TaxTMI 
TaxTMI 
2024 (6) TMI 703
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.... leave for filing the appeals are one and the same, they are taken up together and disposed of by this common judgment. 3. For the sake of clarity/convenience, the appellant in the appeals, who is the petitioner in the grant leave petitions will be referred to as 'appellant' and the respondent in the appeals and petitions will be referred to as 'respondents'. 4. In the appeals, notice had been ordered and in some of the appeals, the respondents have appeared through counsel. However, insofar as the criminal original petitions are concerned, where, leave is sought for, for filing the appeal, as no adverse order is being passed against the respondents therein, notice to the respective respondent in the criminal original petitions are dispensed with. 5. The facts in all the appeals/petitions are one and the same and, therefore, barring the specifics, the brief facts, which are required for appreciation of the issue are stated hereunder. 6. Chits run by the appellant are governed by the Tamil Nadu Chit Funds Act. The respondents in all the appeals/petitions are persons, who had entered into chit transaction with the appellant. The period of chit covered in all the cases is ....
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....s seeking leave to file appeal have been filed. 9. Learned counsel appearing for the appellant submitted that there is a clear admission that the respondents had partaken in the chit and had become the successful bidder and had been paid the bid amount. However, they committed default in paying the chit amount regularly after receiving the bid amount. It is the further submission of the learned counsel that upon constant follow up, the respondents agreed to pay the defaulted amount and had given the cheque, which had since been dishonoured, leading to the filing of the complaint. 10. It is the further submission of the learned counsel that the once the cheque given by the respondents is dishonoured, which is towards the discharge of whole or part of the debt, then the presumption falls on the respondents to prove that the cheque was not given for the purpose of discharge of the debt. Since the respondents have failed to prove the same, necessarily the benefit should fall on the appellant and the court below ought to have appreciated the said fact in proper perspective, which it has miserably failed to do and, therefore, the respective orders require interference at the hands ....
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....ly enforceable debt, but was given only as a security. Rightly appreciating all the aforesaid facts, the courts below have rightly dismissed the complaint filed by the appellant by giving cogent and convincing reasons and the same does not require any interference at the hands of this Court. 15. This Court gave its careful consideration to the submissions advanced by the learned counsel appearing on either side and perused the materials available on record as also the relevant provision of law with regard to dishonour of cheques. 16. The short question that falls for consideration of this court is - Whether a complaint could be maintained u/s 138 of the Act with regard to a dishonoured cheque without establishing that it is for enforcing a legally enforceable debt, which is on account of a default alleged to have been committed in the payment of chit. 17. Before appreciating the facts in issue, Sections 138 and 139 of the Act, which are relevant for the consideration of the present issue, requires to be adverted to and the same is quoted hereunder :- "138. Dishonour of cheque for insufficiency, etc., of funds in the account. Where any cheque drawn by a pe....
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....l perusal of the order passed by the courts below in the cases, which are the subject matter of the present appeals/petitions reveal that the court below had embarked upon a careful analysis of the materials placed before it and had come to the conclusion that though the cheques were dishonoured, however, there is no material placed by the appellant to show that it was towards the discharge of an legally enforceable debt and also taking into consideration the fact that no details such as calculation statement, account statement, demand notice calling upon the respondent to pay the amounts towards the monthly contribution, etc., have been produced by the appellant, the courts below have rejected the complaint. 20. This Court, with a view to find out the bona fides of the claim made by the appellant with regard to the cheques being issued to discharge a legally enforceable debt, perused the various documentary evidence produced by the appellants. 21. A careful perusal of the various documents produced by the appellant in the respective complaints against the respondents show that, but for the account statement for the said period, there is no other material to show that there i....
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.... enforceable debt nor any materials have been placed by the appellant to show that there existed a legally enforceable debt towards which the cheques in issue were given. Without the appellant discharging his share u/s 138, the appellant cannot fall back on Section 139 to show that the presumption would have to be given to the appellant and the ball would have to be placed in the court of the respondents to prove that the cheques were not given towards the discharge of a legally enforceable debt or other liability. Therefore, the courts below, rightly appreciating Section 138 of the Act has held that the appellant having not established that there existed a legally enforceable debt and the cheques which were given by the respondents, which stood dishonoured were given towards its discharge, had rightly negatived the contention of the appellant, with which this Court has no qualms or grievance. 26. Further, one other aspect has to be placed on record. The debt, which is alleged by the appellant is towards the discharge of monthly chit amounts by the various respondents. The Chit Funds Act provides for necessary avenues in which the amount in default can be claimed by the appellan....
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....Section 138 of the Act. The High Court of Delhi addressed the same issue in Alliance Infrastructure Project Ltd. v. Vinay Mittal. The High Court observed that when part payment is made after the cheque is drawn, the payee has the option of either taking a new cheque for the reduced amount or by making an endorsement on the cheque acknowledging that a part payment was made according to the provisions of Section 56 of the Act. It was also held that the notice of demand which requires the drawer of the cheque to make payment of the whole amount represented in the cheque despite receiving part repayment against the sum, before the issue of notice, cannot be valid under Section 138(b) of the Act. A similar view was taken by the High Court of Gujarat in Shree Corporation v. Anilbhai Puranbhai Bansal. 29. Under Section 56 read with Section 15 of the Act, an endorsement may be made by recording the part-payment of the debt in the cheque or in a note 12 (2008) 3 KLJ 784 13 ILR (2010) III Delhi 459 14 [2018 (2) GLH 105] appended to the cheque. When such an endorsement is made, the instrument could still be used to negotiate the balance amount. If the endorsed cheque when presented f....
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.... the amount, the whole claim of the appellant is based on the alleged default said to have been committed by the respondents in non-payment of the monthly chit amount. However, as aforesaid, no material with regard to the payments made, the details of the account statement, the receipts and payments and payment made towards the prize amount to the respondents have not been established. 32. In fact, the whole case of the respondents is on the ground that they dispute the amount shown by the appellant and that the cheque, which was given for security purpose was misused by the appellant and, therefore, the amount having not been established to be a legally enforceable debt, the dishonour of the cheque would not attract the wrath of Section 138 of the Act. Therefore, the aforesaid decision also does not in any way aid the appellant. 33. However, this Court is not barring the avenue of the appellant with regard to dishonour of cheque and seeking relief under Section 138 of the Act. For the appellant to seek recourse u/s 138 of the Act, necessarily, the appellant has to place the requisite details like the statement of account, the details of the payments made, the default amount ....