U/s 138 niact
Ajit Pathak
(Querist) 30 October 2012
This query is : Resolved
Can u tell me some judgments wherein if a cheque, given as a security for performance guarantee, was encashed for the realization of outstanding liabilities (for the amount given as mobilization advances). And the cheque bounced and 138 complaint filed. How to protect the complainant company.??
Thank & Regards
Ajit Pathak
(Advocate)
ajay sethi
(Expert) 30 October 2012
complaint under section 138 Ni would not be maintanable if cheque given as security for performance of contract .
number of judgements on the issue .visit indian kanoon wbsite for judgements
Ajit Pathak
(Querist) 31 October 2012
Good Morning Ajay ji,
You are 100% true. I have suggested to my friend as asked by him. More of company generally take it as guarantee but it would be illegal and not fit for contract. I had suggested to him that u may file or contest only on the ground of liability as per 138.
Evn if u may send those one or two citation that would be appreciated.
So nice of u.
Thanks & Regards
Ajit Pathak
ajay sethi
(Expert) 31 October 2012
ase of M.S. Narayana Menon @ Mani v. State of Kerala and Anr. AIR 2006 SCC 3366, wherein, the Apex court has observed as under :-
"57. We in the facts and circumstances of this case need not go into the question as to whether even if the prosecution fails to prove that a large portion of the amount claimed to be a part of debt was not owing and due to the complainant by the accused and only because he has issued a cheque for a higher amount, he would be convicted if it is held that existence of debt in respect of large part of the said amount has not been proved. The Appellant clearly said that Crl. M.C. 1648 of 2011 Page 3 of 25 nothing is due and the cheque was issued by way of security. The said defence has been accepted as probable. If the defence is acceptable as probable the cheque therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act."
ajay sethi
(Expert) 31 October 2012
In another case of Sudhir Kumar Bhalla v. Jagdish Chand and Ors (2008) 7 SCC 137, the Apex court has observed as under :- "22. On examination of the above-stated findings of the learned Single Judge in the judgment impugned before us, we find that the learned Single Judge has not addressed himself on the legal question raised before him by the appellant that the criminal liability of the appellant under the provisions of Section 138 of the Act are attracted only on account of the dishonour of the cheques issued in discharge of liability or debt, but not on account of issuance of security cheques. The learned Single Judge has also not given cogent, satisfactory and convincing reasons for disbelieving and discarding the pre-charge evidence of the appellant corroborated by the evidence of the expert opinion in regard to the interpolation in and fabrication of the cheques by adding one more figure '0' to make Rs. 30,000/- to Rs. 3,00,000/- and similarly adding one more figure '0' to make Rs. 40,000/- to Rs. 4,00,000/-."
Ajit Pathak
(Querist) 31 October 2012
Thanks alot Ajay ji. I also tried through the indiankanoon.org but ur search is very good. I appreciate it.
Thanks 7 Regards
Ajit Pathak
