2015 (9) TMI 1675 - HC - Indian Laws

Dishonor of Cheque - section 138 of NI Act - existence of legally enforceable debt or not - validity of second complaint - HELD THAT - It is an undisputed fact that in respect of earlier cheque issued by the present applicant a criminal case was preferred u/S. 138 of the Negotiable Instruments Act and a judgment of conviction was also delivered by the Judicial Magistrate First Class Narsingarh. Fine was also imposed. An appeal was preferred against the judgment of conviction ie. No. 231/2007 and both the parties in Lok Adalat on 25/7/2000 have agreed to withdraw pending litigation. A cheque was also given in the light of the settlement of Rs. 3, 51, 750/- and the same has been dishonoured. The second complaint has been preferred on account of dishonour of the second cheque. The apex Court in the case of LALIT KUMAR SHARMA VERSUS STATE OF UP. 2008 (5) TMI 429 - SUPREME COURT in almost similar circumstances has held that the question of entertaining a second complaint does not arise as the cheque was not issued in discharge of debt or liability of the Company. It was issued on account of a settlement arrived at between the parties. Appeal allowed.

Summary

Issues Involved:
1. Interpretation of Section 138 of the Negotiable Instruments Act regarding dishonour of cheques.
2. Validity of a second complaint filed after a settlement and dishonour of a cheque.
3. Consideration of legally enforceable debt in relation to cheque dishonour cases.

Analysis:

Issue 1: Interpretation of Section 138 of the Negotiable Instruments Act
The judgment discusses the provisions of Section 138 of the Act, emphasizing the conditions under which the dishonour of a cheque constitutes an offense. It highlights the requirement of a legally enforceable debt or liability for the offense to be committed, along with the consequences for the drawer of the dishonoured cheque.

Issue 2: Validity of a Second Complaint After Settlement
The case involves a situation where a settlement was reached between the parties in a Lok Adalat, leading to the issuance of a cheque. However, the cheque was dishonoured, prompting the filing of a second complaint. The petitioner argued that the second complaint was not maintainable as the cheque was issued as part of a compromise and not towards payment of a new debt. The respondent contended that since the amount was not received, the second complaint was justified.

Issue 3: Consideration of Legally Enforceable Debt
The judgment analyzed the concept of a legally enforceable debt in the context of the dishonour of cheques. It examined whether the issuance of the second cheque was in discharge of an existing debt or liability, emphasizing that the second cheque did not create a new liability but was part of the compromise between the parties. The court referred to a previous apex court judgment to support the conclusion that the second complaint was misconceived and that the appeal should be allowed.

In conclusion, the High Court set aside the impugned orders and quashed the complaint based on the interpretation of Section 138 of the Negotiable Instruments Act and the circumstances surrounding the issuance and dishonour of the cheque after a settlement. The respondents were given the option to pursue appropriate action for enforcing the settlement or file a recovery suit, maintaining the distinction between the legal consequences of dishonoured cheques and settlement agreements.