Delhi District Court
Bhupinder Singh Sawhney vs M/S S.E.Investment Ltd on 21 March, 2013
Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd
CR No. 17/13
IN THE COURT OF SHRI VIJAY KUMAR DAHIYA
ADDITIONAL SESSIONS JUDGE
DWARKA COURTS : DELHI
In the matter of :
Bhupinder Singh Sawhney
S/o Sh. Basant Singh Sawhney
R/O A41, Rosewood City, Sector 49
Gurgaon, Haryana ...Petitioner
VERSUS
M/s S.E.Investment Ltd.
S547, 2nd Floor, School Block
Main Road, Shakkarpur
Delhi110092.
State
Through Public Prosecutor
Prosecution Branch, Dwarka Courts
New Delhi75. ... Respondents
CR No. 17/13
Date of Institution: 22.01.2013
Reserved for orders on: 19.03.2013
Judgment announced on: 21.03.2013
JUDGMENT
1. Vide this order, I shall dispose of the revision petition filed by the petitioner against the impugned order dated 02.11.2012 whereby the petitioner has been summoned in the complaint case.
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2. Brief facts, in net shall, are that respondent/complainant M/s S.E.Investment Ltd had advanced a loan of Rs. 1,90,00,000/ to the petitioner, Sh. Bhupinder Singh Sawhney in terms of loan agreement dated 27.12.2011. It is further stated that the petitioner has failed to pay the outstanding dues and the complainant/respondent has presented the cheque bearing No. 349160 for amount of Rs.1,90,00,000 dated 28.06.2012 which was dishonoured and proceedings under section 138 NI Act were initiated and by way of impugned order, petitioner has been summoned in the present complaint case.
3. Feeling aggrieved by the impugned order, the present revision petition filed.
4. On merits, it has been contended that ld. Trial Court has failed to appreciate that the provision of section 202 Cr.PC has not been complied with in the present case as the petitioner/accused is residing in Gurgaon and it was mandatory for the ld. Trial Court to follow the mandate of this provision and the summoning order stand vitiated on account of non compliance of section 202 Cr.PC. It is further submitted that summoning order is bad in law in as much as provision of section 297 CrPC has not been complied so far as the verification of the affidavit annexed with the complaint. It is further stated that Ld. Trial Court has failed to appreciate that no illegal enforcement debt or liability is against the petitioner and the said loan agreement and guarantee agreement filed by the CR No.17/13 -:2:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 complainant/respondent are void ab initio in the eyes of law. It is further contended that no legally enforceable debt or liability is made out against the petitioner/accused as the respondent/complainant has charged interest at the rate of 33% per annum in violation of Usurious Loan Acts 1918. It is further contended that there is no whisper in the complaint filed by the respondent that accused/petitioner was owing any liability or debt towards the complainant/respondent which was sought to be discharged by way of issuance of said cheque in question. It is further submitted that two complaints have been filed by the complainant/respondent and 138 NI Act against the petitioner as well as his son and two complaints in respect of same amount is not maintainable under the NI Act as the liability of the petitioner as a principal debtor is co extensive with that of the guarantor under civil law.
5. It is further contended that Ld. Trial Court has passed the summoning order without application of mind as the Ld. Trial Court was vested with discretionary power to summon the accused by exercising the said discretion in a judicious manner and the Ld. Trial Court was supposed to exercise a great deal of caution before passing the summoning order. The Magistrate is required to form an opinion that there is sufficient ground for proceeding in the case and for forming that opinion, the magistrate will be required to apply his mind to the material placed before him and pass a speaking order indicating as to from which material, the case for proceedings against different set of accused was made out and for what of the offences CR No.17/13 -:3:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 and the impugned order is contrary to well settled principle of law. In this regard, he had relied upon G. Sagar Suri vs State of UP 2000(2) SCC 536, D.A.Mehta @ 2 Ors. vs. The Regional Director, ESI. Corporation 1991(3) Crimes 72, Charanjeet Singh vs DDA & Anr.94 (2001) DLT 335, Ravindra Goel & Anr. Vs. State & Anr. 2007(1)JCC
465.
