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2018 DIGILAW 1804 (BOM)

Domina De Souza v. Kamlakant Sawant

2018-07-26

C.V.BHADANG

body2018
JUDGMENT : C.V. Bhadang, J. 1. Rule, made returnable forthwith. The learned Counsel for the respondent waives service. Heard finally by consent of parties. 2. The petitioner, who is an accused in a complaint under Section 138 of the N.I. Act (Act, for short), filed by the respondent, is challenging the order dated 23/02/2016, passed by the learned Judicial Magistrate, First Class, Mapusa, issuing process against the petitioner, for the offence punishable under Section 138 of the Act. That order has been confirmed by the learned Sessions Judge vide judgment dated 27.03.2018 in Criminal Revision Application No. 43/2016. 3. The case made out by the respondent/complainant is that in the year 2005, the petitioner had purchased an ancestral plot of land belonging to the respondent and since then, the petitioner and the respondent were acquainted to each other. The respondent was in the business of transportation and had approached the petitioner to engage his trucks on hire for transportation of raw fish as the petitioner was in the business of exporting of fish in the name and style as Goan Bounty. Further, according to the petitioner, the respondent had licence to operate in three States i.e. Goa, Maharashtra and Karnataka and hence, the petitioner accepted the proposal of the respondent. Further, according to the respondent, the petitioner agreed to pay Rs. 3 Lakhs per month to the respondent for a period of 7 years for hiring his trucks i.e. from 01.01.2006 to 30.06.2013. It is the specific case made out that the petitioner issued two "undated" cheques to the respondent bearing nos. 079540 and 079539 drawn on her account in Central Bank of India, Panaji Branch. It was further contended that the agreement between the parties, (namely about the respondent providing his trucks to the petitioner and petitioner paying an amount of Rs. 3 Lakhs to the respondent), was oral and the petitioner had requested the respondent that first cheque should be presented for realisation after 7 years and the second cheque was to be presented two months thereafter. Eventually, the petitioner presented the cheque bearing No. 079539 dated 02.04.2015 for realisation on 25.05.2015, which cheque got dishonoured on account of the fact that the account of the petitioner was already closed somewhere in the year 2010. Eventually, the petitioner presented the cheque bearing No. 079539 dated 02.04.2015 for realisation on 25.05.2015, which cheque got dishonoured on account of the fact that the account of the petitioner was already closed somewhere in the year 2010. This led the respondent to issue a statutory notice to the petitioner on 23.06.2015, in which it was specifically claimed that two undated cheques each of Rs. 11,25,000/- were passed on to the respondent by way of security. The respondent, therefore, claimed the amount of Rs. 11,25,000/- from the petitioner in so far as cheque no. 079539 is concerned. On account of failure to pay the said amount, the petitioner filed a complaint against the petitioner under Section 138 of the Act. 4. The learned Magistrate, by the following order dated 23.02.2016, issued process against the petitioner: "Perused the complaint, Aff & docs, which corroborate each other. Based on the material on record, I am prima facie satisfied that accused has committed an offence u/s 138 NI Act. Issue s/s to the accused." 5. Feeling aggrieved, the petitioner approached the learned Sessions Judge in Criminal Revision Application No. 43/2016, which was dismissed on 27.03.2018. Hence, this petition. 6. I have heard Shri Karpe, the learned Counsel for the petitioner and Shri Gosavi, the learned Counsel for the respondent. With the assistance of the learned Counsel for the parties, I have gone through the record and the judgment of the learned Sessions Judge as well as the order passed by the learned Magistrate. 7. It is submitted by Shri Karpe, the learned Counsel for the petitioner that the learned Magistrate could not have issued process on the basis of the allegations in the complaint and the notice dated 23.06.2015. It is submitted that according to the respondent, there was an oral agreement between the parties, whereunder the respondent was to provide his trucks for transport of the fish by the petitioner and the petitioner had agreed to pay Rs. 3 Lakhs per month for a period of 7 years i.e. from 01.01.2006 to 30.06.2013. It is submitted that on his own saying, the petitioner had passed the undated cheques, somewhere in the year 2006, which according to the respondent, were to be presented after 7 years. 3 Lakhs per month for a period of 7 years i.e. from 01.01.2006 to 30.06.2013. It is submitted that on his own saying, the petitioner had passed the undated cheques, somewhere in the year 2006, which according to the respondent, were to be presented after 7 years. It is, thus, submitted that on the date, on which the cheques were signed and issued, there was no legally enforceable liability to pay to the respondent Rs. 11,25,000/- as mentioned in the subject cheque. He, therefore, submitted that the cheque could not have been said to be issued against the discharge of any legally enforceable debt or liability. Reliance, in this regard, is placed on the decision of the Hon'ble Supreme Court in the case of Indus Airways Pvt. Ltd. and Others vs. Magnum Aviation Pvt. Ltd. and Another, (2014) 12 SCC 539 and the decision of this Court in Joseph Vilangadan vs. Phenomenal Health Care Services Ltd. and Another, (2011) 1 BCR (Cri) 810. He submitted that although in the notice dated 23.06.2015, the respondent claimed that the cheques were by way of security, the respondent has cleverly not mentioned the said fact in the complaint. It is submitted that in any case, unless and until the respondent is able to show that on the date on which the cheques were signed and issued, there was a liability on the petitioner to pay the amount as mentioned in the cheque, no offence under Section 138 of the Act, can be said to be made out on account of dishonour of the cheque. 