TaxTMI 
TaxTMI 
2021 (11) TMI 449
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....on file in C.C. No. 3023 of 2020. 4. After the trial, in view of Ex. P2/memorandum of understanding between the complainant's company and the accused, the learned Magistrate has held that as agreed upon by the parties under Ex. P2/memorandum of understanding, a sum of Rs. 46 lakhs was given by the complainant to the accused and as per the terms, including annualized interest for the period of 90 days, the due payable by the accused is Rs. 48,87,300/- and accordingly, the accused had issued a cheque, dated 22.10.2009, bearing No. 103562, for the said amount to the complainant. Though, the cheque was dated 22.10.2009, it was presented to the bank on 20.02.2010 as could be seen from Ex. P4/Return Memo. Accordingly, the learned Magistrate has held that in view of the authorization given by the Company to PW1/complainant, the complaint is maintainable and Ex. P3/cheque bearing No. 103562 for a sum of Rs. 48,87,000/-, was issued for pre-existing legal liability and accordingly held that the accused had committed offence under Section 138 of the Negotiable Instruments Act and sentenced them as (i) The second accused is sentenced to undergo one year simple imprisonment and ....
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....said amount of investment was carry 90 days interest and interest calculated for 90 days viz., Rs. 2,87,000/- will be given and as a security, this Ex. P3/cheque was issued and therefore, since it is only an investment, there is no pre-existing legally enforceable debt so as to raise presumption under Section 138 of the Negotiable Instruments Act. 10(a). After hearing rival submissions, perusing records and documents filed before the Trial Court, it is seen that the complainant company is a knowledge service provider in the area of business and market research for Pharmaceutical and Bio-technology Medicine. The first accused company namely M/s. ABL Biotechnologies Ltd., is a company incorporated in Indian and having their registered office at Thiruvanmiyur, Chennai-41, was in the business of manufacturing soft gel capsules and other bio-technology pharmaceutical medicines. The first accused is being represented by the second accused viz., K.O. Isaac, who has signed the cheque in question in the capacity of Managing Director of M/s. ABL Bio-Technologies Limited. The dishonoured cheque is dated 22.10.2009 and is for a sum of Rs. 48,87,000/- in favour of the appellant. 10(b). Fu....
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....lant had sent a rejoinder dated 27.04.2010. 11. The complainant's company had paid a sum of Rs. 46,00,000/- to the accused company to execute their sales order and in order to return the same along with the interest of Rs. 2,87,000/- for a period of 90 days, the accused company M/s. ABL Bio-Technology Ltd., represented by its Managing Director, the second accused issued a cheque for a sum of Rs. 48,87,000/-. 12. According to the private complainant the cheque was issued from A1's account signed by A2 in the capacity of Managing Director. The cheque amount is Rs. 48,87,000/-, dated 22.10.2009. As per the terms the accused has forwarded the loan of Rs. 46,00,000/- along with interest for 90 days viz., Rs. 2,87,000/-, which is equal to the cheque amount Rs. 48,87,000/-. The complainant has paid amount to the accused through bank transactions dated 30.07.2009 and 20.08.2009. The cheque was dated October and as per the version of PW1, Ex. P3/cheque has to be classified as "post dated cheque". The post dated cheque is encashable only on the date found in the cheque and hence become enforceable. 13. On presentation the same was return for "insufficient funds" and hence, t....
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.... 11. The party of the second part shall provide demand promissory note for Rs. 48,87,000/- and issue post dated cheques for Rs. 48,87,000/- to the party of the first part in order to secure the interest of the party of the first part." And thus, I find that as per clause (11) of Ex. P2/Memorandum of Understanding, the accused in order to pay the said amount has issued post dated cheque for a sum of Rs. 48,87,000/-. In other words, the word mentioned in the clause (11) of Ex. P2/Memorandum of understanding viz., "in order to secure interest of the party of the first part" in Ex. P9/legal notice issued by the complainant to the accused dated 05.04.2010 also speaks as follows: "Our clients state that your client and out client entered into a Memorandum of Understanding on 22.07.2009 under which your client agreed to invest a sum of Rs. 26,00,000/- towards the cost of executing the sales orders. Our clients' further state that it was agreed under the said Memorandum of Understanding that the cycle time for production of soft gel capsules would be 90 days for processing/manufacturing/billing/collection period. Our clients state that it was further agreed by your ....
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....t clearly stated that nothing was due to complainant - And cheque was issued by way of security - Said defence accepted as probable - Hence, cheque cannot be held to have been misused in discharge of debt - If cheque issued for security or for any other purpose - it would not come within purview of Sec. 138 - Impugned judgment unsustainable - And set aside." 22. Thus, this Court finds that on a reading of clause (11) of Ex. P2/Memorandum of Understanding, since the cheque was issued before 90 days on due payment, it can be considered only as a security not for the encashment. 23. It is elicited during the cross examination of DW1 that for a sum of Rs. 46,00,000/- along with interest for a period of 90 days viz., Rs. 2,87, 000/-, a cheque for a sum of Rs. 48,87,200/- was issued and thus, this Court finds that the accused has issued the cheque only as a security not for encashment since 90 days period as agreed between the parties under Ex. P2/MOU has not been completed, besides the agreed amount of Rs. 46,00,000/- was not transfer to the escrow account also assumes significance. 24. No doubt it is true that Ex. P3/cheque in dispute was not drawn from escrow account but was ....