Delhi High Court
Lyca Finance Ltd. vs State & Anr. on 15 July, 2016
$~38
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CRL.L.P. 251/2013
Decided on 15th July, 2016
LYCA FINANCE LTD. ..... Petitioner
Through : Mr. Rakesh Garg, Adv.
versus
STATE & ANR. ..... Respondents
Through :Mr. Tarang Srivastava, APP for the
State
Mr. Neeraj Bhardwaj, Adv. for
respondent no. 2
CORAM:
HON'BLE MR. JUSTICE A.K. PATHAK
A.K. PATHAK, J. (ORAL)
1. Petitioner seeks leave to appeal against the judgment dated 24th
January, 2013 whereby complaint under Section 138 of the Negotiable
Instruments Act, 1881 („the Act‟, for short), filed by the petitioner against
the respondent no. 2, has been dismissed, after trial.
2. Case set up by the petitioner, before the trial court, was that it had
financed `42,600/- to respondent no.2, to enable him to purchase a
motorcycle. Loan-cum-hypothecation agreement dated 16th March, 2005
was executed between the petitioner and respondent no. 2. As per the
agreement, respondent no. 2 was to pay `57,000/- in 30 instalments. First
instalment was payable on 15th April, 2005. Petitioner alleged that
respondent no. 2 did not adhere to financial discipline resulting in
accumulation of outstanding dues. On persuasion of petitioner the
respondent no. 2 issued a cheque bearing no. 045159 dated 17 th February,
2009 for `30,650/- drawn on Indian Overseas Bank, Naraina, New Delhi to
discharge his part liability. However, on presentation the cheque was
returned unpaid vide banker‟s memo dated 19th February, 2009 for the
reason "Funds Insufficient". Since cheque amount was not paid within the
prescribed period despite service of legal notice dated 13 th March, 2009,
hence, the complaint.
3. The complaint case was contested by respondent no. 2. Issuance of
cheque was not disputed. However, it was alleged that cheque was as
security cheque. Subsequently, it was accepted that it was not a security
cheque. On the basis of evidence adduced by the parties, it was concluded
that cheque amount was much more than the actual amount due, therefore,
cheque was not in discharge of a legal liability. Trial court has meticulously
scrutinized evidence adduced by the parties and on the basis thereof has held
that, as per the loan agreement Ex. CW1/B, petitioner had advanced
`42,600/-. As agreed the interest of `14,400/- was also payable. Thus, total
amount payable in instalments was `57,000/-. CW1 admitted in his cross-
examination that respondent no. 2 had already paid about `40,000/- to
petitioner. Statement of account Ex. CW1/1 indicated that as on 16 th
February, 2009 `17,100/- was outstanding balance. Over and above this,
overdue charges of `12,451.48 were added. Even the aggregate of this
amount comes to `29,551.48; whereas cheque amount was much more than
this. Thus, the cheque being of higher amount could not be taken towards
discharge of the existing legal liability.
4. Reliance has been placed on the judgments, that is, Alliance
Infrastructure Project Pvt. Ltd. and Ors. Vs. Vinay Mittal,
MANU/DE/0031/2010 and Angu Parameswari Textiles (P) Ltd. and Ors.
Vs. Sri Rajam & Co., MANU/TN/0662/2001 to conclude that if cheque
amount is much more than liability, section 138 of the Act is not attracted.
In Alliance Infrastructure (supra), it has been held as under:-
"8. The question which comes up for consideration
is as to what the expression "amount of money"
means in a case where the admitted liability of the
drawer of the cheque gets reduced, on account of
part payment made by him, after issuing but before
presentation of cheque in question. No doubt, the
expression "amount of money" would mean the
amount of the cheque alone in case the amount
payable by the drawer, on the date of presentation
of the cheque, is more than the amount of the
cheque. But, can it be said the expression "amount
of money" would always mean the amount of the
cheque, even if the actual liability of the drawer of
the cheque has got reduced on account of some
payment made by him towards discharge of the
debt or liability in consideration of which cheque
in question was issued. If it is held that the
expression "amount of money" would necessarily
mean the amount of cheque in every case, the
drawer of the cheque would be required to make
arrangement for more than the admitted amount
payable by him to the payee of the cheque. In case
he is not able to make arrangement for the whole
of the amount of the cheque, he would be guilty of
the offence punishable under Section 138 of
Negotiable Instruments Act. Obviously this could
not have been the intention of the legislature to
make a person liable to punishment even if he has
made arrangements necessary for payment of the
amount which is actually payable by him. If the
drawer of the cheque is made to pay more than the
amount actually payable by him, the inevitable
result would be that he will have to chase the
payee of the cheque to recover the excess amount
paid by him. Therefore, I find it difficult to take
the view that even if the admitted liability of the
drawer of the cheque has got reduced, on account
of certain payments made after issue of cheque, the
payee would nevertheless be entitled to present the
cheque for the whole of the amount, to the banker
of the drawer, for encashment and in case such a
cheque is dishonoured for wants of funds, he will
be guilty of offence punishable under
Section 138 of Negotiable Instrument Act."
5. In Angu Parameswari Textiles (supra), it has been held thus:-
"4. Section 138 of the Negotiable Instruments Act
reads that where any cheque was drawn for
payment of any amount of money for the discharge
in whole or any part of any debt or other liability
and the same is dishonoured by the Bank, the
person who drew the cheque shall be punishable.
Therefore, the cheque drawn should be towards the
discharge of either the whole debt or part of the
debt. If the cheque is more than the amount of the
debt due, I am afraid, Section 138 cannot be
attracted. This is a case where the cheque amount
was more than the amount due on the date when
the cheque was presented. The presentation of the
cheque and subsequent dishonour alone raises a
cause of action. When the cheque cannot be said to
be drawn towards the discharge of either the whole
or part of any debt or liability, Section 138 is not
attracted. On this sole ground, the complaint is
liable to be quashed and is accordingly quashed."
(emphasis laid)
6. For the foregoing reasons, I do not find any perversity in the view
taken by the trial court. The view taken by the Trial Court, obviously, is a
possible view. In my view, petitioner has failed to make out a case for grant
of leave to appeal against the judgment of the trial court. Petition is
dismissed.
A.K. PATHAK, J.
JULY 15, 2016/rb