6. It is further contended that impugned order is not sustainable in the eyes of law as the same has been passed without examining the nature of allegation made in the complaint as well as the evidence both oral or documentary in support thereof, otherwise, Ld. Trial Court had to carefully scrutinize the evidence brought on record and himself have put questions to the complainant and his witnesses to bring out the truthfulness of the allegations and to form opinion whether, prima facie, case is made out to summon the accused or not. In this regard, he had relied upon Pepsi Foods ltd. and Anr. vs. S.J.Magistrate and Ors JT 1997 (8) SC
705.
7. It is further contended that the impugned order is illegal per se and not sustainable in the eyes of law and petitioner is not amenable to the territorial jurisdiction of the court at Delhi so without holding any enquiry, summoning of the accused/petitioner is bad in law. In this regard, he had relied upon Neeta Sinha vs. P.S. Raj Steels Pvt. Ltd 2010(4) JCC (NI) 305.
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8. It is further contended that the impugned order is bad in law as returned memo is not certified as per the provision of section 65B of Indian Evidence Act and section 2A of Bankers' Books Evidence Act 1891. It is further submitted that photocopies have been exhibited which make the impugned order bad in law. In this regard, he had relied upon State Insurance Corporation vs. Kanti Moulding Machine & Anr.II (2007) DLT (Crl.)6.
9. It is further submitted that ld. Trial Court has not appreciated the fact that the verification of the affidavit is not consonance with the mandatory provision of section 297 Cr.PC which vitiate all the proceedings and make the impugned order illegal per se. In this regard, he had relied upon Santokh Singh Singh vs. State of Punjab 2003 Cr;L.J. 2925 and Shaukat Ali vs. State of Haryana 1996 Cr.L.J. 3685 and Shaukat Ali vs. State of Haryana 1996 Crl.L.J.3685 passed by Hon'ble Punjab and Haryana High Court.
10. It is further submitted that judicious process should not be an instrument of oppression or needless harassment and judicial discretion should be exercised in such a manner so that it may not become an instrument of oppression in the hands of private complainant as a vendetta to harass the innocent person. In this regard, he had relied upon: Punjab National Bank vs. Surender Prasad AIR 1992 SC 1815.
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11. It is further contended that the impugned order is illegal per se and not sustainable in the eyes of law and liable to be dismissed as no illegal enforceable debt or liability is standing against the petitioner as the loan agreement/guarantee agreement are void ab initio in the eyes of law as the said agreement is neither attested nor registered by the competent authority and in addition to it, the petitioner being guarantor cannot held liable for giving security cheque as guarantee. In this regard, he has relied upon Vinod Shivappa vs. Nanda Beledappa AIR 2008 SC 2279, Ram Krishna Cooperative Credit vs. Rajendra Bhagchand Wasma Cr. Application 898/2009 High Court of Bombay (Auragabad) and Ravi Kumar D. vs State of Delhi & Anr. Crl M.C No.4378/09 & Crl. M.a. No. 14989/09. Otherwise also the respondent/complainant has charged a rate of interest @ 33% per annum in violation of the Provision of Usurious Act and the cheque has not been issued by the petitioner, therefore, dishonoured cheque cannot be subject matter for criminal proceedings under section NI Act against the petitioner being a guarantor.
12. It is further contended that complaint has been filed under section 141 of the NI Act whereas the present complaint has been filed by the complainant but this contention is also falacious. In view of the fact that the head note of the complaint bears only section 138 of the NI Act and section 141 is not mentioned in the head note. Therefore, this contention is wholly erroneous and is hereby rejected.
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13. Counsel for the respondent/complainant has contended that impugned order is speaking one, otherwise, by issuing process under section 204 IPC, the Magistrate is concerned with the allegation made in the complaint and evidence led by the complainant and the Magistrate has simply to be satisfied if prima facie case, has been made out and there are sufficient ground for proceeding against the accused persons and to Magistrate is empowered to summon the said accused persons. In this regard, he had relied upon: Nagawwa vs. Veeranna AIR 1976 SC 1947, Jagdish Ram vs. State of Rajasthan 2004 SCC (Cri 1294), Bhushan Kumar and Anr vs State (NCT) and Anr. (2012) 5 SCC 424, Woods and Ors vs. State and Anr. 121(2005) DLT 314 and Riyasat Ali vs State of UP 1992 Cri L.J. 1251.
