TMI Blog2023 (10) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... some legally enforceable debt. However, it is also well-settled through precedents of Hon ble Apex Court that the issue as to whether or not a cheque was issued in discharge of legally recoverable debt is to decided during the course of trial and the proceedings under Section 138 of NI Act ought not to be quashed on such grounds at pre-trial stage. In this regard, this Court deems it appropriate to refer to the decision of Hon ble Apex Court in case of Rathish Babu Unnikrishnan v. State (NCT of Delhi) [ 2022 (4) TMI 1434 - SUPREME COURT] wherein it was observed 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. This Court notes that in the present case, the petitioners herein have not disputed the issuance of cheques in question including the signatures on the cheque, date on the cheque as well as the amount mentioned in the cheques, though they have disputed the purpose or reason behind issuance of cheques, which as per the petitioners, was not to discharge any liability or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is respondent no. 1 in Crl. M.C. 5316/2023. 3. Brief facts of the case, as per the complaints filed under Section 138/141/142/143A of the Negotiable Instruments Act, 1881 ( NI Act ) are that petitioners alongwith Smt. Saroj Mittal, Smt. Akanksha Mittal and R.P. Mittal HUF, who were the owners of units nos. 301-305, Krishna Apra Business Square, Plot No. 4, 5 6, Wazirpur District Centre, Netaji Subhash Place, Pitampura, Delhi, had come in contact with the complainant Manish Garg and had communicated their desire to sell the said property as they were in dire need of money. The petitioners had represented that the said units were free from all encumbrances, legal defects, etc. except a pending loan of Rs. 4,10,11,438/- with M/s. Dewan Housing Finance Ltd. ( DHFL ). On these representations, the complainant Manish Garg had become interested in buying the said property and accordingly, an agreement to sell dated 06.04.2018 had been executed between the parties for a consideration of Rs. 4,50,00,000/-. As per the terms of agreement, the complainant Manish Garg had paid an earnest amount of Rs. 40,00,000/- to the petitioners and other aforesaid owners of the property, and had agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Infrastructure Pvt. Ltd. calling upon them to make payment of the aforesaid amounts. Upon failure on part of accused persons to make payment, the Complaint Case No. 5892/2020 was filed by the complainant Manish Garg for dishonor of cheque of Rs. 40,00,000/-, and the Complaint Case No. 5888/2020 was filed by the complainant company Parker Builders Pvt. Ltd. for dishonor of cheque of Rs. 58,50,000/-. Thereafter, the learned Trial Court had issued summons against the accused, and notice under Section 251 of Cr.P.C. was framed against the petitioners vide orders dated 25.08.2022 in both the cases. Aggrieved by the same, the present petitions have been filed before this Court. 4. The case set out by the petitioners, contrary to the claims of complainants, is that the complainant Manish Garg had approached the petitioners and other owners of the aforesaid property and had shown his interest in buying the same, and accordingly, the agreement to sell dated 06.04.2018 had been entered into. It is stated that in July, 2018, the complainant Manish Garg had communicated to the petitioners that he wished to sell the property to a third party so as to accrue and realize some substantial mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any amount by the accused company from the complainant company. It is further submitted that the cheque issued by the accused company in favour of the complainants were without any consideration as the accused company and the petitioners as directors of the accused company were not party to the Agreement to Sell, from which the instant dispute arises. It is submitted that the cheque was issued on the bald assurance of complainant Manish Garg whereby it was assured to the petitioners that third party shall reimburse some amount to the Petitioners, which is to be transferred to Manish Garg. It is also argued that even as per the balance sheet of complainant Parker Builders Pvt. Ltd., the amount due from accused company was Rs. 42,09,043/-, which is less than the amount of cheque of Rs. 58,50,000/-. It is also submitted that though the complaint mentions about some interest to be paid by the accused persons, the agreement to sell does not mention any such clause regarding payment of interest. Therefore, it is stated that the cheques in question did not represent any outstanding liability and the dishonour would not fall within the purview of Section 138 of NI Act, and therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk within six months from the date on which it was drawn or within the period of its validity; (ii) The holder of the cheque must make 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 from the receipt of the notice from the bank that the cheque was returned dishonoured; and (iii) The holder of the cheque fails to make the payment of the said amount of money within fifteen days from the receipt of the notice... (emphasis supplied) 10. Thus, there is no dispute regarding the arguments raised by learned counsel for respondent that to constitute an offence under Section 138 of NI Act, the cheque in question should have been issued in discharge of some legally enforceable debt. 11. However, it is also well-settled through precedents of Hon ble Apex Court that the issue as to whether or not a cheque was issued in discharge of legally recoverable debt is to decided during the course of trial and the proceedings under Section 138 of NI Act ought not to be quashed on such grounds at pre-trial stage. In this regard, this Court deems it appropriate to refer to the decision of Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) 12. In light of the aforesaid observations of the Hon ble Apex Court, this Court notes that in the present case, the petitioners herein have not disputed the issuance of cheques in question including the signatures on the cheque, date on the cheque as well as the amount mentioned in the cheques, though they have disputed the purpose or reason behind issuance of cheques, which as per the petitioners, was not to discharge any liability or pay any legally enforceable debt. In these circumstances, there is merit in the argument of learned counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank account of their company (accused company) on the pretext that the same was a family owned company and they had transferred all their funds into the bank account of company. It is also not the case of petitioners that they were not incharge of not responsible for the day-to-day affairs of the accused company. 14. As regards the amount of debt/liability, the complainants have averred in their complaints that the petitioners had assured that they would return the aforesaid amount alongwith interest, and as per complainant, the cheque amount includes the amount of interest alongwith principal amount. The case of petitioners is contrary to the same and as per them, the cheques had not been issued towards discharge of any legally enforceable debt. However, when there are clear and specific averments in the complaint in relation to commission of offence under Sections 138/141 of NI Act, this Court is of the considered opinion, being guided by the principles of Hon ble Apex Court, that such factual issues and the probable defence of the accused persons cannot be appreciated and adjudicated upon by this Court in a petition under Section 482 of Cr.P.C. since these issues are triabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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