High Court Of Madhya Pradesh
S. C. PANDEY
JITENDRA SINGH FLORA - Appellant
Versus
RAVIKANT TALWAR - Respondents
CR. 1804 Of 1999
Decided On : 08/08/2000
Negotiable instruments Act - Construction Agreement - Section 138 of the Negotiable instruments Act, 1881 - [Section 138] - [Summary of Acts and Sections: Section 138 of the Negotiable Instruments Act, 1881] - The court discussed the nature of the agreements, the issuance of post-dated cheques, and the legal provisions of Section 138 of the Act. It highlighted that the cheques were issued as security for construction and not for the discharge of any debt or liability, thus concluding that the applicant cannot be held liable under Section 138 of the Act.
Fact of the Case:
The non-applicant filed a complaint against the applicant under Section 138 of the Negotiable instruments Act, 1881, alleging dishonour of cheques issued as security for construction of a building.
Finding of the Court:
The court analyzed the nature of the agreements, the issuance of post-dated cheques, and the legal provisions of Section 138 of the Act. It concluded that the cheques were not issued for the discharge of any debt or liability, and therefore, the applicant cannot be held liable under Section 138 of the Act.
Issues: The main issue was whether the applicant could be held liable under Section 138 of the Act for the dishonour of cheques issued as security for construction.
Ratio Decidendi: The court held that the cheques were not issued for the discharge of any debt or liability, and therefore, the applicant cannot be held liable under Section 138 of the Act.
Final Decision: The revision succeeded, and the order framing a charge against the applicant was set aside, leading to the discharge of the applicant.
( 2 ) THE non-applicant Ravikant Talwar filed a complaint against the applicant under Section 138 of the Negotiable instruments Act, 1881 (henceforth 'the Act' ). The non-applicant alleged in his complaint that he is the holder of power of attorney of one Shri Shashikant Talwar. The applicant and the complainant entered into two agreements dated 8-5-1990 and 10-5-1992, whereby the applicant was required to construct building No. 183, A. P. R. Colony, katanga, Jabalpur. Pursuant to the aforesaid agreements, it is alleged that the non-applicant advanced Rs. 2,70,000/- to the applicant. It was agreed that the work of construction of above mentioned house shall be over by 30-8-1992. It is alleged in the complaint that the applicant was not able to deliver the completed building by 30-8-1992 and, therefore, the non-applicant agreed to extend the time till 30-4-1993. It is alleged in the complaint that pursuant to the aforesaid agreements, three post-dated cheques dated 30-4-1993 were issued by the applicant in favour of the non-applicant bearing no. 0646945 of Rs. 30,000/-, No. 0646946 of rs. 30,000/- and No. 064947 of Rs. 40,000/ -. These cheques were in respect of the deposit of the applicant in the Bank of India, Napier town Branch, Jabalpur. It is alleged that after 30-4-1993, when the construction was not completed, the non-applicant presented the cheques to the Bank of India on 5-5-1993. The Bank dishonoured the cheques issued by the applicant with the remarks that "refer to Drawer Insufficient funds". The dishonoured cheques along with the advice of the Bank were returned to the non-applicant on 7-5-1993.
( 3 ) THEREAFTER, the non-applicant served a notice dated 18-5-1993 to the applicant under Section 138 of the Act which was received by the applicant on 19-5-1993. In the notice, a demand of Rs. 1,00,000/- (Rupees One Lakh) was made by the non-applicant. On receiving no response from the applicant, the non-applicant filed a complaint under Section 138 of the Act on 18-6-1993 within the period of limitation prescribed therefor.
( 4 ) ON the aforesaid allegations and after registering the complaint and noticing the applicant, the Court proceeded to examine the non-applicant, Ravikant Talwar before framing the charge. Thereafter, it framed the charge on 5-10-1999 against the applicant jitendra Singh Flora.
( 5 ) SHRI Ranjan Banerjee, learned counsel for the applicant in this revision has argued that no offence under Section 138 of the Act is made out on the ground that Section 138 of the Act is attracted where a person issues cheque in order to discharge, in whole or in part, any debt or other liability. It was the contention of learned Counsel for the applicant that there was no debt or other liability which could be legally held to be debt or other liability in the eyes of law. It was contended by the learned Counsel for the applicant that the cheques issued by the applicant were of normal nature and did not create any liability, in favour of the non-applicant. The cheques were issued by way of security for giving timely discharge of the construction of building. In such cases, no offence is made out for the reason already stated above.
( 6 ) NOBODY appeared to support the case of the non-applicant before this Court.
( 7 ) IN order to examine if the applicant is guilty of offence committed under Section 138 of the Act, it is necessary to consider this fact of the nature of the agreements entered into by the parties. The first agreement is dated 8-5-1990. The other agreement is dated 10-5-1992 and the third agreement is dated 10-2-1993. These agreements are cumulatively marked as Annexure P/3. In the agreement dated 8-5-1990, the cost of construction is mentioned as Rs. 3,00,000/- (Rupees Three lakhs) and the details of the buildings to be constructed upon plot No. 183, AP
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