AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 828
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.... 142 of the Negotiable Instruments Act (hereinafter called as "N.I. Act"). 2. The facts leading to the appeal are as follows: The complainant, Kanoria Industries Limited is a public limited company. It initiated action against the respondent/accused alleging that the respondent acknowledged the debt of one Satyappa Vantagodi of Jamkhandi in respect of the cement supplied by the complainant to him and in discharge of the said debt, issued a cheque bearing No.822232 dated 30.12.2004 for Rs. 1,36,234/-. The said cheque when presented for encashment came to be dishonoured for "funds insufficient". The complainant issued the statutory notice on 20.01.2005. The notice was served on the accused on 24.01.2005. The accused having failed to com....
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.... of N.I. Act and settled position of law. 6. I have heard the learned counsel for the appellant Sri. S.B.Hebballi and the learned counsel appearing for the respondent/accused Sri. M.C. Hukkeri. 7. Learned counsel for the respondent has placed reliance on the decision of this Court in the case of K.Narayana Nayak Vs. M.Shivarama Shetty reported in 2008 (3) KCCR 1569 , wherein it is held that the burden is cast on the complainant to prove that the cheque was issued towards the legally enforceable debt and not as a collateral security and if the complainant failed to prove the same, the accused is entitled for acquittal. 8. Learned counsel for the appellant has relied on the decision rendered by the Madras High Court in the case of P.....
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.... case, but the fact that the said document was produced by the complainant pursuant to the answers elicited during the cross-examination of PW.1 in my opinion the genuineness of the said letter cannot be doubted. The said letter reads as follows: "Sub: Issue of Cheque No.822232 dated 30/12/04 for Rs. 1.36.234 against outstanding of M/s Satyappa Vantagodi, Jamkhandi. I/We hereby enclose Cheque No.822232 dated 30/12/04 for Rs. 1.36.234/- duly drawn on Kanorla Industries Limited, against the amount due by M/s. Satyappa Vantagodi, Jamkhandi to your company towards supply of cement. I further confirm that this amount is being paid against the outstanding amount due to your company by M/s. Satyappa Vantagodi, Jamkhandi and I/We further forg....
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.... by a third party?" 12. Learned counsel for the accused/respondent has emphatically submitted that in order to render the accused liable for conviction under the provisions of Section 138 of N.I. Act, the dishonored cheque should have been issued by the accused in discharge of the legally enforceable debt or liability due and payable by him and not the debt or liability contracted by any third party. In other words, it is the submission of the learned counsel that in the instant case the complainant himself having come forward with the plea that the cheque in question was issued in respect of the debt or liability due by the aforesaid Satyappa Vantigodi, with whom the accused has no relationship whatsoever, the accused cannot be made lia....
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....nto a hire-purchase agreement with the appellant company (ICDS Limited) for the purpose of purchase of Maruti Car on hire-purchase basis. Respondent No.1, his wife stood as guarantor in respect of the hire-purchase facilities being made available to her husband. In respect of the aforesaid transaction respondent No.1 issued a cheque. The said cheque was dishonored. The appellant issued a statutory notice calling upon the respondent No.1 to pay the amount. Respondent No.1 failed to comply with the demand, hence, action was initiated under Section 138 of N.I. Act. The respondent moved a petition under Section 482 of Cr.P.C. for quashing the complaint on the ground that there was no subsisting debt in respect of which the respondent No.1 was l....
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.... ......The language of the Statue depicts the intent of the law-makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embagor in the matter of application of the provisions of Section 138 of the Act: 'Any cheque' and 'other liability' are the two key expressions which stands as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the Statute. Any contra interpretation would defeat the intent of the legislature......" 14. In view of the above principles, the reasoning assigned by the trial Court that there was no subsisting debt in r....