SHORT NOTE
BOMBAY HIGH COURT
Mridula Bhatkar, J.
M/s K.M. Enterprises —Applicant
versus
M/s Garware Synthetics Ltd.
and Ors. —Respondents
Cri Application No. 234, 232, 231, 233,236, 237, 235 and 238 of 2012 and 130, 131 and 132 of 2014
Decided on 26.9.2014

IMPORTANT POINT
General liability to pay, which can be claimed pursuing civil litigation, but not under S. 138 of Negotiable Instruments Act, which is strict and specific liability.

Headnote:Negotiable Instruments Act, 1881 — Section 138 — Liability under — Complainant denied that it is not collateral security — But accepted that the cheques given to postpone payment due to financial difficulty of accused — HELD — Such replacement of cheques by post-dated cheques not intended for presentation or repayment — But handed over to give assurance of acknowledgement of debt — General liability to pay debt and liability to pay legally dischargeable debt under Section 138 of the Act — Not one and same liabilities.

       Held: The main contention of the complainant that there was always bill to bill payment is doubtful as the respondents succeeded in pointing out higher possibility that the cheques issued were in fact not intended for presentation. The learned Judges of the Metropolitan Magistrate Courts have observed that the yearly balance confirmation was not obtained by the complainant. At the end of every financial year, verification of the outstanding payment received is necessary to fix the amount of the dues. However, it was not done. Though the complainant has denied that it is not collateral security, but accepted that the cheques were given to postpone the payment due to financial difficulty of the accused. Thus, it is held that such replacement of cheques by postdated cheques was not intended for the presentation or repayment but they were handed over to give assurance of acknowledgement of the debt. General liability to pay the debt and liability to pay a legally dischargeable debt under Section 138 of the Negotiable Instruments Act is not one and the same but there is a different between these two liabilities.

       Result: Appeals dismissed

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