14. It is further contended that there was no need to comply with provision under section 202 Cr.PC in case under section 138 NI Act. The complaint is based on documentary evidence and the evidence on affidavit of the complainant and bankers slip are sufficient documentary evidence for Ld. Trial Court to take cognizance and summon the accused, otherwise also, non compliance of proviso of section 202 Cr.PC is not a sina qua non for each and every case and in case the commission of offence is made out from documentary evidence, the provision of section 202 Cr.PC can be dispensed with. In this regard he had relied upon : Abhishek Aggrawala vs. Boortmalt NV and Anr. 2011 (1) JCC 614.
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15. It is further contended that the issuance of slip or memo alongwith dishonoured cheque denoting that the cheque has been dishonoured is not required mandatorly. In this regard, he had relied upon : Intech Net Limited and Ors. Vs State and Anr.2007 Cri L.J 216.
16. It is further contended that objection of the petitioner/accused regarding the documents are photocopy and AR not being of the author of said documents and not have exhibited and proved those documents, the said application regarding this allegation was made but later on dismissed as withdrawn by the petitioner from the Trial Court so this argument does not lie in his mouth that the photocopy of the documents in the complaints are inadmissible per se, otherwise, also there is no intention to doubt the transaction in any manner and the petitioner has admitted in his notice under section 251 Cr.PC that he has tendered in his cheque as a guarantor of his father Bhupinder Singh Sawhney. In this regard, he had relied upon E Satyanarayana Reddy vs. Ch. Muralidhar Reddy 2010(6) ALT 254.
17. It is further contended that there was no violation of 297 Cr.PC so far affidavit annexed with the complaint are concerned as said affidavit is not a link evidence as the person who has filed the said affidavit has been examined. There is no violation of section 297 Cr.PC. Otherwise, it is settled law that verification clause is improper. It could even be permitted by the modification/insertion of verification clause. In this regard, he had relied upon: Pushp CR No.17/13 -:8:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 Holdings Ltds vs. State of Maharashtra MANU/MH/1450/2008 and Indra Kumar Patodia vs. Reliance Industries Ltd 2012(11) SCALE
271.
18. It is further contended that objection of the petitioner regarding loan agreement and guarantee agreement as being void ab initio in the eyes of law but section 51 of the Companies Ordinance, 1984 provided authentication of documents and proceedings can be done by the Chief Executive/Director/Secretary/other authorised officials of the company.
19. It is further contended that the provision of Usurious Act are not applicable to the facts of the present case as the cheque amount which has been advanced by the respondent/complainant to the father of the petitioner is subject matter of the complaint.
20. It is further contended that the cheque in question was issued by the petitioner in terms of loan agreement and by way of guarantee agreement and the son of petitioner has undertaken to stood as a guarantee of the petitioner and also issued a cheque and the debtor as well as guarantor is liable for proceedings under section 138 NI Act. In this regard, he had relied upon Sumat Pershad and Sons vs. Headstart Advertising and Marketing Pvt. Ltd. And Ors (2007) II BC 443, Constellation Enterprises Pvt. Ltd. And Anr. vs. PEC Limited 2006(1) JCC (NI) 59 and Saheb Singh vs. State (NCT of Delhi CR No.17/13 -:9:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 2008(3) AD (Delhi) 28 and Sandeep Aggarwal vs. Far East Marketing
(p) Limited 2007(10) AD (Delhi 1371).
21. It is further contended that for a single loan, two complaints are maintainable under section 138 NI Act as in clause III of the loan agreement as well as of the clause III of the guarantee agreement the liability of the borrower and guarantor is joint and several and petitioner is liable for proceedings under section 138 NI Act. In this regard, he had relied upon: I.C.D.S.Ltd vs Beena Shabeer and Anr. AIR 2002 SC 3014.
