Amrit Sandhu Costar vs State And Anr
2022 Latest Caselaw 2086 Del

                          $~5
                          *     IN THE HIGH COURT OF DELHI AT NEWDELHI

                                                              Reserved on: July 19, 2022
                                                         Decided on: September 06, 2022
                          +     CRL.M.C. 556/2019 & CRL.M.A. 2314/2019
                                AMRIT SANDHU COSTAR                         ..... Petitioner

                                                   Through:    Mr.    Sachin   Sood     and
                                                               Mr.RipinSood, Advocates.
                                                         V

                                STATE & ANOTHER                            .... Respondents
                                             Through:          Mr. Ashok Kumar Garg, APP
                                                               for State/R1 along with SI
                                                               Deepak Yadav, PS HauzKhas.
                                                               Mr.        Vivek         Sood,
                                                               Senior Advocate alongwith
                                                               Mr.      Sundeep       Sehgal,
                                                               Mr. Mohd. Kamran and Mr.
                                                               Akash Godhvani, Advocates
                                                               for R-2.
                          %
                          CORAM:
                          HON'BLE MR. JUSTICE SUDHIR KUMAR JAIN
                          JUDGMENT

1. The present petition is filed under section 482 Code of

Criminal Procedure, 1973 (hereinafter referred to as "the Code") for

quashing the criminal complainttitled as Atamjit Singh V Amrit

Sandhu Coster & another bearing CC no 6437 of 2017 and the

summoning order dated 03.06.2017 (hereinafter referred to as "the

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 1 Signing Date:13.09.2022 18:38:40 impugned order") passed by the court of Ms. Colette Rashmi Kujur,

Metropolitan Magistrate-10, South East, Saket (hereinafter referred to

as "the trial court").

2. The factual background necessary to mention for disposal of

present petition is that the respondent no.2/ complainant (hereinafter

referred to as "the respondent no 2") has filed a complaint under

section 138 of the Negotiable Instruments Act, 1881 titled as Atamjit

Singh V Amrit Sandhu Coster & another bearing CC No.6437 of

2017 on allegations that the petitioner (arrayed as the accused no 1 in

complaint) and her sister namely Jasween Sandhu (arrayed as the

accused no 2 in complaint and is petitioner in Crl.M.C. bearing no

437/2019) issued a cheque bearing no. 329623 dated 06.03.2017

amounting to Rs 20,00,000.00 (Rupees Twenty Lacs Only) drawn on

Syndicate Bank, Branch West Punjabi Bagh, Central Market, New

Delhi-110026 (hereinafter referred to as "the cheque in question")

towards discharge the their liability as detailed in complaint. The

respondent no 2 presented said cheque for encashment on 06.04.2017

at HDFC Bank, Branch G.K.-l but was dishonored due to "Payment

Stopped by Drawer" as intimated vide return memo dated

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 2 Signing Date:13.09.2022 18:38:40 11.04.2017. The petitioner and Jasween Sandhu did not pay cheque

amount despite notice dated 10.05.2017. The respondent being

aggrieved filed the present complaint.

3. The trial court vide impugned order summoned the petitioner

and Jasween Sandhu. The impugned order is reproduced as under:-

03.06.2017

Present: Complainant .along with Sh. Sanjay Kothiyal, Adv.

Heard. Record perused.

Cognizance of offence u/s 138 Nl Act taken. PSE has been led by the complainant.

Vide a separate statement of the complainant, PSE has been closed.

Heard on issuance of process.

In view of the submissions made and documents tendered, this Court is satisfied that there is sufficient material on record to proceed against all the accused. Let summons be Issued against all the accused vide PF/RG/AD/Courier returnable on 09.08.2017. Pf be filed within 02 weeks.

4. The petitioner being aggrieved filed the present petition and

challenged the impugned order. The petitioner pleaded that the

present petition is filed with an ulterior motive to coerce the

petitioner to settle the criminal case initiated by her for the offence of

cheating stated to be committed by respondent no 2 vide FIR bearing

no 734 of 2015 registered at PS Hauz Khas and proceedings under

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 3 Signing Date:13.09.2022 18:38:40 sections 82 and 83 of the Code have already been initiated against the

petitioner. There is no legally enforceable liability is due against the

petitioner towards the respondent no 2.

