Home Case Index All Cases Indian Laws Indian Laws + HC Indian Laws - 2017 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (4) TMI 1068 - GUJARAT HIGH COURTComplain under Section 138 of the Negotiable Instruments Act for the dishonour of the cheques - Held that:- In order to attract the penal provisions for the bouncing of a cheque, it is essential that the dishonoured cheque should have been issued in discharge, wholly or in part, or any debt or other liability of the drawer to the payee. The explanation to Section 138 of the Negotiable Instruments Act defines the expression “debt or other liability” as a legally enforceable debt or other liability. Unless the two conditions set out in Section 138 of the Act are satisfied, no criminal liability can be fastened. This is also in accordance with the general scheme as laid down in Section 118(a) of the Negotiable Instruments Act. It also enforces the doctrine of consideration as laid down in Section 2(d) of the Indian Contract Act, 1872. The applicants have levelled serious allegations against the officials of the department of exerting undue pressure, threat and duress while obtaining the cheques in question. Indisputably, as on date, the adjudication at the end of the competent authority under the Act is yet to take place. I find it extremely difficult to accept the argument of the learned counsel appearing for the department that the liability was fixed on the basis of the statements made by the applicant no.2 herein dated 7th November 2012 and 8th November 2012 respectively under Section 14 of the Central Excise Act, 1944. It appears that the department construed the two statements recorded under Section 14 of the Act, 1944 as a confession on the part of the applicants of indulging into fraudulent availment of the Cenvat Credit of ₹ 3.27 crore on the basis of phony cenventible invoices issued by the various ship breaking units of Bhavnagar. Let me assume for the moment that at the end of the search operation the officials were able to collect something incriminating against the applicants as regards the evasion of the excise duty. However, it cannot be said that the cheques which were obtained by the department were towards the discharge of the existing enforceable debt or liability. The liability was yet to be determined by the competent authority under the provisions of the Act. In the absence of any adjudication by a competent authority under the provisions of the Act as regards the liability of the applicants to pay the excise duty, it cannot be said that on the date when the cheques were drawn there was an existing enforceable debt or liability. For the foregoing reasons, all the three applications are allowed. The proceedings of the Criminal Cases pending in the court of the learned Metropolitan Magistrate, Court No.36, Ahmedabad, are hereby quashed.
|