22. I have heard counsel for the parties and gone through the record including the case law relied upon by counsel for the parties during the course of arguments.
23. First contention of the counsel for the petition is that Ld. Trial Court has failed to pass the reasoned order of summoning the accused and the summoning order is bad in law. But the said contention appears to be attractive but the same is falacious and is hereby rejected in as much as it is settled law that summoning order under section 204 Cr.PC requires no explicit reasons to be stated. It is imperative that Magistrate must take notice of accusation and apply his mind to allegations made in complaint/police report alongwith materials filed therewith and it is further mandate of law that Magistrate is to form an opinion whether there exists a specific ground for summoning the accused and it is nowhere mention in CR No.17/13 -:10:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 section 204 Cr.PC that explicit narration/reasons of the same is mandatory. Therefore the impugned order cannot be faulted with only on the ground that summoning order was not a reasoned one. In this regard, I take support from case law relied upon by the counsel for the parties.
24. Now coming to the next contention of the counsel for the petitioner that the summoning order is bad in law as the petitioner is residing outside the territorial jurisidiction of the trial court and as per mandate of 202 Cr.PC, an enquiry should have been got conducted by the Ld. Trial Court before summoning the petitioner but the said contention also appears to be attractive but the same is falacious and is hereby rejected, as the compliance of proviso of section 202 Cr.PC is not mandatory and trial would not stand vitiated unless some prejudice has been shown to have cause to the accused/petitioner. Otherwise also, it is settled law that in case documentary evidence is produced by complainant before court and from documents, it was, prima facie, clear that commission of offence as detailed in the complaint is made out, no further enquiry should have been held by Ld. Magistrate apart from inquiry held by way of examining of witnesses of complainant and documents and enquiry or investigation under 202 Cr.PC has to be done in cases which are based on oral evidence and accused lives beyond territorial jurisdiction of the court. In the present case, the complaint has been filed on the basis of documents and Ld. Magistrate took cognizance after recording pre cognizance evidence. Therefore, I am of the CR No.17/13 -:11:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 opinion that there was no need to hold an enquiry in terms of section 202 Cr.PC. In this regard, I found support from Abhishek Agrawal (supra).
25. Now coming to the next contention of the counsel for the petitioner that the summoning order is bad in law as return memo is not as per the mandate of provision of section 146 NI Act. But the contention is also liable to be rejected on the ground that once the accused admitted the issuance of cheque, the person to whom the cheque is handed over become hold in due course of the said cheque by virtue of section 9 of the NI Act. Therefore, I am of the opinion that bank is not supposed to issue a slip or memo having thereof the official work denoting that cheque has been dishonoured. In this regard, I found support from Intech Net Limited (supra).
26. Next contention of the counsel for the petitioner is that photocopy of the documents have been annexed with the complaint and exhibited and it is settled law that photocopy being secondary evidence cannot be exhibited and such evidence is inadmissible in law. In the present case, the transaction appears not to be a false one. Otherwise also, most of the documents have been exhibited after original being seen and returned and it is brought to the notice of this court that an application has been moved by the petitioner challenging the said documents annexed with the complaint on the ground that those documents are xerox copy, being secondary evidence, but the said application has been withdrawn by the CR No.17/13 -:12:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 counsel for the petitioner. In view of the fact that challenge by way of an application to the xerox copy of the documents as allegedly annexed with the complaint has been withdrawn so this ground of challenging the summoning order appears to be falacious and is hereby rejected, otherwise also, it may be noted that the admissibility of the documents whether secondary or primary is to be decided at the final stage of the trial and it is beyond the scope of the present petition.