4.1 The petitioner at present is residing in USA. The respondent no 2

was introduced with the petitioner by a close family friend namely

Harpreet Singh and the respondent no 2 represented himself as sole

proprietor of M/s Ace Trading Company and is engaged in the

business of development of restaurants and food courts for his clients.

The respondent no 2 after winning trust and confidence of the

petitioner lured her to invest in the business of restaurant and food

court business and the respondent no 2 would be developing food

court at Ground Floor of Building No. 8, DLF Cyber City, Phase - II,

Sector 24, Gurgaon, Haryana for the petitioner for a total cost of Rs.

40 lacs and the respondent no 2 would be paying Rs. 1 lacs per month

till the time the food court is developed at the aforesaid address. The

respondent no 2 also promised to hand over fully developed food

court to the petitioner within six month and the petitioner would get

monthly net profit of 3/4 lacs. The petitioner paid Rs. 40 lacs to the

respondent no 2 through cheques and in cash. The respondent No 2

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 4 Signing Date:13.09.2022 18:38:40 started to pay Rs. 1 lac per month to the petitioner with effect from

August, 2011 and continue to pay till December, 2011.

4.2 The petitioner went back to USA and remained there from 13th

December, 2011 to 12th January, 2012 and found that food court was

being operated by someone else. It was revealed to the petitioner that

the food court which was stated to be developed for the petitioner

was in fact being developed for another person by the respondent no

2. The respondent no 2 expressed his inability to hand over the food

court to the petitioner and also to return the money advanced by the

petitioner and to give assured return as agreed. However, the

respondent no 2 started to pay Rs. 60,000/- pm with effect from

01.01.2012 to the petitioner. The respondent no 2 at the insistence of

the petitioner acknowledged Rs. 40 Lacs paid by her and entered in

two Assured Return Agreements. The respondent no 2 was found to

be missing and as such the petitioner filed a police complaint dated

08.12.2014 at P S Hauz Khas and another complaint on 05.01.2015

to Deputy Commissioner of police. Thereafter the petitioner filed a

complaint under section 200 of the Code along with an application

under section 156 (3) of the Code wherein vide order dated

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 5 Signing Date:13.09.2022 18:38:40 06.07.2015, the court directed for registration of FIR. Accordingly

FIR bearing no 734/2015 was registered. The applications filed for

grant of anticipatory bail filed by the respondent no 2 before Sessions

Court, this Court and the Supreme Court have already been

dismissed. The respondent no 2 vide order dated 12.05.2017 was

directed to join the investigation and to pay Rs. 15 lacs to the

petitioner but the respondent no 2 did not comply these.

4.3 The petitioner came to know about pendency of present

complaint when the respondent no 2 filed an application in pending

proceedings qua FIR No 734/2015 wherein it was disclosed that non

bailable warrants had been issued against the petitioner. The

complaint did not disclose any cause of action against the petitioner

in absence of any legally enforceable debt towards the petitioner. The

petitioner handed over cheque in question to the respondent no 2 for

development of food court along with the cheque bearing no 329612

dated 21.03.2011. The respondent no 2 was given Rs 15 Lacs in lieu

of cheque in question. The respondent no 2 did not return back the

cheque in question as having lost the cheque in question and due to

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 6 Signing Date:13.09.2022 18:38:40 this a stop payment request was made by the petitioner to the bank

vide communication dated 04.08.2011.

5. The petitioner challenged impugned order on the grounds that

the present complainant is perverse and is abuse of process of law

and is filed to coerce the petitioner to settle criminal case initiated by

her vide FIR bearing no 734/2015 registered at PS Hauz Khas. The

complaint does not disclose any debt or liability against the

petitioner. There was no occasion for the petitioner to issue the

cheque in question to the respondent no 2 in the year 2017 when his

whereabouts could not even be traced by the police and non bailable

warrant issued against him by the court of Metropolitan Magistrate

could not be executed and proceedings under section 82/83 were

ordered to be issued against the petitioner. The petitioner handed over

cheque in question to the respondent no 2 in the year 2011 towards

the development of food court along with the cheque bearing No

329612 dated 21.03.2011. The petitioner had also given Rs. 15 lacs to

the respondent no 2 as the respondent no 2 disclosed having lost the

cheque in question and due to this reason a request for stop payment

was made to the bank vide communication dated 04.08.2011 by the

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 7 Signing Date:13.09.2022 18:38:40 petitioner. The trial court has failed to appreciate that the present

complaint is having full of inconsistencies. The period of limitation

for enforcing/recovering any debt expired in the year 2014 and any

cheque issued after the expiry of the period of limitation cannot be

said to have been issued towards any debt or other liability. The trial

court has failed to appreciate that the cheque in question was issued

by the petitioner on 06.03.2017 on the basis of liabilities incurred in

the year 2011. The cheque in question was not given towards

discharge of a legally enforceable debt or liability. It was prayed that

present complaint along with impugned order be set aside.

