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2019 (10) TMI 159

..... ed by the Petitioner in favour of the complainant have been presented by the complainant in his bank within a period of six months. On their presentation, the same were dishonoured on account of stoppage of payment. Thereafter the complainant issued demand notice to the Petitioner, however, the Petitioner fails to make the payment of the said amount to the complainant. Therefore there is a compliance of mandate of Section 138 of the Negotiable Instruments Act by the Complainant. Whether there is legally enforceable debt existed as asserted by the complainant, and the cheques in question were issued in discharge of the said liability/debt? - HELD THAT:- It is a settled law that at the stage of taking cognizance and summoning or issuing process, the Magistrate is required to apply his judicial mind only with a view to taking cognizance of the offence, In other words, the Magistrate has to find out whether a prima facie case has been made out or not, and the Magistrate is not required to evaluate the merits of the material or evidence in support of the complaint. The Petitioner/Accused in the present case has to adduce evidence to rebut the presumption that the cheques have been given .....

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..... ble Instruments Act on account of dishonour of the post dated cheques mentioned in the Consent Terms arrived at between the Petitioner and Respondent No.1. It is submitted across the bar that the facts involved in all the above Writ Petitions are similar. In all the four Writ Petitions the Petitioner challenges the orders of issuing process against him. The Petitioner-Accused and Respondent No.1-Complainant are the same in all the four Writ Petitions. However the complaints and cheques are different. In Writ Petition No.886 of 2019 the Complainant No. is 2505/SS/2017 and Cheque Nos. are 000043 dated 18/10/2016 and 000044 dated 18/12/2016; in Writ Petition No.887 of 2019 the Complainant No. is 4531/SS/2017 and Cheque No. is 000047 dated 18/04/2017, in Writ Petition No.888 of 2019 the Complainant No. is 3589/SS/2017 and Cheque No. is 000046 dated 18/02/2017 and, in Writ Petition No.889 of 2019 the Complainant No. is 6623/SS/2016 and Cheque No. is 000042 dated 18/08/2016. Therefore, by consent of the learned counsel for the parties, all the four Writ Petitions are heard together and being disposed of by this common judgment and, Writ Petition No.886 of 2019 is being treated as a lead .....

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..... khs the accused issued five post dated cheques in favour of the complainant, each amounting to ₹ 2 Lakhs. According to the complainant, the first cheque dated 18/08/2016 issued by the accused as per consent terms on its presentation was dishonoured for which the complainant has filed complaint bearing CC No.6623/SS/2016 (subject matter of Writ Petition No.889 of 2019) against the accused under Section 138 of the Negotiable Instruments Act which is pending before the learned Metropolitan Magistrate, 44th Court, Andheri for hearing and disposal. The complainant has alleged that the accused had issued Cheques bearing Nos. 000043 and 000044 dated 18/10/2016 and 18/12/2016 respectively each amounting to ₹ 2 Lakhs. When the said cheques were to be deposited by the complainant on due dates for encashment, the accused requested the complainant to wait for little more time, therefore, considering the said request of the accused, the complainant did not deposit the said cheques on the due dates. However, finally the complainant deposited both the cheques on 10/01/2017 in his bank viz. HDFC Bank, Indralok Branch, Lokhandwala Complex, Andheri (W), Mumbai for encashment, but the sai .....

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..... e case of the Petitioner that the complainant identified his signature, but the police officer then present Mr. Desai gestured the complainant not to identify, and added offence under Sections 465, 467, 468, 34 of the Indian Penal Code. The said police officer also seized the deposit amount from the landlord of the house where the Petitioner was residing and hence they had to shift to the address mentioned in the title. It is further averred that after completing the investigation, the charge sheet was filed before the Trial Court vide CC No.1417/PW/2011 on 25/05/2011 wherein the daughter of the Petitioner was shown as wanted on the basis of the lame allegations. It is further averred that even the daughter of Petitioner used to visit the police station as her parents were detained in the police station, but she was never interrogated. Thereafter the investigating officer arrested the daughter of the Petitioner from her place of work on 16/06/2016, and during her detention in the police station, the police officer Gunmai and the complainant threatened the Petitioner of getting her detained in custody for a long period by opposing the bail application, if they do not agree to settle .....

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..... ing for the Petitioner submits that there exists no legally enforceable debt or liability as asserted by Respondent No.1, hence offence under Section 138 of Negotiable Instruments Act is not made out. She submits that the allegation of the complainant that the Petitioner/accused admitted liability of ₹ 12 Lakhs and executed consent terms dated 17/06/2016 is false as it is clear from the consent terms that nowhere in the consent terms the accused has admitted his liability. It is submitted that because of arrest of daughter and, the threats given by the police officer and complainant of getting her detained in custody, the Petitioner was compelled to execute the said consent terms and, extorted pay order and cheques from the Petitioner. According to her, the said consent terms were executed under duress and coercion which can be inferred from the fact that the date of consent terms is 17/06/2016 and the date of arrest of the daughter of accused is 16/06/2016. It is also submitted that the Petitioner has been victimized by the complainant with the aid and abetment of the police officer. It is further submitted that admittedly the cheques were not issued towards legally enforcea .....