27. Now coming to the next contention of the counsel for the petitioner that the documents annexed with the complaint as well as pre summoning evidence is defective so far as the verification is concerned as mandatory provision of section 297 Cr.PC has not been complied with while drafting and tendering the same in the court. No doubt in the case of Santokh Singh Singh and Shaukiat Ali, it has been held that the defective verification of the affidavits and non compliance of provision of section 297 Cr.PC vitiated the trial and said affidavits were stand excluded from the evidence but in the said judgments, it has been observed that the deponent of the said affidavit did not appear as witness and did not offer themselves for cross examination, so it was mandated that verification of such affidavits should have been in proper format. But in the present case, the complainant and the other CWs in complaint has appeared as a witness and they further may be cross examined during the trial so the ratio of Santokh Singh and Shaukat Ali is not applicable in the present case, otherwise also, it may be noted here that even if the said CR No.17/13 -:13:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 verification of the affidavits is found to be defective or improper. A verification clause may be allowed to be inserted by the trial court in view of Pushp Holdings Ltd (supra). Otherwise also as per mandate of NI Act, the complaint need to be meant in writing to attract the provision of 138 NI Act and at the time of taking cognizance, the Ld. Magistrate will examine the complainant on oath and verification statement will be signed by the complainant. Therefore the plea that affidavit is defective as verification clause is not as per law is baseless. In this regard, I found support from Indra Kumar (supra).
28. Now coming to the next contention of the counsel for the petitioner that the loan agreement and guarantee agreement filed by the complainant is void ab initio being in violation of the companies law. The said plea also appears to be attractive and the same is falacious and deserves to be rejected as section 51 of the Companies Ordinance, 1984 provides that the document or proceeding require in authentication by the company may be signed by the Chief Executive/Director/Secretary/other officers persons and complaint has been filed by the duly authorised persons as per resolution has been placed on record in the judicial file of the Ld. Trial Court. Otherwise this plea is a question of trial to be adjudicated upon at the conclusion of trial.
29. Now coming to the next contention that the complainant has charged 33% interest in violation of the Usurious Act, the said contention is also falacious and deserves to be dismissed in as much CR No.17/13 -:14:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 as the present cheque has been not for recovery of the principle amount including interest but the same pertains to the amount for which the accused/petitioner stood as a guarantor and issued a cheque in discharge of his liability, therefore, the consideration of the provision of Usurious Act is beyond the scope of NI Act as well as of this petition otherwise the said plea may be taken during the course of trial.
30. Now coming to the next contention that the cheque in question has not been issued for any debt or liability payable by the accused to the complainant/respondent. But this contention is also falacious and is hereby rejected in as much as clause 4 of the loan agreement, it is detailed that a loan has been availed of by the petitioner and the son of petitioner stood as a guarantor and the debtor failed to pay the amount and the cheque filed by the guarantor as well as the petitioner being debtor stand dishonoured and there is averment in the complaint that the son of petitioner stood as a guarantor for the loan advanced by the complainant/respondent to the petitioner.
31. It may also be relevant to note that the cheque in question was issued for discharge of liability or not. It is a matter of trial and the question whether the cheque has been given by the security or otherwise is a question of trial which requires evidence and said question cannot decided at this stage. In this regard, I found support from Sumat Pershad, Consellation Enterprises, Sandeep CR No.17/13 -:15:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 Aggarwal and Saheb Singh (supra). In Sumat Pershad, the Hon'ble High Court of Delhi in para 5 has observed as under:
5. Considering the arguments advanced by the Ld. Counsel for the parties and after examining the impugned order in detail, I find that the same is liable to be sent aside on both counts raised by the learned counsel for the petitioner. Firstly, in view of the decision of the Supreme Court in Adalat Prasad (supra) no order recalling the summoning order could have been passed. Secondly, once the cheque had been issued fand the same had been presented and upon its dishonour the procedure prescribed for issuance of notice had been followed, the presumption under section 139 was immediately raised. The Supreme Court has repeatedly stated that in law such a presumption has to be raised by the courts considering such matters. Reference may be made to the decision in the case of Hiten P.Dalal v. Bratindranath banerjee.
MANU/SC/0359/2001: 2001 CriLJ 4647, Maruti Udyog Ltd. v. Narender and Ors.
MANU/SC/0803/1999: (1999)1SCC113, MMTC Ltd. v. Medchl. Chemicals and Pharma (P) Ltd.
CR No.17/13 -:16:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 MANU/SC/0728/2001:2002CriLJ266 and Goa Plast (P) Ltd v. Chico Ursula D'Souza and Anr.