6. Section 138 of the Negotiable Instruments Act, 1881 deals

with dishonour of cheque. It reads as under:-

138 Dishonour of cheque for insufficiency, etc., of funds in the account. --Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 8 Signing Date:13.09.2022 18:38:40 amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless--

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.-- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.

7. The Supreme Court in the case of Kusum Ingots & Alloys

Ltd. V Pennar Peterson Securities Ltd. & others, (2000) 2 SCC

745 has laid down the following ingredients for taking cognizance

under Section 138 of the NI Act:-

(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account for the discharge of any debt or other liability;

(ii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn of within the period of its validity whichever is earlier;

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 9 Signing Date:13.09.2022 18:38:40

(iii) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank;

(iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;

(v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;"

The Supreme Court in Jugesh Sehgal V Shamsher Singh Gogi,

(2009) 14 SCC 683 observed that above ingredients being

cumulative, it is only when all the aforementioned ingredients are

satisfied that the person who had drawn the cheque can be deemed to

have committed an offence under Section 138 of the Act.

8. The counsel for the petitioner argued that the trial court vide

impugned order took cognizance wrongfully for offence punishable

under section 138 of the Negotiable Instruments Act, 1988 and

ordered for issuance of summon. The trial court did not appreciate

that the present complaint does not disclose any legally enforceable

debt or liability against the petitioner. The counsel for the petitioner

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 10 Signing Date:13.09.2022 18:38:40 relied on Prajan Kumar Jain V Ravi Malhotra,2009 (113) DRJ

275; Vijay Polymers Pvt. Ltd. & another V M/s Vinnay

Aggarwal, 2009 V AD (Delhi ) 70;Sasseriyil Joseph V Devassia,

2001Crl L J 24 and Jage Ram Karan Singh and another V State

and another,265 (2019) Delhi Law Times 374.

9. The counsel for the respondent no 2 justified the impugned

order and argued that the petitioner and her sister Jasween Sandhu

issued the cheque in question in favour of the respondent no 2

towards discharge of legally enforceable liability and such the

petitioner was rightly summoned by the trial court.

10. The legal issue which needs judicial consideration is that

whether the petitioner issued the cheque in question towards the

discharge of legally enforceable liability or debt which is an essential

ingredient for invoking section 138 of the Negotiable Instrument Act,

1881.

11. It is necessary to mention facts as narrated in the complaint to

decide above legal issue. The respondent no 2 in complaint alleged

that he is having rich experience in the property management work

and provided consultancy services to the petitioner and her sister

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 11 Signing Date:13.09.2022 18:38:40 Jasween Sandhu i.e. the accused no. 2 who wanted to invest the

money. The petitioner had met the respondent no 2 through common

friend Annie Manchanda, and sought help of the respondent no 2 in

procuring properties in Gurgoan which could yield high rentals and

returns to her. The petitioner was also willing to pay charges to the

respondent no 2 for his services. The petitioner had availed services

and expertise of the respondent no 2 with respect to sale and purchase

of various properties for herself and her sister, Jasween Sandhu

(accused no. 2) and started to get excellent returns on the investment.

The petitioner also made the respondent no 2 to undertake massive

renovation work in the property bearing no D-8/4, Ground Floor

DLF, Phase-V, Gurgoan for which the petitioner and Jasween Sandhu

in total owe Rs. 20,10,000.00. The petitioner and Jasween Sandhu

also executed Assured Return Agreements dated 16.09.2011 with

M/s. Cyberwalk Tech Park Pvt Ltd (the Developer of Land) and M/s.

