TMI Blog2023 (10) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... First Ltd. in March, 2017. However, in 2018, Capital First Ltd. had amalgamated with IDFC Bank Limited by virtue of amalgamation order dated 12.12.2018 passed by Hon ble NCLT, Chennai Bench. After the amalgamation, all the loans availed by various borrowers including the loan availed by the petitioners herein was also transferred to IDFC Bank Limited, and further that all the properties, rights, liabilities and duties of Capital First Ltd. were vested in IDFC Bank Limited including all contractual liabilities owed by the present petitioners to Capital First Ltd. - the contentions regarding complaint in question being not maintainable since it was filed by IDFC First Bank Ltd. and not Capital First Ltd. in whose name the cheques had been issued, cannot be appreciated at this stage when the complainant has prima facie shown that the erstwhile Capital First Ltd. had amalgamated into the present complainant company alongwith all properties, rights, asset, liabilities including contractual liabilities such as the present loan facility. This Court finds no ground to quash summoning order dated 20.08.2019 passed by learned Trial Court against petitioners in both the Complaint Cases, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, the complainant/respondent had filed the impugned complaints i.e. complaint cases bearing nos. 30937/2019 and 30938/2019 for dishonour of cheque bearing no. 1122 and 350 respectively. The learned Trial Court had issued summons against petitioners vide order dated 20.08.2019. 3. Learned counsel for the petitioners argues that the petitioner had earlier entered into an agreement for trade advance facility with the Capital First Ltd. in the year 2013 for an amount of Rs. 30,00,000/- wherein a security cheque bearing no. 1122 had also been handed over by the petitioner, and this loan had been repaid and settled, but the said cheque had remained with the bank. It is stated that thereafter in the year 2017, the petitioner and Capital First Ltd. had entered into a fresh loan agreement wherein other security cheque bearing no. 350 had been handed over to the complainant. It is stated that these undated security cheques had been misused by the complainant at a later stage when there was no existing legally enforceable debt or liability, at the time when cheques in question were drawn or dishonoured. It is also stated that the cheques were payable to Capital First Ltd. and not to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall apply unless (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation .--For the purposes of this section, debt of other liability means a legally enforceable debt or other liability. 7. The Hon'ble Apex Court in Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel(2023) 1 SCC 578 , has held that to constitute an offence under Section 138 of NI Act, following ingredients are to be fulfilled: 11. Section 138 of the Act provides that a drawer of a cheque is deemed to have commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olds that the issue as to whether the cheques were given by way of security is a matter of defence. This line of reasoning in Womb Laboratories is on the same plane as the observations in HMT Watches, where it was held that whether a set of cheques has been given towards security or otherwise or whether there was an outstanding liability is a question of fact which has to be determined at the trial on the basis of evidence. The rationale for this is that a disputed question of this nature cannot be resolved in proceedings under Section 482 CrPC, absent evidence to be recorded at the trial. (emphasis supplied) 10. Similarly, the issue of existence of legally enforceable debt or liability is also a disputed question of fact and when the complainant has averred in the impugned complaint that the petitioners herein had obtained a loan facility to the tune of Rs. 1.5 crores, which is also not disputed by the petitioner, and that petitioners had issued the cheques in question in partial discharge of the said liability, and further when the signatures on the cheque have not been disputed, this Court is of the opinion that it cannot come at any conclusion in a petition under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervation on this aspect: 17. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a 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. 11. The legal presumption of the cheque having been issued in the discharge of liability must also receive due weightage. In a situation where the accused moves Court for quashing even before trial has commenced, the Court's approach should be careful enough to not to prematurely extinguish the case by disregarding the legal presumption which supports the complaint. The opinion of Justice K.G. Balakrishnan for a three judges Bench in Rangappa v. Sri Mohan would at this stage, deserve our attention: 26. we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. As noted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he criminal process. Also because of the legal presumption, when the cheque and the signature are not disputed by the appellant, the balance of convenience at this stage is in favour of the complainant/prosecution, as the accused will have due opportunity to adduce defence evidence during the trial, to rebut the presumption. 18. Situated thus, to non-suit the complainant, at the stage of the summoning order, when the factual controversy is yet to be canvassed and considered by the trial court will not in our opinion be judicious. Based upon a prima facie impression, an element of criminality cannot entirely be ruled out here subject to the determination by the trial Court. Therefore, when the proceedings are at a nascent stage, scuttling of the criminal process is not merited... (Emphasis supplied) 11. Moving further, on the issue of amalgamation , some observations of the Hon ble Apex Court in Principal Commissioner of Income Tax (Central)-2 v. M/s Mahagun Realtors (P) Ltd. 2022 SCC OnLine SC 407 will be relevant to be taken note of, which are extracted hereunder: 17. The amalgamation of two or more entities with an existing company or with a company cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d amalgamation, the actionable claim including any claims with respect to loan availed by the petitioners is that of IDFC Bank Ltd., which had later changed its name to IDFC First Bank Ltd. and a fresh certificate of incorporation had also been issued. Thus, the contentions regarding complaint in question being not maintainable since it was filed by IDFC First Bank Ltd. and not Capital First Ltd. in whose name the cheques had been issued, cannot be appreciated at this stage when the complainant has prima facie shown that the erstwhile Capital First Ltd. had amalgamated into the present complainant company alongwith all properties, rights, asset, liabilities including contractual liabilities such as the present loan facility. 13. Thus, in view of the foregoing discussion, this Court finds no ground to quash summoning order dated 20.08.2019 passed by learned Trial Court against petitioners in both the Complaint Cases, without affording an opportunity to the complainant to present its case before the learned Trial Court. 14. However, the petitioners shall be at liberty to raise all such issues during the course of trial and the learned Trial Court shall consider and adjudicate u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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