TMI Blog2017 (4) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... rchaser may be liable for breach of the contract, when a contract provides that the purchaser has to pay in advance and cheque towards advance payment is dishonoured, it will not give rise to criminal liability under Section 138 of the Act. Issuance of cheque towards advance payment could not be considered as discharge of any subsisting liability. In view of the above, this application succeeds and is hereby allowed. The proceedings of the Criminal Case pending in the Court of the learned Additional Chief Metropolitan Magistrate, Court No.36, Ahmedabad are hereby quashed. - CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE FIR/ORDER) NO. 27075 of 2016 - - - Dated:- 11-4-2017 - MR. J.B.PARDIWALA, JJ. FOR THE APPLICANT : ADITYA D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urned stating that payment stopped by drawer . We would like to draw your attention to the letter signed and submitted by you to my client on 9/6/2015 that you yourself have agreed to the term no.2, which clearly states that security cheque is towards security of payment and will be deposited only in the course of nonpayment beyond the agree limit. 3 On the own showing of the complainant, the cheque was a security cheque, which came to be deposited on 8th March 2016. The law in this regard is wellsettled. In the case of Sampelly Satyanarayan Rao vs. Indian Renewable Energy Development Agency Limited [(2016) 10 SCC 458], the Supreme Court has explained in details the proposition of law so far as the postdated cheque described as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any subsisting liability. View to this effect of the Andhra Pradesh High Court in Swastik Coaters (P) Ltd. Versus Deepak Bros. [1997 Cr.L.J. 1942], Madras High Court in Balaji Seafoods Exports (India) Ltd. Versus Mac Industries Ltd. [(1999) 1 CTC 6], Gujarat High Court in Shanku Concretes (P) Ltd. Versus State of Gujarat [2000 Cri.L.J. 1988] and Kerala High Court in Supply House versus Ullas [2006 Cri.L.J. 4330] was held to be correct view as against the view of Delhi High Court in Magnum Aviation (P) Ltd. Versus State [(2010) 172 DLT 91] and Mojj Engg. Systems Ltd. Versus A.B. Sugars Ltd. [(2008) 154 DLT 579] which was disapproved. 10. We have given due consideration to the submission advanced on behalf of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity towards discharge of acknowledged and admitted debt under a loan transaction. Dishonour of cheque issued for discharge of later liability is clearly covered by the statute in question. Admittedly, on the date of the cheque there was a debt/liability in presenti in terms of the loan agreement, as against the case of Indus Airways (supra) where the purchase order had been cancelled and cheque issued towards advance payment for the purchase order was dishonoured. In that case, it was found that the cheque had not been issued for discharge of liability but as advance for the purchase order which was cancelled. Keeping in mind this fine but real distinction, the said judgment cannot be applied to a case of present nature where the cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X
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