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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
K.SURENDER, J.
Mirza Ghousia – Appellant
Versus
The State of Telangana Rep. by Public Prosecutor and another. – Respondent
Criminal Petitioner No.5126 of 2019
Decided on : 19-10-2022
Negotiable Instruments Act, 1881 - Section 138 - Dishonour of cheque for insufficiency, etc., of funds in account - Compensatory damages – Contractual terms of employmentis stereotyped form on “take it or leave it” basis detrimental to employees, even if accepted by employees, liable to be declared void and inoperative on these grounds. (Para 10).
Findings of the Court :
Cheque was given initially towards security and company has failed to substantiate as to how petitioner/accused is due amount of amount - Specific details have to be provided by complainant/employer to show that outstanding amount either falls within definition of ‘debt or ‘other liability’ - Only because there is an agreement, which was signed by petitioner/accused by giving blank cheque stating that in event of leaving the company, an amount of amount would be paid, would not amount to debt or other liability as required under Section 138 of the Negotiable Instruments Act
Result: Criminal Petition allowed
ORDER :
1. This petition is filed to quash the proceedings against the petitioner in CC No.302 of 2016 on the file of XXIV Special Magistrate, Hyderabad.
2. The petitioner is accused in the complaint filed by the 2nd respondent for the offence under Section 138 of the Negotiable Instruments Act.
3. The case of the complainant is that the petitioner was an employee of the complainant company and entered into an agreement dated 15.10.2015 as she was selected for training in the field of medical coding at the cost of the complainant company, which was estimated at Rs.1.00 lakh. The complainant company agreed to train the petitioner/accused in the field of medical coding and bound herself to serve the complainant company for a period of 24 months from the date completion of said training programme. In the event of the petitioner/accused resigning from the service before the expiry of 24 months, the petitioner/accused agreed to pay Rs.1.00 lakh towards compensatory damages. The said cheque in question was taken as security at the time of entering into agreement on 15.10.2015.
4. For the reason of the petitioner stopping from attending her duties from 07.03.2016, the complainant requested her to report to duty by addressing letter dated 10.03.2016. Since the letter was ignored, the complainant company again addressed another letter dated 13.04.2016 to pay an amount of Rs.1.00 lakh together with interest and since the petitioner ignored the said letter also, cheque was presented on 08.08.2016 and on the very same day, it was returned for the reason of ‘insufficient funds’.
5. The respondent/complainant to substantiate their claim as legally enforceable debt of the cheque amount, has produced an agreement dated 15.10.2015 and at the time of the said agreement, the subject cheque was handed over to complainant company by undertaking in the said agreement that the petitioner is liable to the company a sum of Rs.1.00 lakh by way of compensatory damages and it further states that employee/petitioner shall not raise any dispute regarding the quantum of damages to be paid to the company.
6. The said agreement is one sided agreement which entitles the complainant company to recover an amount of Rs.1.00 lakh in the event of termination of the employment within 24 months. The said agreement, though entered into and signed by the petitioner/accused, it cannot be held to be a valid agreement. The said agreement empowers the company to take action against the employee, who is the petitioner/accused herein. However, under no circumstances it entitles the petitioner/employee/accused to seek any remedy against the company in the event of the company taking any action which would be inappropriate to the employee. It is not as though that no remedy would be available if an employer does any act in violation of the rights of an employee.
7. In Life Insurance Corporation of India v. Consumer Education and Research Centre and others, (1995) 5 SCC 482, the Hon'ble Supreme Court has held that "if a contract or a clause in a contract is found unreasonable or unfair or irrational one must look to the relative bargaining power of the contracting parties. In dotted line contracts there would be no occasion for a weaker party to bargain or to assume to have equal bargaining power. He has either to accept or leave the services or goods in terms of the dotted line contract. His option would be either to accept the unreasonable or unfair terms or forego the service forever. With a view to have the services of the goods, the party enters into a contract with unreasonable or unfair terms contained therein and he would be left with no option but to sign the contract".
8. In Superintendence Company of India (P) Ltd v. Sh. Krishan Murgai, (1981) 2 SCC 246, Hon'ble Supreme Court held that "It is well settled that employees covenants should be carefully scrutinized because there is inequality of bargaining power between the parties; indeed no bargaining power may occur because t
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