The present case concerns a wife who fabricated complaint against her husband under Section-138 NI Act using 'security cheques' issued to her by him in divorce settlement.

CASE DETAILS

The wife/ complainant has filed a complaint under Section 138 of the Negotiable Instruments Act,1881 for an amount ₹2,00,000 cheque being bounced.

It was her case that the said cheque had been issued by her husband to partially charge off liability of ₹20,00,000 he holds against her. She contended that the liability arose out of the 'Will' of her deceased father-in-law in which he allegedly left the said sum in her name.

Refuting the claims, on the other hand, the husband/accused contended that the cheque in question had been discharged to her during the negotiations made before the divorce decree granted to him. He discarded the fact of there being any sort of 'Will' left by his father in which he had made any claims the complainant/wife mentioned in the suit.

He further submitted that a full-fledged amount of ₹10,00,000 has been paid to her wife during the divorce settlement and said cheque had been issued during the negotiations as 'security'. He denied of having any legal liability against her on the day, the cheque been issued.

CASE FACTS

Learned Counsel of the accused/husband contended that evidence had been laid before the Court that there was no legally recoverable debt on the date of presentation of the impugned cheques. He denied that his client received any legal demand notice from the complainant/wife and thus no action under Section 138 NI Act can arise since provision of Sec-138(b) NI Act was not complied with by the complainant.

He claimed that the 'Will' claims are flase and fabricated as the complainant/wife hadn't presented before the Court any such document.He further asserted that she admitted all liabilities against her being settled in the divorce decree and therefore she falsified the Will claims to make her a fortune and that his client was a victim of fabricated suit.

The Learned Counsel relied on the Supreme Cour Judgement in John K John Vs Tom Varghese & Anr. 2007 Latest Caselaw 847 SC and other High Court judgements.

Learned Counsel of the complainant/wife on the other hand contended that the accused has admitted his signatures on the cheque in question, and thus a presumption under Sec 139 read with Sec 118 of Negotiable Instrument Act arises in the favour of the complainant and it for him to establish a probable defence. He tried to justify the Will case in his arguements and submitted that divorce decree is in no relation to it.

COURT OBSERVATIONS

In defense of non-receipt of Legal Demand Notice the Court concluded that the situation in hand was not a unique one.

In D. Vinod Shivappa vs. Nanda Belliappa, Latest Caselaw 344 SC, (2006) 6 SCC 456 Honorable Supreme Court while discussing service of legal demand notice and presumption thereof in case of report of “refusal”, “left”, “not available” etc, laid that if in each such case the law is understood to mean that there has been no service of notice, it would completely defeat the very purpose of the Act. It would then be very easy for an unscrupulous and dishonest drawer of a cheque to make himself scarce for sometime after issuing the cheque so that the requisite statutory notice can never be served upon him and consequently he can never be prosecuted. In such situation, upon appearance the accused will get ample opportunity to either prove the conditions favoring him or to compound the matter by making payment.

It was not the case of the accused that he has no association at all with the mentioned address or that the postal receipts and the tracking report placed on record by the complainant was not genuine or is instead forged and fabricated.

Accordingly, the question for determination before this court is “Whether legal demand notice sent to the last known address of the accused within the knowledge of the complainant can be considered a valid service for compliance of the mandatory essential of Section 138 (b) of NI Act?

The Court placed reliance on the dicta as laid by Supreme Court in C.C Alavi Haji Vs Palapetty Muhammed & Anr (2007), wherein a three judge bench of the apex court has CC No. : 55856-16 Aparna Sharma Vs Rahul Sharma  categorically stated:

Non­receipt of legal demand notice cannot be the only defence. If at all the accused did not receive the legal notice he can make the payment so due within 15 days of receipt of summons from court along with copy of the complaint. A person who does not pay even after the receipt of court summons cannot contend that there was no proper service of notice as required under Section 138 NI Act, by ignoring the statutory presumption under Section 27 of General Clauses Act.It thus concluded that in present case the accused has not denied his association with the address so mentioned on the legal demand notice, it cannot be said that the complainant sent the legal demand notice to some random address simply to harass the accused and that the compliance of section 138 (b) NI Act was not duly done. There the Court was not inclined to decline the claim of the complainant on such non­meritorious ground.

The Court then dicussing the scope of Security Cheques pointed at Delhi High Court judgement in Credential Leasing & Credits Ltd. vs Shruti Investments & Anr. CRL. in which the Court held:

“28. In my view, therefore, the scope of Section 138 NI Act would cover cases where the ascertained and crystallised debt or other liability exists on the date that the cheque is presented, and not only to case where the debt or other liability exists on the date on which it was delivered to the seller as a post­dated cheque, or as a current cheque with credit period. The liability, though, should be in relation to the transaction in respect whereof the cheque is given, and cannot relate to some other independent liability. If, on the date that the cheque is presented, the ascertained and crystallised debt or other liability relatable to the dishonoured cheque exists, the dishonor of the cheque would invite action under Section 138 NI Act. There could be situations where, for example, an issue may be raised with regard to the quality, quantity, deficiency, specifications, etc. of the goods/services supplied, or accounting. It would have to be examined on a case to case basis, whether an ascertained or crystallised debt or other liability exists, which could be enforced by resort to Section 138 NI Act, or not.”

In view of this, the Court stated that the it was on the part of accused to prove that no liability against the complainant on the date of issuance of cheques.

The Court further added that even if blank cheques were handed over to the complainant by the accused and it was the complainant who affixed the date, name of payee and amount thereon, as is the case in the present case (admitted by the complainant in her examination as CW­1), the same is not be a material alteration as to render the impugned cheque void as laid by the Honorable Delhi High Court in judgement in case titled Ravi Chopra vs State 2008(2).

It stated that there is no law that a person drawing the cheque has to necessarily fill it up in his own handwriting. When a blank cheque is signed and handed over, it means that the person signing it has given implied authority to the holder of the cheque, to fill up the blank which he has left. A person issuing a blank or undated cheque is supposed to understand the consequences of doing so. He cannot escape his liability only on the ground that blank or undated cheque had been issued by him.

Was the Accussed liable to discharge the liability he was being sued for ?

The Court found the Will claims made by the complainant to be false as not only she admitted on oath mistake in 'date' of will formation due to typographical error, she also failed to present before the Court any document that hold the same. Also she didn't mention of the liability arising out of the Will at the times she was getting divorce from the accused.

Looking at all the facts the Court concluded that the narrative of the complainant didn't inspire enough confidence that any such will was ever executed in her favor.

The Court raised doubts as to why was it that the complainant did not establish any claim or tried to recover her due share under the Will of her father­in­law, right after he expired?

The Bench stated that the Bank Statement produced by the accused proved he received no such sum from her Late father. Moreover, the Court found the payment of ₹20,00,0000 not being the legal liabilty of the accused as he was only one of the legal heirs of the deceased and not the executor nor the administrator of any such Will.

The Court pronounced that the acussed was not legally bounded to discharge liability arising out of his late father's will under Hindu law.

The Court concluded that It is an established law that whereas the accused only needs to set up a probable defence, the complainant has to prove his case beyond reasonable doubt which she failed to and it thus accordingly acquitted the accused of the offence punishable under Sec 138 of Negotiable Instruments Act.

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