TMI Blog2021 (11) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... ged to be paid, the complainant may serve a notice upon the accused to make the payment within thirty days from the receipt of the said notice - the complaint filed by the respondent, if viewed in this context, does not lack the ingredients of the offence under Section 138 N.I. Act. In view of the clear provisions of Sections 138 and 139 of N.I. Act and the legal position on the point explained by the Hon ble Supreme Court, there is hardly any reason to doubt the proposition that the probable defence of the accused in a complaint under Section 138 of N.I. Act, that the cheque issued by him which was later dishonored was not for any legally enforceable debt or liability, can be raised by the accused only at the stage of leading evidence and cannot be considered by the Magistrate at the threshold at the time of taking cognizance. It, however, remains to be seen that in a case where, from a plain reading of the complaint and the documents appended thereto, it clearly comes out that the cheque issued by the accused, as per own showings of the complainant, was not for discharge of any legally enforceable debt or other liability. Petition dismissed. - CRM(M) 278/2021, Crl (M) 100 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of taking cognizance, was only to ensure that the ingredients of Section 138 of N.I. Act were pleaded and demonstrated and once, it was so found, the Magistrate had no option, but to take the cognizance. He further submits that the petitioner has not come to this Court with clean hands, in that, the petitioner in his statement recorded before the trial Court under Section 251 Cr.P.C, has not set up the defence which he has pleaded in this petition, rather he has completely denied the contents of the complaint being false and misleading allegations. On these short submissions, learned counsel for the respondent seeks dismissal of this petition. 4 Having heard learned counsel for the parties and perused the record, it is necessary to set out, though briefly, the relevant facts as may be necessary for disposal of this petition. The case projected by the respondent in the complaint filed by him before the trial Court is that he agreed to sell a piece of land measuring 80 ft. x 200 ft. to the petitioner for consideration of ₹ 40.00 lakhs and an agreement to sell dated 17.01.2018 was executed at Kargil, Ladakh. It is pleaded that an amount of ₹ 20.00 lakhs was paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the parties and the law cited at Bar, I am of the considered view that it is not a case of converting the civil dispute into a criminal case to harass the petitioner as alleged. 8 It is true that if the dispute has the contours of dispute of civil nature and does not constitute a criminal offence, this Court may be justified to quash the complaint or the criminal proceedings as the case may be, in the exercise of inherent power under Section 482 Cr.P.C. The criminal proceedings ought not to be permitted to degenerate into weapon of harassment. This issue was considered by this Court in the case of Zulfikar Hussain Dar vs Aijaz Ahmad Dr (CRM(M) No. 146/2021, decided on 17.05.2021). In paragraph (26) of the judgment, this Court concluded thus: 26. There is no denying the proposition that in a case involving the dispute purely of a civil nature, the criminal law cannot be set in motion but, it is equally well settled that certain offences like the offences of cheating, criminal breach of trust, criminal misappropriation and offence under section 138 of the NI Act do arise out of the civil transactions and if the ingredients of offence/offences are made out, criminal law too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the agreement to sell. Though it is well settled that an agreement to sell does not create any interest in immoveable property, it nonetheless constitutes a legally enforceable contract between the parties to it. A payment which is made in pursuance of such an agreement is hence a payment made in pursuance of a duly enforceable debt or liability for the purposes of Section 138 . 10 It is, thus, trite law that that the offence under Section 138 of N.I. Act is always committed in the course of civil transactions and if a cheque is given by the accused to the complainant in the discharge of his civil liability, which, of course, must be the legally enforceable debt or liability and same, if presented before the Bank, is returned unpaid by the Bank for insufficiency of funds or that it exceeds the amount arranged to be paid, the complainant may serve a notice upon the accused to make the payment within thirty days from the receipt of the said notice. It is only after the accused fails to make the payment represented by the dishonoured cheque within the stipulated period, he becomes liable to be proceeded under Section 138 of N.I. Act. The complainant, in such eventuality, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner to the respondent towards consideration of the land is also not in dispute. It is also not in dispute that the respondent has executed a formal sale deed in favour of daughter of the petitioner. The cheque when presented by the respondent for encashment to his banker, has been returned unpaid due to insufficiency of funds in the account maintained by the petitioner. The petitioner by way of notice was called upon to pay the amount of cheque and on his failure to make the payment within the stipulated period, the complaint was filed within the period of limitation. That being so, it is difficult for this Court to accept the contention of the petitioner that, though, he delivered the dishonored cheque to the respondent as part of sale consideration, yet, the actual sale deed was not executed by the respondent in his favour, and that the sale deed executed by him in favour of his daughter is a transaction altogether different. This, if true, may constitute a valid defence which the petitioner is entitled to take during the course of trial. 13 The contention of the petitioner that the defence put forth by him is a probable defence apparent from the complaint and the documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemical and Pharma (P) Ltd. And Anr.[1] was pleased to hold that cheque dishonour on account of drawer s stop payment instruction constitutes an offence under Section 138 of the NI Act but it is subject to the rebuttable presumption under Section 139 of the NI Act as the same can be rebutted by the drawer even at the first instance. It was held therein that in order to escape liability under Section 139, the accused has to show that dishonour was not due to insufficiency of funds but there was valid cause, including absence of any debt or liability for the stop payment instruction to the bank. The specific observations of the Court in this regard may be quoted for ready reference which are as follows: The authority shows that even when the cheque is dishonoured by reason of stop-payment instructions by virtue of Section 139 the court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the stop-payment instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there were suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be a category which is subject to rebuttal and hence would be an offence only if the drawer of the cheque fails to discharge the burden of rebuttal . (underlining mine) 16 From a reading of the supplementary judgment written by Justice Gyan Sudha Misra in its entirety and particularly the paragraphs reproduced hereinabove, it transpires that the learned Judge has suggested that in appropriate cases, where the probable defence of the accused that the cheque was not for discharge of any legally enforceable debt or liability, can be gauged from the contents of the complaint and the appended documents, the trial Magistrate may be justified in refusing to entertain the complaint, but the said observations of learned Judge in its supplementary judgment have not found favour by the Hon ble Supreme Court in its later judgment rendered in the case of Shiv Kumar vs. Ramavtar Agarwal, (2020) 12 SCC 500 wherein a Division Bench of Hon ble Supreme Court while upholding the observations made in paragraphs (23) and (32) of the impugned judgment of High Court concluded that rebuttal can be made with reference to the evidence of the prosecution as well as the defence. What was upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with reference to the evidence of the prosecution as well as of defence. (emphasis supplied) 17 In view of the clear provisions of Sections 138 and 139 of N.I. Act and the legal position on the point explained by the Hon ble Supreme Court, there is hardly any reason to doubt the proposition that the probable defence of the accused in a complaint under Section 138 of N.I. Act, that the cheque issued by him which was later dishonored was not for any legally enforceable debt or liability, can be raised by the accused only at the stage of leading evidence and cannot be considered by the Magistrate at the threshold at the time of taking cognizance. It, however, remains to be seen that in a case where, from a plain reading of the complaint and the documents appended thereto, it clearly comes out that the cheque issued by the accused, as per own showings of the complainant, was not for discharge of any legally enforceable debt or other liability. Here, I am of the view that in such a rare situation, where there is no dispute on facts and it is clearly made out from the complaint and the appended documents that the dishonored cheque issued by the accused is admittedly for a cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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