TMI Blog2022 (9) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... an be considered as the same was given for discharging the legally enforceable debt. In the case on hand, the question as to whether there was a dispute as contemplated in the compromise agreement, which obviated the obligation of the petitioner to honour the cheque which was issued in pursuance of the agreement cannot be gone into at this stage and that too in the proceedings under Section 482 Cr.P.C., and it is a matter for trial. Whether the cheque in dispute has been issued as a security? - HELD THAT:- In the case on hand, the petitioner himself has specifically stated in the quash petition that the cheque in dispute was given only as a security. If that be the case of the petitioner, then it cannot be stated that no offence is made out, since the cheque issued by him has been dishonoured. Even otherwise, the question whether the petitioner had issued the cheque in dispute as security, pursuant to the compromise agreement entered into between the parties and whether at the time when the cheque was presented, it was not for discharge of any debt or other liability cannot be gone into by this Court in these proceedings and the same can only be determined during the trial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the said agreement dated 26.02.2018, the accused has agreed to pay Rs.35,00,000/-, that the petitioner has paid Rs.10,00,000/- and agreed to pay the remaining amount of Rs.25,00,000/- on or before 23.03.2018, that the petitioner has issued a cheque bearing No.10125945, drawn on Federal Bank, Thoothukudi for Rs.25,00,000/- by dating the same as 23.03.2018, that on 21.03.2018, the accused have paid Rs.5,00,000/- towards part payment of the amount due by them and sought time till 02.04.2018, that since the accused has failed to pay the balance amount within the time agreed, the complainant has presented the cheque for collection on 13.06.2018 through his bank viz., Indian Overseas Bank, Thoothukudi Branch, that the cheque was returned as dishonoured for the reason that the payment was stopped, that the complainant has sent a legal notice dated 16.07.2018 to the accused demanding payment of the amount due, that the accused has sent a reply notice dated 28.07.2018 with false allegations and that since the accused have failed to pay the amount, the complainant was constrained to lodge the above complaint. 4. The case of the petitioner is that the averments in the complaint along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has specifically alleged that while he was attending some road work in Levanchipuram and Tuvipuram, the petitioner and his business partner Ganesha Kannan had interfered with his work and that since the accused have agreed to pay the amount for the work done by the respondent, the respondent got himself relieved from the work. When the demand of the complainant to pay Rs.68,70,000/- for the work done by him was not complied with, he preferred a complaint before the police officials and that thereafter the accused have entered into a compromise agreement with the complainant on 26.02.2018 whereunder the petitioner/accused has agreed to pay Rs.35,00,000/- and also paid Rs. 10,00,000/-, that the complainant who was in entire agreement with the terms arrived at between the parties, received Rs.10,00,000/-, and that the accused has then issued a cheque dated 23.03.2018 for Rs.25,00,000/- drawn on Federal Bank, Thoothukudi towards repayment of the balance amount. 9. As rightly contended by the learned Counsel for the respondent, the petitioner in the original petition has stated as if the respondent had taken contract of the particular work, which work had been partly done by one Gan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the petitioner has alleged that the agreement is void and that the consideration is illegal, immoral and against public policy, he has not elaborated anything further. Moreover, whether the cheque allegedly issued in pursuance of the compromise agreement can be considered as the same was given for discharging the legally enforceable debt. 13. The learned Counsel for the respondent has relied on a judgment of the Hon'ble Supreme Court in Ripudaman Singh Vs. Balkrishna reported in 2019(3) CTC 733, and the relevant passage is extracted hereunder: 15. The question as to whether there was a dispute as contemplated in clause 4 of the Agreement to Sell which obviated the obligation of the purchaser to honor the cheque which was furnished in pursuance of the agreement to sell to the vendor, cannot be the subject matter of a proceeding under Section 482 and is a matter to be determined on the basis of the evidence which may be adduced at the trial. 14. In the case on hand also, the question as to whether there was a dispute as contemplated in the compromise agreement, which obviated the obligation of the petitioner to honour the cheque which was issued in pursuance of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Act, observed as follows: 16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. Security in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified time frame and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences contemplated under Section 138 and the other provisions of N.I,. Act would flow. 17. When a cheque is issued and is treated as security towards repayment of an amount with a time period being stipulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined during the trial of the case. 19. At this juncture, it is necessary to quote the following passage of the judgment rendered by the Hon'ble Supreme Court in M/S Womb Laboratories Pvt Ltd vs Vijay Ahuja reported in 2019 SCC Online SC 2086, which is extracted as under: In our opinion, the High Court has muddled the entire issue. The averment in the complaint does indicate that the signed cheques were handed over by the accused to the complainant. The cheques were given by way of security, is a matter of defence. Further, it was not for the discharge of any debt or any liability is also a matter of defence. The relevant facts to countenance the defence will have to be proved - that such security could not be treated as debt or other liability of the accused. That would be a triable issue. We say so because, handing over of the cheques by way of security per se would not extricate the accused from the discharge of liability arising from such cheques. 20. Considering the above and on applying the legal position above referred, this Court has no hesitation to hold that the contention of the petitioner that the prosecution initiated by the respondent is not maintaina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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