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..... the Petitioner and his wife, but the accused cheated the complainant for their wrongful gain. It is further submitted that on 17/06/2016 the Petitioner has entered into consent terms with the complainant to settled the dispute in question, and pursuant to the said consent terms, the Petitioner issued post dated cheques in favour of the complainant. It is also submitted that the said cheques when presented for encashment, were dishonoured. It is also submitted that stopping the payment of the said cheques on the part of the Petitioner is totally contrary to the terms and conditions as mentioned in the consent terms and the said act of the Petitioner amounts to cheating. Petitioner and his wife are the agent, and the Petitioner misappropriated the amount of the complainant and used the said amount for their personal purpose. The learned counsel for the complainant further submits that there are bank statements and records showing that the Petitioner has withdrawn the amount. The learned counsel for the Respondent No.1 submits that by signing the consent terms, the Petitioner has admitted his liability to pay the amount of ₹ 12 Lakhs to the Complainant. He submits that the basi .....

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..... Rupees Twelve Lac only) to the party of the first part in the following manner :- a. ₹ 2,00,000/- On execution of this consent terms by Pay order. b. ₹ 2,00,000/- On 18.08.2016 c. ₹ 2,00,000/- On 18.10.2016 d. ₹ 2,00,000/- On 18.12.2016 e. ₹ 2,00,000/- On 18.02.2017 f. ₹ 2,00,000/- On 18.04.2017 2. That Mr. Nazim Karim Mumbrawala of the party of the second part shall issue the post dated account payee cheques in favour of the party of the first part towards the above stated payment as defined in sub-clause (b), (c), (d), (e) and (f) of Para (1) of this consent term with an undertaking that the said cheques shall be honoured by his bankers on the due dates as appear on the said cheques, moreover the party of the second part further undertake that they shall not instruct their bankers to stop the payment of the said cheques, nor they shall close their bank account till realization of the said cheques. 3. That in the event of dishonor of the said cheque/s, the party of the second part shall make the payment of the equal amount of the bounced cheque to the party of the first part, failing which the party of the first part shall have rights to proceed .....

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..... ent of the said cheques. Admittedly the cheques were issued by the Petitioner in terms of the consent terms. The said cheques were admittedly signed by the Petitioner. According to the Petitioner, under the threat of detention of the daughter, the police officer and Respondent extorted pay order of ₹ 2 Lakhs and five cheques for a sum of ₹ 2,00,000/- each from the Petitioner and compelled to sign the documents prepared by them, and they were not liable to pay the amount to the complainant as also the police officer Gunmai was pressurizing the Petitioner to encash the cheques before getting the complaint withdrawn or quashed, and therefore, the Petitioner addressed a letter dated 12/08/2016 to his banker to stop the payment in respect of the cheques,which according to them, were obtained under duress and coercion by the complainant. Admittedly on the instructions of the Petitioner, the payment of the said cheques was stopped though in terms of consent terms the Petitioner has undertaken not to stop the payment of the said cheques. 11. In order to appreciate legal submissions vis-a-vis subject matters involved in the Petitions, it would be apt to advert to the provisions .....

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..... to the Petitioner, however, the Petitioner fails to make the payment of the said amount to the complainant. Therefore there is a compliance of mandate of Section 138 of the Negotiable Instruments Act by the Complainant. 12. The question that remains to be considered is, whether there is legally enforceable debt existed as asserted by the complainant, and the cheques in question were issued in discharge of the said liability/debt. According to the learned counsel appearing for the Petitioner, there exists no legally enforceable debt or liability as asserted by Respondent No.1, hence offence under Section 138 of Negotiable Instruments Act is not made out, and nowhere in the consent terms the accused has admitted his liability. In support of the said contention the learned counsel for the Petitioner sought to place reliance on Lalit Kumar Sharma s case (supra), Indus Airways Pvt. Ltd s case (supra) and Rakesh Kumar s case (supra). (i) In Lalit Kumar Sharm s case, the question arose before the Supreme Court was, whether dishonour of second cheque created a new liability? In the said case the cheques issued on 30.11.1999 and 10.11.1999, on their presentation, were returned unpaid with .....

