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2022 (9) TMI 995 - Indian Laws
Dishonor of Cheque - legally enforceable debt or not - ingredients of section 138 of NI Act complied with or not - Unlawful consideration - allegation is that the agreement alleged to have been entered into between the parties is a void contract as the consideration alleged was unlawful and the agreement itself was against public policy - it is also alleged that the cheque in dispute had been issued only as a security for the debt incurred by the petitioner's partner Ganesha Kannan - HELD THAT:-Section 23 of Indian Contract Act says that the consideration or object of the agreement is unlawful if it is fraudulent. To put it in other way, in order to bring the case within the purview of Section 23, it is necessary to show that the object of the contract or consideration of the agreement or the agreement itself is unlawful - In the case on hand, though the petitioner has alleged that the agreement is void and that the consideration is illegal, immoral and against public policy, he has not elaborated anything further. Moreover, whether the cheque allegedly issued in pursuance of the compromise agreement can be considered as the same was given for discharging the legally enforceable debt.
In the case on hand, the question as to whether there was a dispute as contemplated in the compromise agreement, which obviated the obligation of the petitioner to honour the cheque which was issued in pursuance of the agreement cannot be gone into at this stage and that too in the proceedings under Section 482 Cr.P.C., and it is a matter for trial.
Whether the cheque in dispute has been issued as a security? - HELD THAT:- In the case on hand, the petitioner himself has specifically stated in the quash petition that the cheque in dispute was given only as a security. If that be the case of the petitioner, then it cannot be stated that no offence is made out, since the cheque issued by him has been dishonoured. Even otherwise, the question whether the petitioner had issued the cheque in dispute as security, pursuant to the compromise agreement entered into between the parties and whether at the time when the cheque was presented, it was not for discharge of any debt or other liability cannot be gone into by this Court in these proceedings and the same can only be determined during the trial of the case - This Court has no hesitation to hold that the contention of the petitioner that the prosecution initiated by the respondent is not maintainable as the cheque was issued as a security cannot legally be entertained.
A perusal of the complaint and other records available, makes out a prima facie case against the petitioner at this stage and there appear to be sufficient ground for proceeding against the petitioner. Hence, this Court concludes that the Criminal Original Petition is devoid of merits and the same is liable to be dismissed - Criminal Original Petition is dismissed.