2023 (10) TMI 718 - HC - Indian Laws

Petition to quash summoning order under Section 138 NI Act dismissed; issues to be addressed at trial.

The HC dismissed the petition to quash the summoning order and complaints under Section 138 of the NI Act, concerning dishonoured cheques issued in ... Dishonour of Cheque - insufficiency of funds - legally enforceable debt or liability - discharge of partial liability - Section 138 of NI Act. HELD THAT:- 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 Section 482 of Cr.P.C. that there was no legally enforceable debt or liability, which is also a matter of trial. In the present case, the petitioners herein had entered into a loan agreement with the erstwhile Capital 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, without affording an opportunity to the complainant to present its case before the learned Trial Court - Petition disposed off. Issues Involved:1. Quashing of summoning order and complaints under Section 138 of the Negotiable Instruments Act, 1881.2. Allegation of misuse of security cheques.3. Legally enforceable debt or liability.4. Amalgamation and its impact on the maintainability of the complaint.Summary:Issue 1: Quashing of Summoning Order and Complaints under Section 138 of NI ActThe petitioners filed a petition under Section 482 of the Cr.P.C. seeking quashing of the summoning order dated 20.08.2019 and the related complaints filed under Section 138 of the NI Act. The complaints were based on the dishonour of two cheques issued by the petitioners in partial discharge of a loan liability. The court emphasized that the ingredients of Section 138 of the NI Act, as clarified by the Supreme Court in Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, were prima facie satisfied, including the issuance of cheques for a legally enforceable debt and their subsequent dishonour due to insufficient funds.Issue 2: Allegation of Misuse of Security ChequesThe petitioners contended that the cheques in question were issued as security cheques and were misused by the complainant. The court referred to the Supreme Court's decision in Sunil Todi v. State of Gujarat, stating that whether cheques were given as security or otherwise is a matter of defence to be adjudicated at the trial stage. The court cannot resolve such disputed questions of fact in a petition under Section 482 of Cr.P.C.Issue 3: Legally Enforceable Debt or LiabilityThe petitioners argued that there was no legally enforceable debt or liability at the time the cheques were drawn. The court noted that the complainant had averred that the cheques were issued in partial discharge of a loan liability, which was not disputed by the petitioners. The court emphasized that the existence of a legally enforceable debt or liability is a matter to be determined at trial, as per the Supreme Court's observations in Rathish Babu Unnikrishnan v. State (NCT of Delhi).Issue 4: Amalgamation and its Impact on the Maintainability of the ComplaintThe petitioners argued that the cheques were payable to Capital First Ltd. and not to the complainant, IDFC First Bank Ltd., and hence the complaint was not maintainable. The court referred to the Supreme Court's observations in Principal Commissioner of Income Tax (Central)-2 v. M/s Mahagun Realtors (P) Ltd., explaining that upon amalgamation, all properties, rights, liabilities, and duties of the amalgamating company vest in the transferee company. The complainant had shown that Capital First Ltd. had amalgamated into IDFC First Bank Ltd., transferring all liabilities, including the loan availed by the petitioners.Conclusion:The court found no ground to quash the summoning order dated 20.08.2019 and the related complaints. The petitioners were granted the liberty to raise all issues during the trial, which would be adjudicated based on the evidence presented. The petition was disposed of accordingly, and the judgment was ordered to be uploaded on the website forthwith.