TMI Blog2022 (5) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... tute a defence and the same has to be established in the course of trial. When a cheque has been issued, there cannot be any hard and fast rule that the cheque which is issued as a security, can never be presented by the drawee of the cheque. If such is the understanding, a cheque would also be reduced to an on demand promissory note and in all circumstances, it would only be a civil litigation to recover the amount, which is not the intention of the statute. Therefore, when a cheque has been issued as a security, the consequences flowing therefrom is also known to the drawer of the cheque, and in the circumstances, if the cheque is presented and dishonoured, the holder of the cheque/drawee would have the option to initiate civil proceedings for recovery or criminal proceedings for punishment in a fact situation. But, in any event, it is not for the drawer of the cheque to dictate terms with regard to the nature of litigation. The defences that are raised by the learned counsel for the petitioner are all questions of fact that have to be decided in the course of trial - Petition dismissed. - Criminal Petition No. 8922 of 2018 - - - Dated:- 29-4-2022 - Hon ble Sri Justic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent-State. 4. Applications were invited by Sri Durga Malleswara Swamy Varla Devasthanam under E- procurement system and also sealed tenders for license rights for spot photos at Up Hills of Indrakeeladri for a period of two years commending from 01.06.2016 to 31.05.2018, through a paper Notification dated 18.05.2016. E.M.D. of Rs.5,00,000/- was fixed by the Devasthanam. Thereafter, the petitioner/accused was declared as the highest bidder for an amount of Rs.36,06,000/- per year. Accordingly, the petitioner/ accused paid annual rent of Rs.36,06,000/- for the period commencing from 01.06.2016 to 31.05.2017 by virtue of six demand drafts. Thereafter, towards half of the annual license fee payable in advance for the second year commencing from 01.06.2017 to 31.05.2018, the petitioner/accused issued post dated cheque bearing No.811302 for Rs.19,83,300/- dated 30.04.2017 drawn on Syndicate Bank (Main), Vijayawada-1, with an assurance that the said cheque will be honoured on presentation of the same. The complainant presented the said cheque in its Banker viz. YES Bank Limited, Vijayawada-10 on 10.05.2017, but the same was returned with a return Memo dated 11.05.2017 with endorse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an offence under Section 138 of the NI Act. The Delhi High Court has travelled beyond the scope of Section 138 of the NI Act by holding that the purpose of enacting Section 138 of the NI Act would stand defeated if after placing orders and giving advance payments, the instructions for stop payments are issued and orders are cancelled. In what we have discussed above, if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability. A perusal of the above judgment goes to show that the cheque is issued as advance payment for the purchase of goods and for any reason the purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, it is observed that the cheque cannot be said to have been drawn for an existing debt or liability. 7. In Sunil Todi and others v. State of Gujarat and others (2 supra), relied on by the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an existing debt or liability. The payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability. It is further held in paragraph No.20 of the aforesaid judgment as under: 20. A later judgment of a two judge Bench in Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited { (2016) 10 SCC 458}, considered the decision in Indus Airways (1 supra). In Sampelly, the appellant was the Director of a company which was engaged in power generation, while the respondent was a government enterprise engaged in renewable energy. The respondent agreed to advance a loan for setting up a power project and the agreement envisaged that post-dated cheques towards payment of installments of the loans would be given by way of security. The cheques having been dishonored, complaints were instituted under Section 138 which led to quashing pet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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