8. On the contrary, Shri Gosavi, the learned Counsel for the respondent has supported the impugned order. It is submitted that the learned Sessions Judge has rightly held that all these aspects, as claimed on behalf of the petitioner, have to be gone into at the trial and the order issuing process, cannot be quashed on any such ground. Shri Gosavi has placed reliance on the decision of the Supreme Court in the case of Sampelly Satyanarayana Rao vs. Indian Renewable Energy Development Agency Limited, (2016) 10 SCC 458 , in order to submit that a post dated cheque even if given as a security, when dishonoured, would give rise to offence under Section 138 of the Act. Shri Gosavi has placed reliance on the decision of the Supreme Court in the case of Sampelly Satyanarayana Rao vs. Indian Renewable Energy Development Agency Limited, (2016) 10 SCC 458 , in order to submit that a post dated cheque even if given as a security, when dishonoured, would give rise to offence under Section 138 of the Act. It is pointed out that the decision of the Supreme Court in the case of Indus Airways Pvt. Ltd. on which reliance is placed on behalf of the petitioner, has been considered by the Supreme Court in the case of Sampelly Satyanarayana Rao. Reliance is also placed on the decision of the Supreme Court in the case of Kishan Rao vs. Shankargouda, 2018 SCC Online (SC) 651, in order to submit that presumption arising under Section 118 read with Section 139 of the Act, (when the signature on the cheque is admitted), has to be rebutted during the course of the trial. He, therefore, submits that no case for interference is made out. 9. I have carefully considered the rival circumstances and the submissions made. 10. It is now well settled that at the stage of issuance of process, the Magistrate cannot consider any probable defence in as much as the accused is not before the Court when the order of issuance of process is passed. Thus, an order issuing process cannot conceivably be challenged on the basis of any actual or probable defence, which, as the learned Sessions Judge has rightly found, can only be gone into at the trial. However, it is entirely a different matter, when on the basis of the allegations in the complaint, the notice and the documents produced by the complainant and even after taking them at the face value, prima facie, no offence is made out. In my considered view, the present case falls in this later category. In the notice dated 23.06.2015, the respondent made out a case that there was an oral agreement, in which the respondent was to lend his trucks for the transport of fish by the petitioner and the petitioner was to pay Rs. 3 Lakhs per month to the respondent towards the said services and this agreement was for a period of 7 years i.e. from 01.01.2006 to 30.06.2013. 3 Lakhs per month to the respondent towards the said services and this agreement was for a period of 7 years i.e. from 01.01.2006 to 30.06.2013. It is further the specific case made out that the petitioner had issued two, "undated" cheques to the respondent, which were to be presented for encashment after 7 years in so far as the first cheque is concerned and two months thereafter, in so far as the second cheque is concerned. The respondent presented the cheque bearing No. 079539 dated 02.04.2015 on 25.05.2015, which got dishonoured as the concerned account was closed sometime in the year 2010. In the notice, there was a specific averment made that the two undated cheques were issued by way of security. The respondent did not claim in the complaint that the cheques were issued by way of security. However, rest of the averments as made in the notice, find place as they are in the complaint. The question, in such circumstances, is whether the dishonour of the cheque can give rise to an offence under Section 138 of the Act. 11. The Supreme Court in Indus Airways Pvt. Ltd. was concerned with a case where the post dated cheques were issued by the appellant/purchaser, as an advance payment in respect of purchase orders, in which case, the Hon'ble Supreme Court found that the cheques could not be said to have been issued in discharge of a legally enforceable debt or liability. This is what is held in para 13 of the judgment: "13. The explanation appended to Section 138 explains the meaning of the expression debt or other liability for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138. The explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138. 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 supplied, in our considered view, the cheque cannot be held to have been drawn for an exiting debt or liability. The payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability." 12. In para 19 of the judgment, it has been inter alia held that for every criminal liability to be made out under Section 138 of the Act, there should be a legally enforceable debt or other liability "subsisting on the date of drawal of cheque." 