TaxTMI 
TaxTMI 
2022 (3) TMI 1555
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....or the respondent in all the three cases. 4. Brief facts leading to the filing of these petitions, as borne out from the pleadings, are as follows: The petitioners and the respondent enter into a Joint Development Agreement ('JDA' for short) on 28-01-2015 and Supplementary Agreement ('SA' for short) on 06-02-2015. Several conditions of the JDA/SA bind the parties to the said agreements and certain cheques were issued for different amounts at different points in time in furtherance of the said agreements. Those cheques were all honoured. Three particular cheques issued again in furtherance of the JDA/SA resulted in them being dishonoured. The dishonouring of cheques led to initiation of legal proceedings against the petitioners by the respondent. Complaints invoking Section 200 of the Cr.P.C. were registered against the petitioners by the respondent on 05-10-2019 and 04-10-2019. The learned Magistrate took cognizance of the offence and issued summons to the petitioners on 07-11-2019 in all these cases. It is at that juncture the petitioners have knocked the doors of this Court with the present petitions. 5. The learned counsel appearing for the petitioners would vehemently ....
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....Hundreds only) of Refundable and Non Refundable Deposits Towards Joint development of Schedule 'A' and Schedule 'B' properties as follows: a) Rs.35,00,000/- (Rupees Thirty Five Lakhs only) by way of Cheque bearing No.826477 Dated ...... Drawn on Karnataka Bank Limited, Nehru Nagar Branch, Bengaluru. Subject to First party getting the Schedule 'A' and Schedule 'B' properties converted for Residential purposes. b) Rs.35,00,000/- (Rupees Thirty Five Lakhs only) by Way of Cheque bearing No.826478 dated ....... drawn on Karnataka Bank Limited, Nehru Nagar Branch, Bangalore upon plan sanction by the concerned Authorities. c) The remaining last installment amount of Rs. 34,37,500/- (Rupees Thirty four Lakhs Thirty Seven Thousand Five Hundred only) by way of cheque bearing No.826479 Dated........... Drawn on Karnataka Bank Limited, Nehru Nagar Branch, Bengaluru. Upon signing of agreement pertaining to apportionment and Identification of First and Second party's share." The afore-quoted clause in the SA clearly states that the second party developer has agreed to pay the remaining balance of Rs.1,04,37,500/- of refundable and non-refundable deposits towards joi....
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....eques had to be presented after them getting matured or ripen for their presentation. 12. The further facts narrated with regard to termination of JDA/SA and the notice with regard to appointment of an Arbitrator by the petitioners is not the concern of this Court at this juncture. It is for the parties to resolve their dispute before the Arbitrator or otherwise. The issue concerns, the proceedings under Section 138 of the Act. In the teeth of the afore-narrated facts and the conditions, the proceedings instituted by the complainant against the petitioners are inappropriate as cheques had not yet ripen for their presentation and had not yet become a legally recoverable debt or a liability. 13. It is now germane to consider the judgments relied on by the respective learned counsel. In the judgment of SUNIL TODI (supra), the Apex Court while following entire spectrum of law with regard to the proceedings under the Act, has held as follows: "30. Thus, the term debt also includes a sum of money promised to be paid on a future day by reason of a present obligation. A post-dated cheque issued after the debt has been incurred would be covered by the definition of 'debt'. Ho....
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....en stated as follows:− "You request to my client for loan and after accepting your word my client give you loan and advanced loan and against that you issue different cheque all together valued Rs. One crore and my client was also assured by you will clear the loan within June/July 2015 and after that on 26.10.2015 my client produce the cheque for encashment in H.D.F.C. Bank all cheque bearing No.402771 valued Rs. 25 Lakh, 402770 valued Rs.25 lakh, 402769 valued Rs. 50 lakh, (total rupees one crore) and above numbered cheques was returned with endorsement "In sufficient fund". Then my client feel that you have not fulfil the assurance." (Emphasis supplied) The Apex Court holds that the contention with regard to cheque being dishonoured and its justification or otherwise, would arise in a circumstance where the debt has not become recoverable and the cheque issued as security has not matured to be presented for recovery of the amount. If the due date as per the terms of agreement for payment has not yet arrived, it does not become a matured event to initiate proceedings under the Act; same is the case at hand, as explained hereinabove. The Apex Court in the case....
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....f such condition then purchaser may have to make good the loss that might have occasioned to the seller but that does not create a criminal liability under Section 138. For a criminal liability to be made out under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. We are unable to accept the view of the Delhi High Court that the issuance of cheque towards advance payment at the time of signing such contract has to be considered as subsisting liability and dishonour of such cheque amounts to an offence under Section 138 of the N.I. Act. The Delhi High Court has traveled beyond the scope of Section 138 of the N.I. Act by holding that the purpose of enacting Section 138 of the N.I. Act would stand defeated if after placing orders and giving advance payments, the instructions for stop payments are issued and orders are cancelled. In what we have discussed above, if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not ....
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....ay the amount due to the complainant immediately. The courts on the one hand should not encourage such a practice; but, on the other, cannot also travel beyond its jurisdiction to interfere with the proceeding which is otherwise genuine. The courts cannot also lose sight of the fact that in certain matters, both civil proceedings and criminal proceedings would be maintainable." (Emphasis supplied) Thus, the law with regard to such interference in the proceedings under the Act is that, if documents of unimpeachable character are shown to the Court, the Court has to take that into consideration, as further proceedings should lead to a ground of harassment to the accused. It is the same view of the Apex Court in the case of SAMPELLY SATYANARAYA RAO (supra), wherein it is held as follows: "14. In HMT Watches Ltd. v. M.A. Abida [HMT Watches Ltd. v. M.A. Abida, (2015) 11 SCC 776 : (2015) 4 SCC (Cri) 552] , relied upon on behalf of the respondent, this Court dealt with the contention that the proceedings under Section 138 were liable to be quashed as the cheques were given as "security" as per defence of the accused. Negativing the contention, this Court held: (SCC pp. 779-....
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....It, however, does not mean that documents of unimpeachable character should not be taken into consideration at any cost for the purpose of finding out as to whether continuance of the criminal proceedings would amount to an abuse of process of court or that the complaint petition is filed for causing mere harassment to the accused. While we are not oblivious of the fact that although a large number of disputes should ordinarily be determined only by the civil courts, but criminal cases are filed only for achieving the ultimate goal, namely, to force the accused to pay the amount due to the complainant immediately. The courts on the one hand should not encourage such a practice; but, on the other, cannot also travel beyond its jurisdiction to interfere with the proceeding which is otherwise genuine. The courts cannot also lose sight of the fact that in certain matters, both civil proceedings and criminal proceedings would be maintainable.' 12. In Rallis India Ltd. v. Poduru Vidya Bhushan [Rallis India Ltd. v. Poduru Vidya Bhushan, (2011) 13 SCC 88 : (2012) 3 SCC (Civ) 269 : (2012) 1 SCC (Cri) 778] , this Court expressed its views on this point as under: (SCC p. 93, para 12)....