2003 (10) TMI 697

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....s. JUDGMENT Jiwan Dass Kapoor, J. 1. The petitioner entered into an agreement with respondent No. 1 for production of tomato crop in 1000 acres, 500 acres at Central State Farms Suratgarh and 500 acres at Central State Farm, Ladhowal on the terms and conditions mentioned in the agreement. The relevant terms and conditions of payment are as under:- Terms of Payment 9. One....

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....s dated 1.6.1996 and 30.6.96 in favor of respondent No. 1 for Rs. 20 lac each. In terms of the agreement, these cheques were to be replaced by the petitioner company by way of demand draft of the total value of Rs. 20 lac each. Admittedly demand drafts amounting to Rs. 40 lac were given to respondent No. 1. Instead of replacing the cheques with these demand drafts respondent No. 1 presented those ....

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....ose cheques which are towards liability. Once the said liability stands discharged the offence under Section 138 of the Negotiable Instruments Act ceases to exist. Proceedings under Section 138 of the Negotiable Instruments Act cannot be converted into civil suit for recovery. These are specific proceedings and confine only to cheque drawn by a person on an account maintained by him with a banker ....