Gyan Marketing Associates Pvt Ltd (the Confirming Party) brokered

by the respondent no 2. The petitioner due to successful execution of

deal owed Rs. 3,50,000.00 towards the respondent no 2 and Jasween

Sandhu owed Rs. 4,60,000.00 as the Consultancy charges. The

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 12 Signing Date:13.09.2022 18:38:40 respondent no 2 also undertook renovation work in other properties

of the petitioner and incurred total expenditure of Rs. 2,50,000.00.

The petitioner through the respondent no 2 brokered deal of sale of

other properties/plots for which the petitioner incurred total

commission/consultancy fees of Rs. 20,10,000.00 towards the

respondent no 2.

11.1 The petitioner and Jasween Sandhu in discharge of their liability

handed over a cheque bearing no. 329623 dated 06.03.2017

amounting to Rs. 20,00,000 drawn on Syndicate Bank, Branch West

Punjabi Bagh, Central Market, New Delhi-110026 i.e. cheque in

question to discharge their legally enforceable debt to the respondent

no 2 with assurance of encashment on presentation in order.

However said cheque got dishonoured on presentation due to

Payment Stopped by Drawer as intimated vide Return Memo dated

11.04.2017. The petitioner and Jasween Sandhu did not pay cheque

amount despite legal notice dated 10.05.2017. Hence present

complaint.

12. The legal issue pertaining to the liability of accused under

section 138 of the Negotiable Instruments Act, 1881 in time barred

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 13 Signing Date:13.09.2022 18:38:40 debt was considered and discussed by different High Courts. The

Kerala High Court in Sasseriyil Joseph V Devassia considered the

question whether the respondent who issued the cheque in question in

discharge of a time barred debt is liable under Section 138 of the

Negotiable Instruments Act, 1881. It was observed by the learned

Single Judge as under:-

Thus, Section 138 is attracted only if the cheque is issued for the discharge of a legally enforceable debt or other liability. In this case, admittedly, the cheque in question was issued in discharge of a time barred debt. It cannot be said that a time barred debt is a legally enforceable debt. In this connection, it is also relevant to note the decision of the Andhra Pradesh High Court reported in Girdhari Lal Rathi v. P.T.V. Ramanujachari 1997 (2) Crimes 658. It has been held in that case that if a cheque is issued for a time barred debt and it is dishonoured, the accused cannot be convicted under Section 138 of the Negotiable Instruments Act simply on the ground that the debt was not legally recoverable. I am fully in agreement with the view expressed by the learned Judge in the decision referred to above.

The Judgment rendered by Kerala High Court in Sasseriyil Joseph's

case was challenged before the Supreme Court in Special Leave to

Appeal (Crl.) No.1785/2001 which was decided by the Supreme

Court vide Judgment dated:10-09-2001 and view of Kerala High

Court was affirmed by holding that the cheque in question having

been issued by the accused for due which was barred by limitation

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 14 Signing Date:13.09.2022 18:38:40 the penal provision under Section 138 of the Negotiable Instruments

Act is not attracted in the case.

13. In Vijay Polymers Pvt. Ltd. & another V M/s Vinnay

Aggarwal decided by another Coordinate Bench of this court, issue

for consideration waswhether the complaint filed under Section

138 of the Negotiable Instruments Act, 1881 was not maintainable in

law in as much as same was based upon the dishonour of a cheque

which was issued by accused in lieu of a debt which was not legally

recoverable at the time of issuance of the said cheque. The learned

Single Judge after relying on Sasseriyil Joseph V Devassia decided

by the Supreme Court and referring Ashwini Satish Bhat V Shri

Jeevan DivakarLolienkar& another, 2000(5) Bom CR 9 decided

by Bombay High Court allowed the petition which was filed to

impugn summoning order which was passed on basis of a cheque

issued for time barred liability and also observed that for analyzing

the limitation of a civil liability beyond a period of three years, the

acknowledgement, if any, must be there before period of limitation is

over, which is not the case of the complainant. Another Coordinate

Bench of this court in Prajan Kumar Jain V Ravi Malhotraafter

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 15 Signing Date:13.09.2022 18:38:40 relying on Vijay Polymers Pvt. Ltd. & another V M/s Vinnay

Aggarwal observed that cheques which are stated to be subject

matter of the complaint were issued for the discharge of a liability of

a debt arising out of the agreement dated 14.6.2000 which had

become time barred and as such debt was not a legally enforceable

debt within the meaning of Section 138 Explanation of the NI Act.