MANU/SC/0200/2003: 2003CriLJ1723. In the last mentioned case the Supreme Court clearly observed that it has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the buren of proof is on the person who wants to rebut the presumption. And, that can only be done in the course of trial. It is also a matter of evidence as to the manner and purpose for which the cheque was retained by the petitioner. The petitioner alleges that the cheque was retained by way of security for ongoing transactions and, that the respondents had given the authority to the petitioner to present the cheque in respect of the ongoing transactions. It is the case, on the other hand, of the respondents, that he cheque was not to be retained by the petitioner and was to be returned to the respondents which the petitioner did not do despite the repeated requests. These are the matters of evidence and cannot be dealt with at the summoning stage or at the stage of issuance of notice under section 251 Cr.PC.
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32. Otherwise also, security cheque given by guarantor has been held to be a subject matter of 138 NI Act as Hon'ble Supreme Court I.C.D.S Ltd vs. Beena Shabber and Anr. 2002(3) ACR 2519(SC) has observed:
"10. The language, however, has been rather specific as regards the intent of the legislature. The commencement of the Section stands with the words "Where any cheque". The above noted three words are of excrement 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 CR No.17/13 -:18:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 by the High Court, neither been dealt with or even referred to in the impugned judgment.
11. The issue as regards the coextensive liability of other guarantor and the principle 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 the lawmakers to the effect that where ever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability there cannot be any restriction or embargo in the matter of application of the provisions of section 138 of the Act" 'Any cheque' and 'other liability' are the two key expressions which stands as clarifying the legislative intent so as to bring the factual context within the ambit of the provisions of the Statute. Any contra interpretation would defeat the intent of the legislature. The High Court, it seems, got carried away by the issue of grantee and guarantor's liability and thus has overnooked the true intent and purport of section 138 of the Act. The judgments recorded in the order of the High Court do not have any CR No.17/13 -:19:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 relevance in the contextual facts and the same thus does not lend any assistance to the contentions raised by the respondents.
33. High Court of Punjab and Haryana in Shree Bhagwati Apparels India Ltd & Ors v. M/s Bibby Financial Services India Pvt. Ltd Crl. Misc. No. M31977/10 has observed as under:
The petitioners were granted domestic factoring facilities on 18.03.2011by the respondent to the tune of Rs. 2,00,00,000/ with the condition of maximum prepayment of 80%. The petitioner gave the cheques of security amounting to Rs. 2,00,00,000/ without date towards guarantee as guarantee of Liverpool Retial India Limited. On 09.06.2009, M/s Liverpool Retail India Limited was supplied goods and their invoices were discounted and M/s Liverpool Retail India Limited too issued the cheques for the said amount. The cheques were of different dates I.e 14.09.2009 to 16.12.2009. On 05.11.2009, the said cheques were dishonoured for insufficient funds. Thereafter, the respondent had no choice but to deposit the cheques given by the petitioners as guarantee. Their cheques were dishonoured. Hence, on 20.04.2010, the respondent filed the complaint against M/s Liverpool Retail India CR No.17/13 -:20:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 Ltd and its Directors. Thereafter the complainant deposited the cheques issued by the petitioner as guarantor of the said amount. The cheques issued by the petitioner were also dishonoured. Accordingly, the second complaint was filed on 28.07.2010 under Section 138 of the Negotiable Instruments Act against the petitioners.
Moreover, as per the nature of the transaction between the parties, the Borrower who in the present case, happens to be the petitioner No.1 makes itself liable for rendering all outstanding amounts to the Factor I.e the respondent in the event of the purchaser of goods I.e M/s Liverpool Retail India Limited defaulting in making payment.
In view of the above, it cannot be said, at this stage, that the cheques were towards security. The said fact being disputed and debatable, it is a matter to be decided in trial.,,,,
34. Therefore the security cheque issued by the petitioner was prima facie issued for security for a preexisting liability and in view of the judgment passed in ICDS, proceedings under section 138 can be initiated for the amount of cheque issued by the debtor and guarantor and even if issued for purpose of security and whether the CR No.17/13 -:21:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 cheque is issued for security or otherwise is also a question of trial and even cannot be adjudicated upon in proceeding under section 482 Cr.PC. Therefore this contention is also hereby rejected.
