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2023 Supreme(All) 2436

IN THE HIGH COURT OF ALLAHABAD
RAJIV GUPTA, J.
Mahendra Singh Ravat - Applicant
Versus
State of U.P. and Another - Opposite Parties
APPLICATION UNDER SECTION 482 NO. - 28554 OF 2023.
Decided On : 07-08-2023

Advocates appeared:
For the Applicant : Shiva Tripathi.
For the Opposite Party : G.A.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Dishonour of cheque - The applicant's argument that the cheque was issued as a security and that no debt exists cannot be considered at this stage. Legal presumption under Section 139 applies, maintaining the validity of the allegation of cheque dishonour. (Paras 6, 9, 10)

(B) Criminal Procedure Code, 1973 - Sections 200 and 202 - Preliminary inquiry for summoning - Magistrate's decision to summon the applicant based on the complaint and preliminary examination is upheld, as no illegality exists in the refusal to quash. (Paras 5, 9)

Facts of the case:
The applicant issued a cheque for Rs.20.00 lacs, which was dishonoured. A complaint was filed under Section 138 of the Negotiable Instruments Act after the applicant failed to make the payment following a legal notice.

Findings of Court:
The Magistrate's order summoning the applicant to face trial under Section 138 does not suffer from any legal error.

Issues: The primary issue addressed is whether proceedings under Section 138 could be maintained despite the applicant's claim of the cheque being issued as a security.

Ratio Decidendi: The court affirmed the position that the existence of a debt or liability is presumed in cheque dishonour cases, and such matters will be determined during trial. The issuance of a cheque as security does not exempt one from liability under Section 138.

Result: Application under Section 482 dismissed.

Table of Content
1. application for quashing complaint under section 138. (Para 2 , 3 , 4 , 5)
2. cheque issued as security; no liability claimed. (Para 6)
3. state argues for legal validity of summoning order. (Para 7 , 8)
4. court confirms validity of summoning order. (Para 9 , 10 , 11)
5. application dismissed for lack of merit. (Para 12)

JUDGMENT

Rajiv Gupta, J.

Heard learned counsel for the applicant, learned AGA for the State and perused the record.

2. This application under Section 482 Cr.PC has been filed by the applicant for quashing the entire proceedings of complaint case no. 1272 of 2019, under section 138 of N.I. Act P.S. Chhapar, District Muzaffar Nagar, pending in the court of C.J.M/Special Court, N.I. Act., Muzaffar Nagar.

3. As per the allegations made in the complaint, it is alleged that the applicant had issued a cheque bearing no. 608249 dated 16.9.2019 in favour of the Opposite Party No.2 for an amount of Rs.20.00 lacs. On presentation of the said cheque before the Bank, it was dishonoured and returned back.

4. After dishonour of the cheque, a legal notice was sent to the applicant to make good the payment of the cheque amount, however, despite being noticed, the applicant has not made good the payment of the cheque amount, as such, a complaint under section 138 of Negotiable Instruments Act has been filed by the Opposite Party No.2 against the applicant.

5. On the basis of the said complaint, learned Magistrate, after considering the allegations made in the complaint and making requisite enquiry under Sections 200 CrPC and 202 CrPC, has summoned the applicant to face trial under section 138 of the Negotiable Instruments Act vide order dated 24.8.2022.

6. Learned counsel for the applicant has submitted that the cheque in question was issued in the name of Dharmendra by the applicant as a security and no due debt or liability exists, as such, proceedings under section 138 of Negotiable Instruments Act can not be drawn against him.

7. Per contra, learned AGA has supported the impugned summoning order and has submitted that learned Magistrate, on the basis of the allegations made in the complaint and the statements recorded under Sections 200 and 202 CrPC, has summoned the applicant.

8. Learned AGA has further submitted that disputed question of existence of due debt or liability and cheque been issued as a security cannot be considered at this stage, when the evidence is yet to come, as such, impugned summoning order is just, proper and legal and do not call for any interference by this Court. There is absolutely no illegality or infirmity in the impugned order and the application is liable to be dismissed.

9. Having considered the rival submissions made by learned counsel for the parties and taking into consideration that the learned Magistrate, on the basis of the allegations made in the complaint and the statements recorded under Sections 200 and 202 CrPC, has summoned the applicant to face trial, there can not be said to be any illegality or error of law in summoning the applicant to face trial under section 138 of N.I. Act. Moreover, disputed question of existence of due debt or liability cannot be considered at this stage, when the evidence is yet to come. There is a legal presumption under section 139 of N.I. Act that the holder of a cheque received the cheque of the nature required to in section 138 N.I. Act. for the discharge, in whole or in part of any debt or other liability.

10. It is well settled principle of law that where the cheque has been issued as a security proceeding under section 138 of the N.I Act can well be drawn against the drawee of the cheque on its dishonour.

11. In view thereof, I am of the considered opinion that the impugned summoning order does not suffer from any illegality or infirmity and do not call for any interference by this Court at this stage.

12. Present application under Section 482 CrPC is devoid of merit and it is accordingly dismissed.

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