TaxTMI 
TaxTMI 
2017 (7) TMI 577
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....gotiable Instruments Act, 1881 filed against the applicant and dismissed the revision application filed by the applicant. 4. The facts of the case are that the applicant-Sarad Gupta was the manager of the respondent M/s Madhu Brothers till 23.12.2004 at the Showroom No.2, GTB Complex, New Market, T.T. Nagar, Bhopal. The business of the non-applicant firm at this showroom was conducted by the applicant in the capacity of the manager of the firm. After 23.12.2004 the applicant was no longer the manager or employee of the firm. On 23.12.2004, the proprietor of the non-applicant firm, Mr. Madhukar Gupta decided to wind up and close the business at Bhopal, so the complete stock of the showroom was also shifted by the non-applicant to some other place. 5. According to applicant, on 23.12.2004, a mutual agreement was executed between the non-applicant Madhukar Gupta and the applicant Sharad Gupta, that settlement of accounts and liabilities between both the parties would be done and then a Memorandum of Understanding (MOU) specifying the same would be executed within four days of the mutual agreement i.e. 23.12.2004. Therefore, it was decided in the agreement dated 23.12.2004 that it wa....
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....he application vide order dated 10.3.2014. The said order has been upheld by the learned Revisional Court vide order dated 11.8.2015. 11. Learned Counsel for the applicant has submitted that after 23.12.2004 a Civil Suit for declaration was filed by the applicant that complainant-Madhukar Gupta proprietor of M/s. Madhu Brothers was not entitled to encash those 5 cheques without settling the accounts of execution of MOU within four days from the date of agreement. The said Civil Suit was finally decided vide judgment and decree dated 23.12.2011. The learned Civil Court while deciding the civil suit in favour of the applicant-Sharad Gupta passed the decree that: (i) The non-applicant-Madhukar Gupta will not illegally interfere nor get interfered by anyone else, in the possession of the applicant-Sharad Gupta of the showroom No.2, GTB complex, New Market, T.T. Nagar, Bhopal, which belongs to the applicant. (ii) The non-applicant-Madhukar Gupta will execute within 1 month of the judgment, the MOU in accordance with the mutual agreement dated 23.12.2004, and the applicant will support the nonapplicant in the execution of MOU. (iii) Until the execution of MOU, the non-applicant does ....
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.... 6.9.2005 i.e. after dishonored of cheques dated 22.2.2005. 15. To appreciate the submissions of the learned Counsel, it is necessary to consider the nature of agreement (Annexure P/1) entered into between the parties:- 16. It is well settled in law that if cheques were issued for security, then offence under Section 138 of N.I. Act is not made out. 17. It is also well settled in law that an accused can rebut the presumption of Section 139 of the Act simply by a preponderance of probability and it is not necessary for him to rebut the said presumption beyond reasonable doubt. He can rebut the presumption by referring the evidence the evidence coming out in the evidence adduced by the complainant and it is not necessary for him to adduce independent evidence with regard the stand taken by him visa- vis to the issuance of the cheque. 18. The Apex Court in the case of Syed Askari Hadi Ali Augustine Imam and another vs. State (Delhi Administration) and another reported in (2009) 5 SCC 528 has held the following in para 25 which reads as under:- "25. It is, however, significant to notice that the decision of this Court in M/s Karam Chand Ganga Prasad & anr. etc. V/s. Union of India....
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....l Islam who simply sought one month's time to pay up the amount. The cheques were post dated, only to give to the drawer the specified one month's time to pay the amount. There is thus a direct relationship between the liability and the cheques issued in connection therewith. Thus far there is no difficulty. The difficulty arises only because the promissory note uses the words "security" qua the cheques. This would ordinarily and in the context in which the cheques were given imply that once the amount of rupees ten lakhs was paid, the cheques shall have to be returned. There would be no reason for their retention by the complainant or for their presentation. In case, however, the amount was not paid within the period stipulated, the cheques were liable to be presented for otherwise there was no logic or reason for their having been issued and handed over in the first instance. If non-payment of the agreed debt/liability within the time specified also did not entitle the holder to present the cheques for payment, the issue and delivery of any such cheques would be meaningless and futile if not absurd. It is important to note that it was not a case where no debt or liability was det....
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....forceable debt in favour of holder. Accused needs to rebut such presumption. Apex Court held:- "13. Act Crucial question to determine applicability of Section 138 of the is whether the cheque represents discharge of existing enforceable debt or liability or whether it represents advance payment without there being subsisting debt or liability. While approving the views of different High Courts noted earlier, this is the underlying Page 7principle as can be discerned from discussion of the said cases in the judgment of this Court. 14. In Balaji Seafoods (supra), the High Court noted that the cheque was not handed over with the intention of discharging the subsisting liability or debt. There is, thus, no similarity in the facts of that case simply because in that case also loan was advanced. It was noticed specifically therein - as was the admitted case of the parties - that the cheque was issued as "security" for the advance and was not intended to be in discharge of the liability, as in the present case. 15. In HMT Watches Ltd. versus M.A. Abida 8 , relied upon on behalf of the respondent, this Court dealt with the contention that the proceedings under Section 138 were liable ....
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....chable character should not be taken into consideration at any cost for the purpose of finding out as to whether continuance of the criminal proceedings would amount to an abuse of process of court or that the complaint petition is filed for causing mere harassment to the accused. While we are not oblivious of the fact that although a large number of disputes should ordinarily be determined only by the civil courts, but criminal cases are filed only for achieving the ultimate goal, namely, to force the accused to pay the amount due to the complainant immediately. The courts on the one hand should not encourage such a practice; but, on the other, cannot also travel beyond its jurisdiction to interfere with the proceeding which is otherwise genuine. The courts cannot also lose sight of the fact that in certain matters, both civil proceedings and criminal proceedings would be maintainable." 12. In Rallis India Ltd. v. Poduru Vidya Bhushan [(2011) 13 SCC 88], this Court expressed its views on this point as under: (SCC p. 93, para 12) "12. At the threshold, the High Court should not have interfered with the cognizance of the complaints having been taken by the trial court. The High ....