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2022 (2) TMI 849 - HC - Indian LawsDishonor of Cheque - existence of enforceable debt or not - Issuance of warrant of attachment - HELD THAT:- he earlier order dated 22.03.2016 passed by the executing Court at Rajkot below application Exhibit-15 was quashed and set aside by the coordinate Bench of this Court vide order passed in Special Civil Application No.7417 of 2016 dated 18.11.2016 and the matter was remanded to the executing Court at Rajkot for consideration afresh. The executing Court at Rajkot considered the matter afresh; however, it stood by the conclusion arrived at in its earlier order dated 22.03.2016 by passing the order dated 20.08.2019 below applications Exhibits – 11 and 15. The said order dated 20.08.2019 was assailed before this Court in Special Civil Application No.15137 of 2019 and by judgment and order dated 16.10.2019, the subsequent order dated 20.08.2019 passed by the executing Court at Rajkot was quashed and set aside by the Division Bench of this Court. Thus, both the orders dated 22.03.2016 and 20.08.2019 passed by the executing Court at Rajkot below Exhibits – 11 & 15 were quashed and set aside by this Court after recording elaborate reasons. Coming to the proceedings initiated under the NI Act, itis not in dispute that the cheque in question was given as ‘security’. The Deed of Undertaking dated 07.04.2016 executed by and between the parties in the presence of the Court Bailiff lays down the terms and conditions of payment. It specifically mentions that the cheque in question has been been given as ‘security’ and also lays down the conditions as to when the said cheque shall be deposited. It is a settled proposition of law that proceedings under Section 138 of the NI Act would lie only in respect of any ‘enforceable debt’. In the case of LALIT KUMAR SHARMA VERSUS STATE OF UP. [2008 (5) TMI 429 - SUPREME COURT] the Apex Court held that the second cheque dated 29.07.2000 was issued in terms of the compromise and it did not create a new liability and therefore, the same cannot be said to have been issued towards payment of debt, even if the compromise had not fructified. In the present case also, evidently, the cheque in question was given as ‘security’ and not in respect of any ‘enforceable debt’, which the applicant No.1-Company was required to pay to the respondent-complainant. In paragraph-1 of the complaint filed under Section 138 of the NI Act, the respondent-complainant itself has stated that the cheque in question has been given in view of the compromise arrived at between the parties. Thus, as per the admission of the complainant also, the cheque in question was not issued in respect of any ‘enforceable debt’, which the applicant No.1 Company was required to pay to the respondent-complainant. Considering the aforesaid factual aspects and in view of the principle laid down in Lalit Kumar Sharma’s case, the impugned proceedings initiated under the provisions of the NI Act deserves to be quashed and set aside. The impugned order dated 18.11.2019 passed by the Court of learned 13th Additional Chief Judicial Magistrate, Rajkot below Exhibit-1 as also the complaint filed by respondent No.2 under section 138 of the NI Act are quashed and set aside - application allowed.
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