13. Coming to the present case, on the respondent's own saying, the subject cheque (along with other cheque, in respect of which the respondent chose not to file any complaint) was undated and in all probability, was passed somewhere in the year 2006, at the inception of the contract and was agreed to be presented for encashment after 7 years, which the respondent resultantly did by putting the date 02.04.2015. The subject cheque is shown to be for an amount of Rs. 11,25,000/-. Thus, on the basis of the averments in the notice as well as the complaint itself, it cannot be accepted, prima-face, that there was a liability of Rs. 11,25,000/- against the petitioner towards the respondent at the time when the cheque was signed and passed on to the respondent. In fact the averments would show that there were two undated cheques passed by the respondent. A specific query was made to the learned Counsel for the respondent to show that there is any case made out that on the date on which the cheques were issued, there was a total liability of Rs. 22,50,000/- (together with two cheques) against the petitioner, to which the answer was none. A specific query was made to the learned Counsel for the respondent to show that there is any case made out that on the date on which the cheques were issued, there was a total liability of Rs. 22,50,000/- (together with two cheques) against the petitioner, to which the answer was none. Admittedly, there is not even an averment that any such amount was due and outstanding on or about the date, on which the two cheques were issued by the petitioner. 14. In the case of Joseph Vilangadan, this Court had found that there was no debt or liability existing when the undated cheques were passed in favour of the respondent and the cheques were lying with the respondent since 2005 and were presented for encashment only in the year 2008. In such circumstances, this Court had set aside the order issuing process against the petitioner. 15. In my considered view, the ratio as laid down by this Court in the case of Joseph Vilangadan and Hon'ble Supreme Court in the case of Indus Airways Pvt. Ltd. would apply with equal force to the facts as obtaining in the present case. 16. Reliance placed on behalf of the respondent on the decision of the Hon'ble Supreme Court in the case of Sampelly Satyanarayan Rao, to my mind, is misplaced. In that case, the post dated cheques, which were described as security, were issued towards the repayment of the instalment of loan, which was already disbursed. It was, in these circumstances, held that the cheques were issued in discharge of existing liability, once the loan amount was disbursed and as per the agreement, instalment had fallen due on subsequent dates. The Hon'ble Supreme Court has distinguished the judgment in the case of Indus Airways Pvt. Ltd. on the ground that the post dated cheques in the case of Indus Airways Pvt. Ltd. were by way of advance payment for purchase order, which were subsequently cancelled and the payment under the cheques was stopped. The Hon'ble Supreme Court has distinguished the judgment in the case of Indus Airways Pvt. Ltd. on the ground that the post dated cheques in the case of Indus Airways Pvt. Ltd. were by way of advance payment for purchase order, which were subsequently cancelled and the payment under the cheques was stopped. The present case, in my considered view, would be governed by the decision of the Supreme Court in the case of Indus Airways Pvt. Ltd. and in fact, would stand on a better footing in as much as the cheque was agreed to be presented after 7 years of its being signed and handed over to the respondent and in such a case, can never be said to be in discharge of legally enforceable debt or liability, as existing, if any, on the date of its issue. 17. There cannot be any manner of dispute with the proposition that once the presumption arising under Section 118 read with Section 139 of the Act is raised, it can be rebutted by the accused on preponderance of probability at the trial. This can be done on the basis of cross-examination of the complainant and his witnesses, if any and/or by leading independent defence evidence. In a given case, the accused can also show on the basis of the allegations in the complaint and the notice themselves that no such presumption can either be raised or would stand rebutted in as much as the basic requirement of the cheque having been issued in discharge of a legally enforceable debt or liability is not satisfied. Here is a case, wherein on the say of the respondent himself and taking the contents of the notice and the complaint on their face value, it cannot be said that the cheque was issued for the discharge of any legally enforceable debt or liability, as on the date of issuance of the cheque. 18. I am aware that this Court would be slow in interfering with the orders of the present nature i.e. issuing process, which has the effect of dismissal of the complaint at the threshold. However, in the given facts and circumstances, I do not find that the order of issuance of process can be sustained. 18. I am aware that this Court would be slow in interfering with the orders of the present nature i.e. issuing process, which has the effect of dismissal of the complaint at the threshold. However, in the given facts and circumstances, I do not find that the order of issuance of process can be sustained. The learned Magistrate as well as the learned Sessions Judge, in my considered view, has failed to consider the relevant aspects and the impugned order issuing process, thus, cannot be sustained. In the result, the following order is passed: ORDER (i) The petition is allowed. (ii) The impugned order issuing process is hereby set aside. (iii) The complaint filed by the respondent is hereby dismissed. (iv) Rule is made absolute in the aforesaid terms.