TaxTMI 
TaxTMI 
2022 (9) TMI 613
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....ter referred to as "the respondent no 2") has filed a complaint under section 138 of the Negotiable Instruments Act, 1881 titled as Atamjit Singh V Amrit Sandhu Coster & another bearing CC No.6437 of 2017 on allegations that the petitioner (arrayed as the accused no 1 in complaint) and her sister namely Jasween Sandhu (arrayed as the accused no 2 in complaint and is petitioner in Crl.M.C. bearing no 437/2019) issued a cheque bearing no. 329623 dated 06.03.2017 amounting to Rs 20,00,000.00 (Rupees Twenty Lacs Only) drawn on Syndicate Bank, Branch West Punjabi Bagh, Central Market, New Delhi-110026 (hereinafter referred to as "the cheque in question") towards discharge the their liability as detailed in complaint. The respondent no 2 presented said cheque for encashment on 06.04.2017 at HDFC Bank, Branch G.K.-l but was dishonored due to "Payment Stopped by Drawer" as intimated vide return memo dated 11.04.2017. The petitioner and Jasween Sandhu did not pay cheque amount despite notice dated 10.05.2017. The respondent being aggrieved filed the present complaint. 3. The trial court vide impugned order summoned the petitioner and Jasween Sandhu. The impugned order is reproduced as un....
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....to pay till December, 2011. 4.2 The petitioner went back to USA and remained there from 13th December, 2011 to 12th January, 2012 and found that food court was being operated by someone else. It was revealed to the petitioner that the food court which was stated to be developed for the petitioner was in fact being developed for another person by the respondent no 2. The respondent no 2 expressed his inability to hand over the food court to the petitioner and also to return the money advanced by the petitioner and to give assured return as agreed. However, the respondent no 2 started to pay Rs. 60,000/- pm with effect from 01.01.2012 to the petitioner. The respondent no 2 at the insistence of the petitioner acknowledged Rs. 40 Lacs paid by her and entered in two Assured Return Agreements. The respondent no 2 was found to be missing and as such the petitioner filed a police complaint dated 08.12.2014 at P S Hauz Khas and another complaint on 05.01.2015 to Deputy Commissioner of police. Thereafter the petitioner filed a complaint under section 200 of the Code along with an application under section 156 (3) of the Code wherein vide order dated 06.07.2015, the court directed for regi....
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....r. The trial court has failed to appreciate that the present complaint is having full of inconsistencies. The period of limitation for enforcing/recovering any debt expired in the year 2014 and any cheque issued after the expiry of the period of limitation cannot be said to have been issued towards any debt or other liability. The trial court has failed to appreciate that the cheque in question was issued by the petitioner on 06.03.2017 on the basis of liabilities incurred in the year 2011. The cheque in question was not given towards discharge of a legally enforceable debt or liability. It was prayed that present complaint along with impugned order be set aside. 6. Section 138 of the Negotiable Instruments Act, 1881 deals with dishonour of cheque. It reads as under:- 138 Dishonour of cheque for insufficiency, etc., of funds in the account. -Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that ac....
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....g a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; (v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice;" The Supreme Court in Jugesh Sehgal V Shamsher Singh Gogi, (2009) 14 SCC 683 observed that above ingredients being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act. 8. The counsel for the petitioner argued that the trial court vide impugned order took cognizance wrongfully for offence punishable under section 138 of the Negotiable Instruments Act, 1988 and ordered for issuance of summon. The trial court did not appreciate that the present complaint does not disclose any legally enforceable debt or liability against the petitioner. The counsel for the petitioner relied on Prajan Kumar Jain V Ravi Malhotra,2009 (113) DRJ 275; Vijay Polymers Pvt. Ltd. & another V M/s Vinnay Aggarwal, 2009 ....