Accordingly, the complaint and all proceedings emanating there from

were ordered to be quashed. In Jage Ram Karan Singh and

another V State and another, the learned Single Judge of this court

observed as under:-

Therefore, I do not agree with the contention raised by the learned counsel for the petitioners that the Appellate Court has misinterpreted Section 139 of the NI Act. The Appellate Court has rightly held that the alleged responsibility of the respondent No.2, if any, had already become time-barred as on the date of the issuance of cheque and, therefore, the same cannot be said to be in discharge of a legally enforceable debt or liability.

13.1 Another Coordinate Bench of this court in MRB Promoters

Pvt. Ltd. & others V Splendor Land base Limited, Crl.M.C. no

3744/2016 decided on 03rd July, 2017 considered plea of the accused

that the claim of the complainant is barred by law of limitation after

placing reliance on Vijay Polymers Pvt. Ltd. & another V Vinay

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 16 Signing Date:13.09.2022 18:38:40 Aggarwal, Prajan Kumar Jain V Ravi Malhotra and Smt.

Ashwini Satish Bhat V Shri Divakar Lolinenkar as referred

hereinabove. The learned Single Judge in this case took different

view by considering that the accused in reply to noticestated that the

cheques were given to the complainant in good faith in furtherance of

bona fide intent and the accused always intended to repay which can

be determined during the trial.

14. The Punjab & Haryana High Court in Sultan Singh V Tej

Partap, 2022(1) RCR (Criminal) 712 deliberated issue whether

issuance of a cheque for repayment of a time barred debt would

amount to a written promise to pay the said debt within the meaning

of section 25(3) of the Indian Contract Act, 1872 and would the said

promise, by itself, create any "legally enforceable debt", as stated

in section 138 of the Negotiable Instruments Act, 1881. The court

after considering the relevant provisions as well as the judgments of

various Courts on held that the issuance of a cheque in repayment of

a time barred debt amounts to a written promise to pay the said debt

within the meaning of section 25(3) of the India Contract Act, 1872

and the said promise by itself would create a legally enforceable debt

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 17 Signing Date:13.09.2022 18:38:40 or liability, as contemplated by section 138 of the Negotiable

Instruments Act. The court also referred Shapoor Freedom Mazda

V Durga Prosad Chamaria, AIR 1961 SC 1236 wherein the

Supreme Court while discussing „acknowledgement‟ of debt in terms

of section 19 of Limitation Act, held that an admission as regards

liability may be in any form and may be „express‟ or „implied,‟ and

that acknowledgment requires to be construed liberally.The Punjab &

Haryana High Court again in Sumit Singla V Kala Mandir Sarees

and Jewellers, CRM-M-34617-2022 (O&M) decided on 17thAugust,

2022 took contrary view after referring and considering Prajan

Kumar Jain V Ravi Malhotra after relying on Vijay Polymers Pvt.

Ltd. & another V M/s Vinnay Aggarwal. It was observed that the

petitioner/accused has raised an issue as regards his liability in

respect of the dishonoured cheque, it needs to be mentioned

that section 118 and 139 of the Negotiable Instrument Act,1881

embody some presumptions in favour of holder of cheque

particularly as regard to existence of debt or liability which are

rebuttable and can be rebutted by way of leading. It was further

observed that trial Court would be able to take evidence and not the

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 18 Signing Date:13.09.2022 18:38:40 High Court. The learned Single Judge placed reliance on S.

Natarajan V Sama Dharman, Criminal Appeal No. 1524 of 2014

decided by the Supreme Court by observing that whether the debt

was time barred or not can be decided only after the evidence is

adduced being a mixed question of law and fact.

15. The High Court of Karnataka in The Bidar Urban Co-

operative Bank Ltd. V Mr. Gidrsh, Criminal Appeal

No.200057/2016 decided on 17th December, 2020 observed that the

complainant has failed to establish existence of legally recoverable

debt. The trial court has rightly held that mere issuance of cheque

without corresponding legally recoverable debt is not an offence. The

trial court rightly acquitted the accused.

