Karnataka High Court
Q-Soft System And Solutions (P) Ltd. vs Sri H.N. Giridhar S/O H.G. Shankare ... on 14 December, 2007
Equivalent citations: ILR2008KAR643, AIR 2008 (NOC) 1294 (KAR.) = 2008 (2) AIR KAR R 287, 2008 CRI. L. J. (NOC) 550 (KAR.) = 2008 (2) AIR KAR R 287, 2011 ACD 1494 (KAR), 2008 (4) ALJ (NOC) 841 (KAR.) = 2008 (2) AIR KAR R 287, 2008 (2) AIR KANT HCR 287, (2008) 4 KANT LJ 240, (2012) 1 RECCRIR 689, (2012) 2 RECCIVR 59, (2008) 3 ICC 619, (2008) 65 ALLINDCAS 673 (KAR), (2008) 2 NIJ 288, (2008) 3 ALLCRILR 213, (2008) 3 BANKCAS 381
JUDGMENT H.V.G. Ramesh, J.
1. This appeal is against the order of acquittal passed by the 16th Addl. CMM., Bangalore, dated 1.10.07.
2. Heard the Counsel for the appellant
3. The case of the appellant is that the respondent being the Software Engineer has issued a cheque for Rs. 2 lakhs in favour of the appellant pursuant to the agreement entered into between him and the appellant to serve the appellant/company for a period of two years and that after his appointment he had also been imparted training at the cost of the Management; subsequently, after having worked for three months, respondent left the service of the company and thereby caused loss to the appellant. As such, complaint came to be filed by the appellant stating that by virtue of the agreement when the cheque had been issued it becomes enforceable debt. As against it, the trial Court, after enquiry, dismissed the complaint on the ground that there is a contract between the parties and there is a breach of contract and although, the cheque was issued for Rs. 2 lakhs by way of damages, it is purely a civil transaction and as such, the accused is not guilty of the offence alleged and accordingly, has acquitted him.
4. Along with this appeal an application for special leave is also tiled. On perusal of the order of the trial Court it is seen that the respondent/accused had not issued the cheque either to clear of any debt or in connection with any other transaction, since subsequent to his appointment after the training, the respondent had been transferred to Mumbai, expressing his difficulties, he shown to have refused to continue the services at Mumbai.
5. According to the appellant, the respondent herein has joined the services of the appellant/Q-Soft System & Solutions on 15.2.05 as per Ex. Pl 1 and in the event if he leaves the job before completion of two years of service he has to give damages of Rs. 2 lakhs to the company and in this connection an agreement is also entered into wherein the respondent had issued a cheque for Rs. 2 lakhs and that without any reasons, the respondent has violated the terms and conditions and despite taking action he did not pay the amount, as such, the complaint was filed under Section 138 of N.I. Act.
6. The defense of the accused/respondent is that he was selected on temporary basis, except admitting the signature in the cheque he denied all other contents in the cheque. According to him, within two months itself the complainant had transferred him to Mumbai to work only for Rs. 5,000/-. Since the climate at Mumbai was not suitable to him and also that the amount of Rs. 5,000/- was not sufficient to meet out his livelihood and expenditure, after working for few days at Mumbai he returned back to Bangalore and thereafter he was harassed by the complainant It is his specific contention that violating the human rights he has been exploited and he had been removed from the service; the cheque was obtained under coercion and that he has not voluntarily given the cheque; the date and other contents in the cheque are being forged by the complainant except the signature. Accordingly, it is contended that he is not liable to pay the cheque amount Further according to him the cheque so collected by him is not towards any liability by way of debt and it was given only as a matter of security; even the complainant had obtained the award in conciliation, as such, the complaint is not maintainable since simultaneously two proceedings cannot be initiated against the same person.
7. As per Section 138 of NI Act, 1881, the liability would arise on the part of the drawer when the cheque is issued for the discharge in whole or in part, of any debt or other liability, is returned by the bank unpaid. The object of Section 138 is to inculcate faith in the efficacy of banking operations and credibility in transacting business on negotiable instruments. Despite civil remedy, Section 138 intended to prevent dishonesty on the part of the drawer of negotiable instrument to draw a cheque without sufficient funds in his account maintained by him in a bank and induce the payee or holder in due course to act upon it Further, the object of the Negotiable Instruments Act makes it clear that the intent of Parliament is that honest drawer should not suffer at the mechanisation of dishonest of drawee and the intention of drawee becomes important.
8. In the instant case there is a direction issued by the respondent/drawer to make stop payment Further according to him, the cheque was not given voluntarily and the date and the writings were forged in the instrument and also he is not liable to pay the amount mentioned in the cheque either towards any debt or liability.
9. In the decision reported in 2007 (2) SC (Cri) 318 in Narayan Motion's case it is observed that, the onus of the accused is not as heavy as that of the prosecution and it is only needed to rebut the presumption by probable defense.
10. Section 139 of the Negotiable Instruments act provides for the initial presumption in favour of the complainant unless the contrary is proved. In the instant case the initial presumption has been rebutted by the probable defense taken by the respondent stating that although there was an agreement entered into, there is no such violation of the contract of employment, since the complainant had transferred him from Bangalore to Mumbai which has worked out hardship to him, the said contingency has made him to return back from Mumbai to Bangalore as he was hardly paid Rs. 5,000/- and it was not even sufficient to meet out his day to day expenses.
11. The very transaction and the issuance of cheque was only in respect of the contract employment and as seen even it is not a straight case of breach of contract since, on such transfer being made, the respondent expressing his genuine difficulties either he has resigned from the job or he has been removed by the Management for not continuing his services at Mumbai.
12. As per Section 25 of the Indian Contract Act, 1872, an agreement without consideration is void unless it is in writing and registered or is a compromise to compensate for something done or is a promise to pay a debt barred by limitation. In Explanation 2 it is clearly stated that, an agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate. The very verdict expressed that there must be a free consent. In the instant case, the defense taken by the respondent is that the cheque was obtained by him under coercion to exploit his position, as such, it may be termed as a void contract after ascertaining the factual position. Chapter VI of the Contract Act deals with the consequences of Breach of Contract. Section 73 of the said Act provides for, Compensation for loss or damage caused by breach of contract. When a contract has been broken, the party who suffers by such breach is entitled to receive from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach.
13. In the instant case, there appears to be some dispute in issuance of cheque and according to the respondent, the cheque was obtained under coercion, necessarily an enquiry has to be held to ascertain as to whether the cheque had been issued by the respondent voluntarily out of his own volition or it was obtained under coercion. It is also seen that within a short time the respondent had been transferred by the complainant from Bangalore to Mumbai and mat the respondent has returned back from Mumbai expressing his genuine difficulties. Hence, it is purely a matter of civil transaction which the Civil Court has to adjudicate and ascertain as to whether there is a breach of contract or there is any violation of conditions of the agreement and whether the very conduct of the complainant is without any blemish, in a separate enquiry to be held if need be. When the cheque is dishonoured for non-payment and the respondent has come out with a probable defense, then the presumption is rebutted and the respondent cannot be held responsible and the appellant cannot proceed against the respondent under Section 138 of the Negotiable Instruments Act.
For the foregoing reasons, the application filed seeking leave is rejected and consequently, the appeal is also dismissed.