TaxTMI 
TaxTMI 
2022 (2) TMI 54
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....Rs. 2,90,81,000/-, drawn on ICICI Bank, Shevapet Branch, Salem towards part payment of the said loan amount. When the above cheque was presented for encashment on 03.04.2013, the same was dishonoured for 'funds insufficient' on 04.04.2013. Thereafter, the complainant issued statutory notice, which was received by the accused 1 and 2 on 06.04.2013. But no reply was sent. Hence the complaint. The learned Judicial Magistrate took cognizance of the above complaint. The same is sought to be quashed by the petitioners mainly on the ground that at the time of availing financial assistance from the respondent by the petitioners, the second petitioner has handed over undated cheques while sanctioning and disbursing the loan as demanded by the bank. One such cheque was used for the purpose of loan processing charges and the remaining cheque was used to initiate the proceedings. It is also stated that in April 2013, the account of the firm became non performing asset which lead to issuance of notice under section 13 [2] of the SARFAESI. As a short circuiting procedure, without even intimating the firm or its partners, the respondent/ complainant filled up the cheque in question, which....
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....fficient security is already executed in favour of the bank by way of mortgages, the cheque issued for security cannot be enforced in the eye of law. It is his further contention that the circular issued by the Reserve Bank of India is with regard to interest application and the same indicate that when the account has been classified as NPA and the interest has not been received for 90 days or more, the bank need not debit interest in the said account for subsequent quarters. Therefore, it is his contention that the cheque in question cannot be enforced in the eye of law. In support of his submissions he placed reliance on the following judgments : Angu Parameswari Textiles [P] Ltd. and others Vs. Sri Rajam and Co. reported in 2001 SCC OnLine Mad 922 M/s.Pawan Enterprises Vs. Satish H.Verma reported in 2003 SCC OnLine Bom 1174 Alliance infrastructure Project Pvt. Ltd. and others Vs. Vinay Mittal reported in 2010 [115] DRJ 241 Indus Airways Private Limited and others Vs. Magnum Aviation Private Limited and another reported in [2014] 12 Supreme Court Cases 539 Sampelly Satyanarayana Rao Vs. Indian Renewable Energy development Agency Limited reported in [2016] 10 Supreme....
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....e filled at later date for Rs. 2,90,81,000/- is not maintainable. It is relevant to note that the prosecution is proceeded under the premise that the cheque was issued on 02.04.2013 for the said sum of Rs. 2,90,81,000/- and when the cheque was presented for encashment, the same got dishonoured and the complaint has been filed. The statutory notice issued in this regard dated 04.04.2013 indicate the nature of due payable. The same has not been disputed. As rightly pointed out by the learned Senior Counsel for the respondent, the petitioner addressed a letter dated 22.05.2013, wherein they have not disputed the amount payable and infact they have sought 30 days further time to settle all the dues with the bank. Further, possession notice has also been issued under the SARFAESI Act dated 25.06.2013 wherein also the amount is shown as Rs. 2,93,41,763.14 and the principal amount is shown as Rs. 2,27,03,851,27/-. This possession notice is subsequent to the statutory notice issued under the Negotiable Instruments Act. Though excessive amount is shown in the possession notice, it appears that subsequent interest has been calculated. 8. Much emphasis has been made for the interest calculat....
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....ession "amount of money' would mean the amount actually payable by the drawer of the cheque to the payee of the cheque when the cheque amount is exceeding the liability, the prosecution is not maintainable under section 138 of the Negotiable Instruments Act. When the cheque amount exceeds the liability, the cheque cannot be enforced. The only contention of the petitioner is that they are liable to pay only Rs. 21,31,490/-. Therefore, whether or not, the cheque has been presented for excess liability is a matter of evidence. This Court while exercising the power under section 482 Cr.P.C. cannot make a roving enquiry into the disputed facts. Therefore, the contention of the learned Counsel for the petitioner that the cheque in question was filled for excess amount other than the liability cannot be gone into at this stage and the same cannot be a ground to quash the proceedings. 10. With regard to the other aspects that the cheque issued as a security has been filled and presented for encashment and therefore, the same is not enforceable in the eye of law, it is relevant to note that in a judgment in M.M.T.C. Ltd. and another Vs. Medchl Chemicals and Pharma [P] Ltd. and another ....
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....held that once issuance of a cheque and signature thereon are admitted, presumption of a legally enforceable debt in favour of the holder of the cheque arises. It is for the accused to rebut the said presumption, though accused need not adduce his own evidence and can rely upon the material submitted by the complainant. However, mere statement of the accused may not be sufficient to rebut the said presumption. A post dated cheque is a well recognized mode of payment[10]. 18. Thus, the question has to be answered in favour of the respondent and against the appellant. Dishonour of cheque in the present case being for discharge of existing liability is covered by Section 138 of the Act, as rightly held by the High Court." Hence, the Apex Court considering various other judgments has held that the cheque issued as a security in a loan transaction can be enforced. Though it is stated that undated cheques were issued at the time of sanctioning the loan, it is to be noted that undated cheque will remain as a Bill of Exchange till it is filled. Therefore, when the loan amount or amount payable is due, such cheques are certainly enforceable in the eye of law. Therefore, considering the....