TaxTMI 
TaxTMI 
2021 (11) TMI 989
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....hat the complaint has been filed just to wreck vengeance and cause harassment to the petitioner and his family members. It is averred that the dispute between the petitioner and the respondent, if any, is purely a dispute of civil nature and, therefore, the respondent can not be permitted to set the criminal law in motion to settle the civil dispute by creating fear of prosecution. Reference is also made to a civil suit for permanent prohibitory injunction filed by the petitioner against the respondent which is subjudice in the Court of Sub-Judge, Kargil, Ladakh. It is lastly contended that the complaint filed by the respondent purportedly under Section 138 read with 142 of N.I. Act is only a tool of harassment and, therefore, allowing such complaint to proceed would be gross abuse of process of law. 3 The petition is resisted by the respondent who has entered appearance and contested the petition through his counsel Mr. M.A.Qayoom, Advocate. The star point raised by Mr. Qayoom to resist this petition is that when the cheque issued by the petitioner to the respondent is not denied, there is presumption under Section 139 of N.I. Act that the same has been issued for discharging l....
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....ted 05.02.2019 to the petitioner calling upon him to pay the aforesaid amount. The petitioner received the notice and sent his reply through his counsel on 19.02.2019, but did not make the payment, though he admitted the issuance of post dated cheque in question. 5 In the aforesaid backdrop, the respondent filed a complaint before the trial Court. The trial Court took cognizance of the complaint, put the petitioner on notice and on his appearance, recorded his statement on 23.08.2021 in which the petitioner denied all the allegations and claimed to be tried. 6. When the rival contentions of learned counsel appearing for the parties are analyzed in the context of above factual matrix, following questions crop up for determination in this case: (i) Whether the dispute between the parties with regard to payment of bounced cheque is a pure and simple civil dispute and, therefore, the proceedings under Section 138 of N.I. Act are not maintainable ? ; (ii) Whether the plea of the accused in the complaint under Section 138 N.I. Act that he made the cheque in favour of the complainant without there being any legally enforceable debt or other liability, could be exam....
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.... passable from one person to another. Section 138 creates a statutory offence in the matter of dishonour of cheques on the grounds of insufficiency of funds in the account maintained by a person with the banker and that it exceeds the amount arranged to be paid. Generally, in the criminal law, mens rea is an essential component of crime but dishonour of cheque is a criminal offence where there is no need to prove a mens rea. The offence under Section 138 would be made out only if the dishonored cheque is drawn by the drawer in favour of the drawee for discharge of legally enforceable debt or liability. Essentially, there is element of civil liability between the drawer and drawee of the cheque but if the ingredients of Section 138 are made out, it is a criminal offence to be tried in the manner provided under Section 142 of the NI Act". 9 In the recent judgment, the Hon'ble Supreme Court in the case of Ripudaman Singh vs Balkrishna, (2019) 4 SCC 767 in paragraph (9) which is relevant in the context of controversy raised in this petition, held thus: "We find ourselves unable to accept the finding of the learned Single Judge of the High Court that the cheques were not iss....
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....on 138 of N.I. Act is aimed at penalizing the dishonor of cheque along with making adequate compensation to the aggrieved person, yet, mere dishonor of cheque by itself is not an offence under the said Section and to become an offence, following ingredients are required to be fulfilled: (i) A person must have drawn a cheque for payment of money to a person for any legally enforceable debt or other liability; (ii) The cheque has been presented to the Bank within a period of six months or within period of its validity, whichever is earlier; (iii) The cheque is returned by the Bank unpaid either because of insufficient funds or that it exceeds the amount arranged to be paid from that account by an agreement made with the Bank; (iv) The payee makes a demand for the payment of money by giving a notice in writing to the drawer within thirty days of the receipt of information from the Bank regarding return of the cheque as unpaid; and, (v) The drawer fails to make payment to the payee within fifteen days of the receipt of the notice. 12 As noted above, the complaint of the respondent, if read in its entirety, does not leave any manner of dou....
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....r a legally enforceable debt or liability. The findings in those cases have been returned after the trial and in the context of proved facts. I do not, therefore, think it necessary to burden this judgment with all such citations. 15 In the matter of Laxmi Dyechem vs State of Gujarat and ors, (2012) 13 SCC 375, a Division Bench of Hon'ble Supreme Court consisting of Justice T.S.Thakur and Justice Gyan Sudha Misra, the then Judges of the Hon'ble Supreme Court, while dealing a case under Section 138 of N.I. Act, also touched upon question No.(ii) that is raised in this petition. In the lead judgment written by Justice Thakur, there is no specific reference to this issue, but in the supplementary judgment written by Justice Gyan Sudha Misra, in paragraphs (22) & (25), Her Lordship has made very interesting and thought provoking observations. I reproduce paragraphs (22) & (25) hereunder: "22. We have to bear in mind that the Legislature while incorporating the provisions of Chapter XVII, Sections 138 to 142 inserted in the NI Act (Amendment Act 1988) intends to punish only those who know fully well that they have no amount in the bank and yet issue a cheque in discharge of ....
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....ed by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If however, the accused/drawer of a cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under Section 139 of the NI Act regarding commission of the offence comes into play if the same is not rebutted with regard to the materials submitted by the complainant". However, in the later part of the said judgment i.e paragraph (29), the learned Judge made the following observations: "29. Thus, although a petition under Section 482 of the Cr.P.C. may not be entertained by the High Court for quashing such proceedings, yet the judicious use of discretion by the trial judge whether to proceed in the matter or not would be enormous in view of Section 139 of the NI Act and if the drawer of the cheque discharges the burden even at the stage of enquiry that he had bona fide reasons to stop the payment and not make the said payment even within the statutory time of 15 days provided under the NI Act, the trial court might ....
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.... rebuttal can only be done after adducing evidence. This, by itself clearly reflects that the rebuttal presumption cannot be looked into at the stage of the Court taking cognizance of the offence and registering the case all that Court would have to see is whether there is a prima facie case made out meeting the conditions precedent as envisaged under Section 138 of NI Act, which in the instant case, in the opinion of this Court, the Respondent has in fact been able to establish and fulfil all such ingredients. 32. As has been stated in the preceding paragraphs since there is a presumption to be drawn of there being a debt or liability in part or in whole of the drawer to the holder of the instrument, the Court below cannot be said to have faulted upon in taking cognizance and in registering the offence. Since it is a rebuttal presumption and all the contentions and averments made by the counsel for the Petitioner being his defence, it would be open for him to raise all these grounds at the stage of leading evidence including the defence of existence of legally enforceable debt or liability. However, there can be no doubt that at the time of filing of complaint there was a....