Mr. Ram Sethi S/O Late Shri Radhey ... vs M.S Bcc Properties Pvt. Ltd. ...
2007 Latest Caselaw 1702 Del

JUDGMENT

V.B. Gupta, J.

1. By way of the present petition, the petitioner has sought quashing of the complaint filed under Section 138 of the Negotiable Instruments Act, pending in the Court of Magistrate.

2. The respondent/complainant had executed a Memorandum of Understanding with the present petitioner for purchase of certain land at Mohali and at the time of execution of the Memorandum of Understanding, the respondent/ complainant made advance payment of Rs.50 lacs to the petitioner. Since the deal could not materialse, the petitioner issued cheque dated 15th November, 2005, amounting to Rs.50 lacs for re-payment of the advance payment to the respondent/complainant. Later on the cheque was dishonoured and was returned back with the remarks "insufficient funds".

3. It has been contended by learned Counsel for the petitioner that the respondent/complainant had entered into an agreement with one Gurinder Singh Cheema for purchase of the land and this deal was brokered through the petitioner and to this effect a Memorandum of Understanding was executed between the petitioner and the respondent wherein it was stated by the petitioner that he was issuing a cheque dated 15th November, 2005 as a guarantee only and this amount of Rs.50 lacs was paid to one Gurinder Singh Cheema and nothing went to the pocket of the petitioner. Since the deal could not be materialised, the said Gurinder Singh Cheema returned Rs.50 lacs to the respondent vide pay orders and the whole liability was of Gurinder Singh Cheema to the respondent and the petitioner has only stood as a guarantor. Since the petitioner has not received a single penny out of this Rs.50 lacs, there is no liability of the petitioner to pay the amount to the respondent and as such the present criminal complaint is liable to be quashed.

4. The present petition has been filed under Section 482 CrPC which reads as under:

482. Saving of inherent power of High Court - Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under the Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.

5. This provision of law envisages three circumstances under which the inherent jurisdiction may be exercised, namely -

i)to give effect to an order under the code,

ii)to prevent abuse of the process of court, and

iii)to otherwise secure the ends of justice.

6. Further to seek interference under this Section, three conditions are to be fulfillled, namely -

i)the injustice which comes to light should be of a grave and not of a trivial character;

ii)it should be palpable and clear and not doubtful; and

iii)there exists no other provisions of law by which the party aggrieved could have sought relief.

7. Keeping in view these principles in mind, it is to be seen as to whether the present petition under Section 482 CrPC is maintainable or not.

8. Here in the present case, the petitioner has issued cheque of Rs.50 lacs in favor of the respondent, and he has admitted this fact in his reply to notice received under Section 138 of the Negotiable Instruments Act. Though according to the petitioner, this amount was in the form of bank guarantee for the complete deal as he stood mediator/adviser for the land in question and was not party to complete the transfer of land.

9. In Goaplast (P) Ltd. v. Chico Ursula D'souza and Anr. 2003 SCC(Crl) 603 a question arose as to whether Section 138 of the Negotiable Instruments Act is applicable or not where the payment was stopped prior to the due date of the cheque. It was held that--

In the present case the issue is very different. The issue is regarding payment of a post-dated cheque being countermanded before the date mentioned on the face of the cheque. For the purpose of considering the issue, it is relevant to see Section 139 of the Act which creates a presumption in favor of the holder of a cheque. The said section provides that:

139. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.

Thus it has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. This presumption coupled with the object of Chapter XVII of the Act which is to promote the efficacy of banking operation and to ensure credibility in business transactions through banks persuades us to take a view that by countermanding payment of post-dates cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act. A contrary view would render Section 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to be taking advantage of one's own wrong. If we hold otherwise, by giving instructions to banks to stop payment of a cheque after issuing the same against a debt or liability, a drawer will easily avoid penal consequences under Section 138. Once a cheque is issued by a drawer, a presumption under Section 139 must follow and merely because the drawer issued notice to the drawee or to the bank for stoppage of payment it will not preclude an action under Section 138 of the Act by the drawee or the holder of the cheque in due course. This was the view taken by this Court in Modi Cements Ltd. v. Kuchil Kumar nandi. On same facts is the decision of this Court in Ashok Yeshwant Badave v. Surendras Madhavrao Nighojakar. The decision in Modi case overruled an earlier decision of this Court in Electronics Trade & Technology Development Corporation Ltd. v. Indian Technologists & Engineers (Electronics)(P) Ltd. which had taken a contrary view. We are in respectful agreement with the view taken in Modi case. The said view is in consonance with the object of the legislation. On the faith of payment by way of a post-dated cheque, the payee alters his position by accepting the cheque. If stoppage of payment before the due date of the cheque is allowed to take the trnsaction out of the purview of Section 138 of the Act, it will shake the confidence which a cheque is otherwise intended to inspire regarding payment being available on the due date.

10. Admittedly, in the case in hand the petitioner has issued a cheque in favor of the respondent and thus all the pleas which the petitioner has taken in the present petition are his defense, which he can take during the course of trial and this Court is not going to conduct a trial. The present petition, filed by the petitioner, is wholly misconceived, without any basis and is nothing but an abuse of the process of law and accordingly the same is dismissed with costs of Rs.5,000/-.

11. The petitioner is directed to deposit the costs with the trial court within one month from the date of this order, failing which the trial court shall recover the same in accordance with law. Copy of this judgment be sent to the trial court.