complaint against the respondent, namely, Navneet Chauhan under section 138 of the Negotiable Instruments Act, 1881 pertaining to a cheque of Rs.38,00,000/-. The learned Judicial Magistrate 1st Class, Ambala convicted the respondent in the aforesaid complaint vide judgment dated 14.01.2015 and vide separate order dated 17.01.2015, sentenced him to undergo rigorous imprisonment for a period of two years and to pay the cheque amount of Rs.38,00,000/- with interest at the rate of 9% per annum from the date of filing of the complaint till its realization. Thereafter, the respondent-accused preferred an appeal before the learned Sessions Judge, Ambala, wherein vide judgment dated 12.01.2016, the learned Sessions Judge, Ambala set aside the judgment of conviction dated 14.01.2015 and order of sentence dated 17.01.2015 passed by the Judicial Magistrate 1st Class, Ambala and acquitted the respondent-accused of the charges while accepting the appeal. Now the present applicant, who is a complainant has filed this application under Section 378(4) Cr.P.C. seeking leave to appeal against the judgment dated 12.01.2016 passed by the learned Sessions Judge, Ambala.

3. Learned Senior Advocate appearing on behalf of the applicant submitted that it is a case where a cheque was issued by the respondent-accused, which is not in dispute in the present case and the signatures on the cheque issued by the respondent-accused is also not in dispute and therefore a statutory presumption arose in favour of the applicant-complainant which has not been adequately rebutted by the respondent and therefore the Judicial Magistrate 1st Class, Ambala has rightly convicted the respondent of the charges. He further submitted that the respondent-accused had issued the aforesaid cheque amounting to Rs.38,00,000/- as a security and his liability was co-extensive in case the money was not returned by the persons regarding whom the security was ensured. He further submitted that a cheque of security is equally enforceable being a co-extensive liability and therefore it cannot be said that the respondent did not have any liability to pay. He also submitted that the reason for issuance of a security cheque by the respondent was that in pursuance to an agreement to sell between the applicant-complainant and three other persons who were the owners of the land, an earnest money was paid to the tune of Rs.96,00,000/- and for ensuring the execution of sale deed the aforesaid cheque was issued which therefore became a legally enforceable debt. He further submitted that even if the respondent-accused acted as a guarantor, he was liable under the provisions of Negotiable Instruments Act, 1881 in case the cheque issued by him was dishonoured due to insufficiency of funds or any other relevant reason under the law especially in view of the fact that when he has himself admitted the issuance of the cheque and his signatures are also not in dispute. He further submitted that it is not material as to whether the cheque was issued for his own personal liability or for some others' personal liability and the liability is covered within the parameters of section 138 of the Negotiable Instruments Act, 1881. He has referred to a judgment of the Hon'ble Supreme Court in I.C.S.D. Limited v. Beena Shabeer and another , 2002 (6) SCC 426 and submitted that even qua the guarantor, liabili