TMI Blog2007 (11) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... the said MOU the confirming party was to construct a group housing building on the said property. In pursuance of said MOU a sum of ₹ 11.5 lacs was received by the owners from the confirming party. However, the aforesaid MOU was cancelled by mutual agreement between the parties to the MOU. 6. Thereafter, on 17.1.2001, a collaboration agreement was entered into between the respondent No. 2, Rakesh Bedi, the confirming party and Ansal Buildwell Co. As per the agreement, the Ansal Buildwell Co. had to construct the multi-storeyed residential building on the said property. 7. Clause V of the aforesaid agreement around which controversy in the present petition revolves stipulated that as a security for due performance of agreement, a sum of ₹ 138 lacs was to be deposited by the Ansal Buildwell Co. with the respondent No. 2 and other owner of the said property. 8. Clause V reads as under: V. Security Deposit (a) The Builder shall deposit with the owners a total sum of ₹ 138 lakhs towards security for due compliance of the terms of this Agreement by the Builder. A sum of ₹ 11.5 lakhs has already been received by the owners from the Confirming Party, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt of the notice the respondent No. 2 filed a complaint against the said company as also its 5 directors including the petitioners under Section 138 of the N.I. Act. 12. On a prima facie consideration of the complaint and documents filed along with the complaint, the learned Metropolitan Magistrate summoned the accused persons to face trial for an offence under Section 138 of the N.I. Act. 13. During hearing of the instant petition, the learned Counsel for the petitioners submitted that the sine qua non for an action under Section 138 of the N.I. Act is that the dishonoured cheque has been issued towards discharge of a debt or other liability . That the expression other liability envisaged under Section 138 is akin to a debt or money owed. Learned Counsel elaborated that the Section 118(a) and 139 of the N.I. Act raise a statutory presumption that the dishonoured cheque must have been drawn/made for a consideration, meaning thereby, that there must be some money due to the drawee from the drawer in lieu of which cheque was drawn. That the cheques in question cannot be taken to be issued in lieu of any money due to the complainant for the reason amount covered by the ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... class, category or genus are followed by general words. In such a case, the general words take their meaning from the preceding particular words because the legislature by using the particular words of a distinct genus has shown its intention to that effect. Thus, before the rule of ejusdem generis is applied it is a pre-requisite that there must be a distinct genus, which must comprise of more than one species. Consequently, if a general word follows only one particular word, that single particular word does not constitute a distinct genus and therefore rule of ejusdem generis cannot be applied in such a case. 19. In Section 138 of the N.I. Act, the general expression other liability follows only one single expression, i.e. debt which is not a distinct genus. In the absence of distinct genus the rule of ejusdem generis has no application and therefore the expression other liability cannot be interpreted in the light of the preceding word debt . 20. The Supreme Court had the occasion to consider the ambit of the expression other liability in the decision reported as I.C.D.S. Ltd. v. Beemna Shabeer and Anr. . In the said case, the issue under consideration was as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions raised by the respondents. 21. From the afore-noted observations of the Supreme Court in I.C.D.S case (supra), it is clear that the expression other liability must be given its ordinary and grammatical meaning. 22. Notwithstanding that Section 138 of the N.I. Act is a penal provision, phrases used therein must be considered in the same sense as people in the commercial world would understand the same. 23. Thus, if given its full meaning, the expression other liability within its broad sweep would include any liability to pay . 24. Matter can be looked at from the point of view of contractual terms which are fundamental to a contract and terms which are not. 25. The doctrine of fundamental terms of a contract as enunciated in the decision reported as Suisse Atlantique Societe D'Armement Maritime S.A. v. N.V. Rotterdamche Kolen Centrale (1967) 1 AC 361 (Pg 422) is as under: A fundamental term of a contract is a stipulation which the parties have agreed either expressly or by necessary implication or which the general law regards as a condition which goes to the root of the contract so that any breach of that term may at once and without reference to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue issued towards discharge of a liability to pay notwithstanding that the money is by way of security for due performance of the contract. A cheque given as security is not to be encashed in presenti. It becomes enforceable if an obligation is future is not enforced. It is not tendered in discharge of a liability which has accrued. 32. Thus where a cheque forms part of a consideration under a contract it is paid towards a liability. 33. Section 2(d) of the Indian Contract Act, 1972 defines consideration as under: When at the desire of the promisor, the promiseor any other person has done or abstained from doing, or does or abstains from doing, or promises to do or abstain from doing, something, such act or abstinence or promise is called a consideration for the promise. 34. Jural concept of consideration is as: A valuable consideration in the sense of the law, may consist either in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by the other. 35. The jural concept of the consideration requires that something of value must be given, and that this can either be a be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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