TaxTMI 
TaxTMI 
2026 (5) TMI 259
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....by the revision preferred by the Petitioner (A1) against the order passed by the learned Metropolitan Magistrate, 33rd Court, Ballard Pier, on 4 January 2024 of issue of process against the Petitioner (A1), and its directors for an offence punishable under Section 138 read with 141 of the Negotiable Instruments Act, 1881, came to be dismissed. 3. Shorn of unnecessary details, the background facts leading to this Petition, can be stated as under : 3.1 The Petitioner (A1) is a Private Limited Company. Accused No. 2 is alleged to be a director and signatory to the subject cheque. Accused No. 4 is its Managing Director and accused Nos. 3, 5 and 6 are the whole-time directors of accused No. 1 Company. 3.2 The petitioner (A1) is a family run company . A3 is the family patriarch. Accused No. 4 is the son of accused No. 3. Rest of the accused are the wife and children of accused No. 4. Respondent No. 2 - complainant is another son of accused No. 3. 3.3 In the wake of disputes among the family members of accused No. 3, an Arbitrator came to be appointed. On 4 January 2017, consent terms were executed amongst accused Nos. 2 to 6, and Krishnabai Jindal, the wife of accused No. 3, ....
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....nishable under Section 138 read with 141 of the N.I. Act, 1881. 3.10 By an order dated 4 January 2024, learned Magistrate was persuaded to issue process against the Petitioner and accused Nos. 2 to 6. 3.11 Being aggrieved, the Petitioner preferred a revision before the learned Sessions Judge raising multi-fold grounds. By the impugned judgment and order dated 28 August 2025, the learned Additional Sessions Judge dismissed the revision opining, inter alia, that, though the cheque did not appear to have been issued in the discharge of the legal debt of the Petitioner, yet, it appeared to be issued towards the discharge of the "other liability". Learned Magistrate had applied his mind and recorded adequate reasons for the issuance of process against the Petitioner and its directors, and, thus, no interference was warranted in the exercise of the revisional jurisdiction. 3.11 Being further aggrieved, the Petitioner has invoked the writ and inherent jurisdiction of this Court. 4. I have heard Mr. Rafique Dada, the learned Senior Advocate for the Petitioner, and Mr. Aabad Ponda, learned Senior Advocate for Respondent No. 2 - complainant, at length. The learned Senior Advocate....
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....ny, submitted Mr. Dada. 9. Per contra, Mr. Ponda, learned Senior Advocate for the Complainant submitted that the scope of interference with an order of issuance of process is further constricted by the dismissal of the revision application preferred by the Petitioner by the impugned order. In such a situation, the powers under Section 528 of the BNSS are required to be exercised even more sparingly and cautiously. 10. Mr. Ponda would urge, the petition proceeds on an erroneous impression that the cheque ought to have been drawn in discharge of the debt or liability of the drawer himself. The offence under Section 138 of the Act, 1881 can also be committed where the cheque has been drawn in discharge of "other liability", provided it is a legally enforceable. The liability need not be that of the drawer himself. 11. Mr. Ponda further submitted that, at this juncture, this Court cannot delve into the contentious issues whether the cheque was drawn in discharge of legally enforceable or liability as that is a matter to be adjudicated at the trial. The contentions raised by the Petitioner, according to Mr. Ponda, are in the realm of defences, which cannot be considered while e....
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....eady in the possession of the complainant : Assets Value (INR Crs.) Flat No. 264, Tahnee Heights 40 Flat No. 111, Peacock Palace 15 Office at Maker Chambers VI 8 Cheque No.014283 on HDFC Bank 37 Total 100 16. The cheque at Item No. 4 is the subject cheque drawn for the sum of Rs. 37 Crores by the Petitioner company. Under the said letter, the complainant was called upon to acknowledge receipt of possession of assets, related property documents and cheque towards the full and final cash payment. 17. In the Petition, the Petitioner asserts, the said cheque was drawn as Shrikrishan (A3) had requested for a loan of the said amount to facilitate the payment thereof, as a gift to Respondent No. 2 - complainant, on the occasion of wedding of Respondent No. 2's daughter. Thus, the cheque was drawn. However, on the instructions of Shrikrishan (A3) that he did not intend to avail the said loan on account of continuous discord with the complainant, the Petitioner issued the stop payment instructions on 23 November 2020. 18. Evidently, the issue of cheque is not disputed. A counter version in regard to the purpose for which the cheque was drawn by t....
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....ction stands with the words "Where any cheque". The above noted three words are of extreme significance, in particular, by reason of the user of the word "any" the first three words suggest that in fact for whatever reason if a cheque is drawn on an account maintained by him with a banker in favour of another person for the discharge of any debt or other liability, the highlighted words if read with the first three words at the commencement of Section 138, leave no manner of doubt that for whatever reason it may be, the liability under this provision cannot be avoided in the event the same stands returned by the banker unpaid. The legislature has been careful enough to record not only discharge in whole or in part of any debt but the same includes other liability as well. This aspect of the matter has not been appreciated by the High Court, neither been dealt with or even referred to in the impugned judgment. 11. The issue as regards the co-extensive liability of the guarantor and the principal debtor, in our view, is totally out of the purview of Section 138 of the Act, neither the same calls for any discussion therein. The language of the Statute depicts the intent of th....
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....ned by him, which subsequently gets dishonoured upon being presented before the drawee, would be covered by Section 138 if the payee is able to establish that there was some sort of an arrangement by way of which the debt was assumed by the drawer." (Emphasis supplied) 23. In view of the aforesaid position in law, the substratum of the submission of Mr. Dada that, in the absence of privity between the Petitioner (A1) and the complainant, and the Petitioner (A1) not being a party to the consent award and, consequently, not being liable to satisfy the consent award, the Petitioner could not have been prosecuted for an offence punishable under Section 138 of the Act, 1881, though the subject cheque was drawn on an account maintained by the Petitioner (A1), falls through. 24. As a second limb of the submission, Mr. Dada would urge, even otherwise, nothing was due and payable under the consent award on the date the subject cheque was drawn for a sum of Rs. 37 Crores. A reference was made to clause 4 of the consent award, under which the complainant was to make good the excess amount of Rs.99.25 Crores and, only thereafter, business transfer under the consent terms was to ....