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....000.00. The petitioner through the respondent no 2 brokered deal of sale of other properties/plots for which the petitioner incurred total commission/consultancy fees of Rs. 20,10,000.00 towards the respondent no 2. 11.1 The petitioner and Jasween Sandhu in discharge of their liability handed over a cheque bearing no. 329623 dated 06.03.2017 amounting to Rs. 20,00,000 drawn on Syndicate Bank, Branch West Punjabi Bagh, Central Market, New Delhi-110026 i.e. cheque in question to discharge their legally enforceable debt to the respondent no 2 with assurance of encashment on presentation in order. However said cheque got dishonoured on presentation due to Payment Stopped by Drawer as intimated vide Return Memo dated 11.04.2017. The petitioner and Jasween Sandhu did not pay cheque amount despite legal notice dated 10.05.2017. Hence present complaint. 12. The legal issue pertaining to the liability of accused under section 138 of the Negotiable Instruments Act, 1881 in time barred debt was considered and discussed by different High Courts. The Kerala High Court in Sasseriyil Joseph V Devassia considered the question whether the respondent who issued the cheque in question in discha....
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....any, must be there before period of limitation is over, which is not the case of the complainant. Another Coordinate Bench of this court in Prajan Kumar Jain V Ravi Malhotra after relying on Vijay Polymers Pvt. Ltd. & another V M/s Vinnay Aggarwal observed that cheques which are stated to be subject matter of the complaint were issued for the discharge of a liability of a debt arising out of the agreement dated 14.6.2000 which had become time barred and as such debt was not a legally enforceable debt within the meaning of Section 138 Explanation of the NI Act. Accordingly, the complaint and all proceedings emanating there from were ordered to be quashed. In Jage Ram Karan Singh and another V State and another, the learned Single Judge of this court observed as under:- Therefore, I do not agree with the contention raised by the learned counsel for the petitioners that the Appellate Court has misinterpreted Section 139 of the NI Act. The Appellate Court has rightly held that the alleged responsibility of the respondent No.2, if any, had already become time-barred as on the date of the issuance of cheque and, therefore, the same cannot be said to be in discharge of a legally ....
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....iability in respect of the dishonoured cheque, it needs to be mentioned that section 118 and 139 of the Negotiable Instrument Act, 1881 embody some presumptions in favour of holder of cheque particularly as regard to existence of debt or liability which are rebuttable and can be rebutted by way of leading. It was further observed that trial Court would be able to take evidence and not the High Court. The learned Single Judge placed reliance on S. Natarajan V Sama Dharman, Criminal Appeal No. 1524 of 2014 decided by the Supreme Court by observing that whether the debt was time barred or not can be decided only after the evidence is adduced being a mixed question of law and fact. 15. The High Court of Karnataka in The Bidar Urban Co-operative Bank Ltd. V Mr. Gidrsh, Criminal Appeal No.200057/2016 decided on 17th December, 2020 observed that the complainant has failed to establish existence of legally recoverable debt. The trial court has rightly held that mere issuance of cheque without corresponding legally recoverable debt is not an offence. The trial court rightly acquitted the accused. 16. It is appearing from perusal of complaint that the respondent no 2 entered into Assur....
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....t cannot be taken in a mechanical or cryptic manner. It is not only against the settled judicial norms but also reflects lack of application of judicial mind to the facts of the case. However a Magistrate is not required to consider the defence of the proposed accused or to evaluate the merits of the material collected during investigation at time of taking cognizance. It is not necessary to pass a detail order giving detailed reasons while taking cognizance. The Supreme Court in Fakhruddin Ahmad V State of Uttaranchal, (2008) 17 SCC 157 also held as under:- Nevertheless, it is well settled that before a Magistrate can be said to have taken cognizance of an offence, it is imperative that he must have taken notice of the accusations and applied his mind to the allegations made in the complaint or in the police report or the information received from a source other than a police report, as the case may be, and the material filed therewith. It needs little emphasis that it is only when the Magistrate applies his mind and is satisfied that the allegations, if proved, would constitute an offence and decides to initiate proceedings against the alleged offender, that it can be po....