16. It is appearing from perusal of complaint that the respondent

no 2 entered into Assured Return Agreements (Mark „A‟ and „Mark‟)

with the petitioner and Jasween Sandhu on 16th September, 2011 and

all transactions took place between the petitioner and the Jasween

Sandhu in years 2011 as reflected from documents Ex. CW1/B1-B4

and as such whatever was due towards the respondent no 2 from the

petitioner and Jasween Sandhu was in year 2011. The cheque in

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 19 Signing Date:13.09.2022 18:38:40 question Ex. CW1/B was issued on 06.03.2017 which was got

dishonoured as payment was stopped by the petitioner as reflected

from Ex. CW1/C1. During the period with effect from 2011 till

06.03.2017 i.e. day on which cheque was issued, there is no

acknowledgement on behalf of either the petitioner or Jasween

Sandhu within meaning of section 18 of the Limitation Act, 1963.

The language of section 138 of the Negotiable Instruments Act, 1881

is clear and does not mandate any other interpretation except what is

clear mentioned in the section. The proviso attached to section 138

clearly laid down that "debt or other liability" means a legally

enforceable debt or other liability. I am in agreement with the view

taken by Coordinate Benches of this court, Kerala High Court,

Bombay High Court and High Court of Karnataka. The accused

cannot be prosecuted for offence under section 138 of the Negotiable

Instruments Act, 1881 for issuance of cheque for time barred liability

or debt.

17. The trial court took cognizance vide impugned order. Section

190 empowers a Magistrate to take cognizance of an offence in

certain circumstances. Sub-section (1) reads as under:-

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 20 Signing Date:13.09.2022 18:38:40 Cognizance of offences by Magistrates.-1) Subject to the provisions of this Chapter, any Magistrate of the first class, and any Magistrate of the second class specially empowered in this behalf under Sub-section (2), may take cognizance of any offence-

(a) upon receiving a complaint of facts which constitute such offence;

(b) upon a police report of such facts;

(c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed.

18. Cognizance is a stage when a Magistrate applies his mind to

the suspected commission of an offence. The magistrate has to apply

his mind to the facts stated in the police report or complaint before

taking cognizance for coming to the conclusion that there is sufficient

material to proceed with the case. It cannot be taken in a mechanical

or cryptic manner. It is not only against the settled judicial norms but

also reflects lack of application of judicial mind to the facts of the

case. However a Magistrate is not required to consider the defence of

the proposed accused or to evaluate the merits of the material

collected during investigation at time of taking cognizance. It is not

necessary to pass a detail order giving detailed reasons while taking

cognizance. The Supreme Court in Fakhruddin Ahmad V State of

Uttaranchal, (2008) 17 SCC 157 also held as under:-

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 21 Signing Date:13.09.2022 18:38:40 Nevertheless, it is well settled that before a Magistrate can be said to have taken cognizance of an offence, it is imperative that he must have taken notice of the accusations and applied his mind to the allegations made in the complaint or in the police report or the information received from a source other than a police report, as the case may be, and the material filed therewith. It needs little emphasis that it is only when the Magistrate applies his mind and is satisfied that the allegations, if proved, would constitute an offence and decides to initiate proceedings against the alleged offender, that it can be positively stated that he has taken cognizance of the offence. Cognizance is in regard to the offence and not the offender.

19. In the present case, the respondent no 2 in complaint admitted

that the petitioner incurred liability towards the respondent no 2 in

year 2011 but cheque in question was issued in year 2017 which

clearly reflects that the cheque in question was issued towards

discharge of time barred liability.

20. The Supreme Court continuously observed that the

extraordinary power Under Section 482 Code of Criminal Procedure

should be exercised sparingly and with great care and caution and can

be used to prevent abuse of the process of the court or to secure ends

of justice and the exercise of inherent powers entirely depends on

facts and circumstances of each case. Section 482 saves the inherent

power of the High Court and reads as follows:-

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 22 Signing Date:13.09.2022 18:38:40 Saving of inherent powers 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 this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.

21. The impugned order cannot be legally sustained qua the

petitioner and as such the petition is allowed and impugned order is

set aside qua the petitioner. The criminal complaint bearing CC No.

6437 of 2017 titled as Atamjit Singh V. Mrs Amrit Sandhu

Coster& another also stand dismissed qua the petitioner.

22. The present petition alongwith pending applications, if any,

stands disposed of.

SUDHIR KUMAR JAIN (JUDGE) SEPTEMBER 06, 2022 N/KG

Signature Not Verified Digitally Signed By:JITENDRA CRL.M.C 556/2019 AMRIT SANDHU COSTER V STATE & ANOTHER Page 23 Signing Date:13.09.2022 18:38:40