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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> High Court of Bombay If cheque is not issued for discharge of any debt or other liability, Section 138 of NI Act cannot be invoked MANU/MH/3200/2019 - (15 Nov 2019) </td> </tr> <tr> <td align="left" valign="top">Shantaram Namdeo Sathe Vs. The State of Maharashtra and Ors.</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE">Present is an appeal filed under Section 378 of the Code of Criminal Procedure, 1973 (CrPC) impugning an order and judgment passed by the Judicial Magistrate, by which the Magistrate was pleased to acquit the accused, i.e., Respondent no. 2 herein. 
The complainant, i.e., the Appellant, was an agriculturist and was raising various crops in his land including grapes. The accused/Respondent carries on business as a trader and, exports grapes. The accused is alleged to have purchased grapes from the complainant, paid some amount and for the balance due, gave a cheque on 23rd May 1997 for Rs. 2 lakhs. When the cheque was presented, the cheque was returned unpaid in view of the stop payment instructions given by the accused/Respondent. It is the case of the complainant that he requested the accused to honour the payment but the accused avoided making payments and therefore, by a notice dated 8th June 1997 the complainant called upon the accused to make payment but despite receipt, the accused neither responded nor made the payment. Hence, the complaint was filed on 5th July 1997. 
Process was issued and the plea of the accused was recorded. Accused pleaded not guilty and claimed to be tried. The accused does not deny having purchased grapes but states that the cheque of Rs. 2 lakhs was given only as a security cheque and he paid Rs. 2,25,000 to the complainant in three installments of Rs. 25,000, Rs. 1,85,000 and Rs. 15,000, which was paid to a third party on the instructions of the complainant. Accused says that, he gave blank cheque as security. He had put the signature but no date or amount or name was filled in. Therefore, there was no legal liability due. Moreover, the stop payment instructions was given on 12th September 1996, whereas the cheque is dated 25th May 1997 and that itself shows the complainant's claim is bogus. 
The complainant is totally unreliable and in view of complainant's evidence, the stand of the accused/Respondent seems to be more plausible. The complainant also states that, he had been paid Rs. 25,000 in cash and he did not issue any receipt for that amount. The fact that, he had received Rs. 25,000 in cash is not mentioned in the complaint and in his examination in chief. 
It is settled law that the important ingredient for the offence punishable under Section 138 Section 138 of Negotiable Instruments Act, 1881 (NI Act) is that cheque must have been issued for the discharge in whole or in part of any debt or other liability. If the cheque is not issued for the discharge of any debt or other liability, Section 138 of Act cannot be invoked. Present Court in the matter of Joseph Vilangadan Vs. Phenomenal Health Care Services Private Limited and Anr. and in the matter of Adarsh Gramin Sahakari Pat Sanstha Maryadit, Wadi, Nagpur Vs. Dattu Ramdasji Paithankar has held that, if the cheque is issued only as security for performance of certain contract or an agreement and not towards the discharge of any debt or other liability, offence punishable under Section 138 of Act is not made out. 
The complainant in his cross examination has admitted that the cheque issued was only for guarantee. A person, who's case is based on falsehood, has no right to approach the Court. In such a situation, as held by the Apex Court in S.P. Chengalvaraya Naidu Vs. Jagannath, he can be summarily thrown out at any stage of the litigation. Appeal dismissed.</td> </tr> <tr> <td align="left" valign="top" >Relevant : Joseph Vilangadan Vs. Phenomenal Health Care Services Private Limited and Anr. <manuid>MANU/MH/1886/2010</manuid>, Adarsh Gramin Sahakari Pat Sanstha Maryadit, Wadi, Nagpur Vs. Dattu Ramdasji Paithankar <manuid>MANU/MH/0068/2010</manuid>, S.P. Chengalvaraya Naidu Vs. Jagannath <manuid>MANU/SC/0192/1994</manuid></td> </tr> <tr> <td align="left" valign="top" >Tags : Cheque, Liability, Acquittal</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr>  <td align="left" valign="top">Source : newsroom.manupatra.com</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> </table> </div> </body> </html>