35. Now coming to the last contention of the counsel for the petitioner that two cheques have been issued for one transaction by the debtor and the another security cheque given by the petitioner as guarantor so the question arises whether two complaints under section 138 NI Act can be proceeded against one loan. So far as the case law relied upon by the counsel for the petitioner in Ravi Kumar (supra), it has been held in this case that the security cheque cannot be presented for encashment and in para 9, it has been observed as under:
9. Plan reading of the above provision of law shows that criminal liability under section 138 NI Act is attracted only if the dishonoured cheque was issued for the discharge in whole or in part of any existing debt or liability. The section does not apply to a cheque issued to meet future liability which may arise on happening of some contingency. Thus, it is clear that a post dated cheque, if issued for discharge of a debt due, in the event of dishonour, would attract section 138 of the Ni Act but a cheque issued not for an existing CR No.17/13 -:22:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 debt/liability but issued by way of security for meeting some future contingency would not attract section 138 of the NI Act.
But the cheque in question issued by the petitioner for preexisting liability being principal debtor, therefore, the facts of Ravi Kumar case is distinguishable to the fact of he present case and facts of Collage (supra) as applicable to the fact of the present case.
36. Otherwise also, in the present case, the cheque has not been presented for future liability which may arise on happening of some contingency in future and it has been observed in Krish International P.Ltd & Ors vs. Manu/DE/0302/2013 by the Hon'ble High Court of Delhi after relying upon Shree Bhagwati Apparels (supra) in para 8 which is reproduced hereunder:
8. There is no dispute about the proposition of law as laid down in M/s. Collage Culture that a cheque issued not for an existing due but issued by way of security would not attract the provisions of section 138 of the Act. In M/s Collage Culture the Ld. Single Judge of this Court (Pradeep Nandrajog, J.) drew distinction between a cheque issued for a debt in present but payable in future and second for a debt which may become payable in future upon the occurrence of a contingent event. Para 20 to 24 of the CR No.17/13 -:23:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 report in M/s. Collage Culture are extracted hereunder:
20. A post dated cheque may be issued under two circumstances. Under circumstance one, it may be issued for a debt in present but payable in future.
Under second circumstance it may be issued for a debt which may become paybale in future upon the occurrence of a contingent event.
21. The difference in the two kinds of postdated cheques would be that the cheque issued under first circumstance would be for a debt due, only payment being postponed. The latter cheque would be by way of a security.
22. The word 'due means 'outstanding at the relevant date'. The debt has to be in existence as a crystallized demand akin to a liquidated damages and not a demand which may or may not come into existence; coming into existence being contingent upon the happening of an event.
37. Therefore, it cannot be said that the cheque in question has been issued by the petitioner for meeting any future liability which may happen on some contingency. So therefore in view of the CR No.17/13 -:24:- 21.03.2013 Bhupinder Singh Sawhney vs M/s S.E.Investment Ltd CR No. 17/13 case law Collage Culture & Ors (supra) it can be safely held that the cheque in question was issued by way of security for preexisting debt and in view of the law laid down in Shree Bhagwati Apparels India Ltd & Ors (supra) and Krish (supra), the two cheques one issued by petitioner and another cheque has been issued by guarantor can be subject matter of the proceedings under section 138 NI Act.
38. From the above discussion, I am of the opinion that counsel for the petitioners has failed to point out any illegality in the impugned order. So this petition is devoid of merits and is hereby dismissed.
39. Needless to say that nothing stated herein shall tantamount to an expression of my opinion on the merits of the case.
40. TCR and copy of the order be sent to the Ld. Trial Court for information and compliance.
41. File be consigned to record room.
Announced in the open court (Vijay Kumar Dahiya)
on the 21st Day of March 2013 ASJ/ Dwarka Courts
New Delhi
CR No.17/13 -:25:- 21.03.2013