9911796707
TMI Blog2022 (5) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... Negotiable Instruments Act, 1881 (for short, 'the Act, 1881'). The allegations, in brief, of the complaint may be stated as follows: Complainant devasthanam issued a paper Notification dated 18.05.2016 proposing to conduct public auction and inviting applications 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. Public auction was conducted on 26.05.2016 and the petitioner/accused was declared as the highest bidder for an amount of Rs.36,06,000/- per year for license rights for spot photos at Up Hills of Indrakeeladri for first year from 01.06.2016 to 31.05.2017 and on enhancement of 10% on the said annual am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vasthanam. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held thus: (paragraph No.19). "The above reasoning of the Delhi High Court is clearly flawed inasmuch as it failed to keep in mind the fine distinction between civil liability and criminal liability under Section 138 of the NI Act. If at the time of entering into a contract, it is one of the conditions of the contract that the purchaser has to pay the amount in advance and there is breach of such condition then purchaser may have to make good the loss that might have occasioned to the seller but that does not create a criminal liability under Section 138. For a criminal liability to be made out under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. We are unable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been urged on behalf of the appellants is that a complaint under Section 138 of the NI Act would not be maintainable since the cheque of Rs. 2.67 crores was issued by way of a security and, is thus not against a legally enforceable debt or liability. The appellant has placed reliance on the judgment of a two judge Bench of this Court in Indus Airways Private Limited v. Magnum Aviation Private Limited. The issue in that case was whether the post-dated cheques which were issued by the appellants who were purchasers, as an advance payment in respect of purchase orders, could be considered to be in discharge of a legally enforceable debt or other liability and whether the dishonor of the cheques amounted to an offence under Section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued 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, 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 Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing enforceable debt or liability or whether it was towards an advance payment without there being a subsisting debt or liability." 8. A perusal of Section 138 of the Act, 1881 goes to show that the expression 'debt or liability' means a legally enforceable debt or other liability. If the cheque has been issued in discharge of any debt or liability, presumption under Section 139 of the Act, 1881 would come into operation. In other words, when once a cheque has been issued, the presumption has to be drawn to the effect that the cheque has been issued to discharge a legally enforceable debt or other liability. 9. It is evident from the record that there is a contract between 2nd respondent/complainant and the petitioner/ accused. In terms o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