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..... of the Petitioner released on bail, the Petitioner then stopped the payment of their post dated cheques. (ii) Now coming to Indus Airways Pvt. Ltd. s case (supra). In the said case the question that was arose before the Supreme Court for consideration is, whether the post dated cheques issued by the Appellants - purchasers as an advance payment in respect of purchase orders could be considered in discharge of legally enforceable debt or other liability, and, if so whether the dishonour of such cheques amounts to an offence under Section 138 of the Negotiable Instruments Act, 1881. In the said case the purchasers issued two post dated cheques towards two purchase orders for supply of certain aircraft parts with Respondent No.1 therein. The said cheques got dishonoured when they were presented on the ground that the purchasers had stopped payment. However, in the said case, the supplier i.e. Respondent No.1 received letter dated 22/03/2007 from the purchasers i.e. the appellants cancelling the purchase orders and requesting the supplier to return both the cheques. The supplier sent a notice to the purchasers and then filed a complaint against the purchasers under Section 138 of the .....

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..... ence/offences are disclosed or otherwise? However, when the case is decided after trial and resulted in conviction or acquittal, the higher courts including an appellate court can look into the entire evidence so as to arrived at a proper conclusion. 13. In order to rebut the contention of the learned counsel appearing for the Petitioner that, there exists no legal enforceable liability, the learned counsel appearing for the Respondent No.1 complainant invites attention of this Court to the letter dated 10/09/2009 addressed by the mother of the Complainant to the wife of Petitioner Mrs. Zubeda Nazim Mumbrawala. By the said letter the mother of the complainant issued some account payee cheques to his son i.e. the complainant with the consent to hand over the said cheqeus to the wife of the Petitioner to deposit in her account and pay cash on realization of the said cheques, and the said cheques were issued by the mother of the complainant for the needs and requirements during his stay in Mumbai as he does not have any bank account since he was residing in Mumbai as Paying Guest and does not have any residential proof in Mumbai. According to the complainant, the Petitioner misappropr .....

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..... unclaimed from the presumption under Section 27 General Clauses Act of due service available therefrom it is of deemed service and also held in this regard by the Three Judge Bench in C.C. Alavi Haji Vs. Palapetty Muhammed to said conclusion for not even after filing of the private complaint case taken cognizance and service of summons accused not chosen to pay the said cheque amount, even the sale agreement mentioned with reference to compromise in the statutory notice when it is clear of the cheque issued for ₹ 5,00,000/- returned dishonoured in which demand to pay also if other amounts mentioned the notice no way invalid therefrom as rightly concluded by the Courts below. The learned counsel for Respondent No.1 also placed reliance on the judgment of the Supreme Court in Goaplast Pvt. Ltd. in support of his contention that instructions on the part of the Petitioner to stop the payment of post dated cheques prior to date of cheques does not absolve the Petitioner of the liability under Section 138 of the Negotiable Instruments Act as the presumption under Section 139 is attracted. Paragraph 6 of the said judgment is relevant and, for the sake of ready reference the same is .....

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..... ad taken a contrary view. We are in respectful agreement with the view taken in Modi's case. The said view is in consonance with the object of the legislation. On the faith of payment by way of a post-dated cheque, the payee alters his position by accepting the cheque. If stoppage of payment before the due date of the cheque is allowed to take the transaction out of the purview of Section 138 of the Act, it will shake the confidence which a cheque is otherwise intended to inspire regarding payment being available on the due date. In the aforesaid judgment, the Supreme Court considering the provisions of Sections 138 and 139, held that the presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. It is also held by the Supreme Court that this presumption coupled with the object of chapter XVII of the Act which is of promote the efficacy of banking operation and to ensure credibility in business transactions through banks persuades us to take a view that by countermanding payment of post dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act. It is also held tha .....

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..... inal proceedings is called for only in a case where the complaint does not disclose any offence, or is frivolous, vexatious, or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same. It is not necessary that a meticulous analysis of the case should be done before the Trial to find out whether the case would end in conviction or acquittal. If it appears on a reading of the complaint and consideration of the allegations therein, in the light of the statement made on oath that the ingredients of the offence are disclosed, there would be no justification for the High Court to interfere. 6. Defences that may be available, or facts/aspects which when established during the trial, may lead to acquittal, are not grounds for quashing the complaint at the threshold. At that stage, the only question relevant is whether the averments in the complaint spell out the ingredients of a criminal offence or not. 9. Having heard the learned Senior Counsel and examined the material on record, we are of the considered view that the High Court ought not to have set aside th .....

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..... ther judgment of the Supreme Court inn MMTC Ltd and another v/s. MEDCHL Chemicals and Pharma (P) Ltd and another (2002) 1 SCC 234. The Supreme Court in the said case held that the High Court could not examine the merits of the complaint pending in trial Court and could not merely because application did not contain a specific allegation to the contrary hold that the cheques were not issued for any debt or existing liability, and the onus to prove the non-existence of a debt or liability lay on the drawer and had to be discharged at the trial. The Supreme Court in Paragraph 17 of the said judgment observed as under :- There is therefore no requirement that the complainant must specifically allege in the complaint that there was subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage merely on the basis of averments in the Petitions filed by them the High Court could not have concluded that there was no existing debt or liability. In the present case, prima facie it appears that the cheques were signed by the Petitioner and issued in favour of the complainant in dischargin .....

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