Court Upholds Statutory Presumptions Under Negotiable Instruments Act, Declines to Intervene Using Inherent Powers
In a recent decision, the Jammu and Kashmir High Court, presided over by Justice Sanjay Parihar, has dismissed a petition seeking to quash complaint proceedings under Section 138 of the Negotiable Instruments Act, 1881. The case, titled Deepak Bawa Sharma v. Asif Iqbal, revolves around the alleged dishonor of a cheque amounting to Rs. 35,00,000, issued by petitioner Deepak Bawa Sharma. The cheque was purportedly given as a payment for a villa transaction in Sainik Colony, Jammu, which failed to materialize.
The petitioner contended that the cheque was issued merely as a security instrument and no enforceable debt or liability existed at the time of its presentation. However, the respondent, Asif Iqbal, had initiated proceedings under Section 138 after the cheque was dishonored, alleging it was issued in discharge of an existing liability.
Justice Parihar emphasized the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, which favor the holder of the cheque unless rebutted by the accused during trial. The Court noted that the question of whether a cheque was issued as security or in fulfillment of a debt is a matter of evidence, unsuitable for adjudication in proceedings under Section 482 of the Criminal Procedure Code (Cr.P.C).
The Court also clarified the limited scope of inherent powers under Section 482 Cr.P.C, highlighting that these powers should be exercised sparingly and only in cases where the continuation of proceedings amounts to an abuse of the legal process or if the complaint does not disclose any offense. In this case, the Court found that the complaint clearly outlined the elements of an offense under Section 138, and there was no evidence of mala fide intent on the part of the respondent.
Justice Parihar concluded that the petition lacked merit, advising the petitioner to present his defense before the Trial Court. The High Court's decision mandates the Trial Court to proceed with the complaint and resolve it expeditiously. Interim directions were also vacated, and any summoned records were ordered to be returned promptly.
Bottom Line:
Proceedings under Section 138 of the Negotiable Instruments Act, 1881 involve statutory presumptions in favor of the holder of the cheque, which can only be rebutted during the trial. The inherent powers under Section 482 Cr.P.C. are to be exercised sparingly and cannot be used to adjudicate disputed questions of fact or conduct a mini-trial.
Statutory provision(s): Sections 138, 118, 139 of the Negotiable Instruments Act, 1881; Section 482 of the Criminal Procedure Code, 1973.
Deepak Bawa Sharma v. Asif Iqbal, (Jammu And Kashmir) : Law Finder Doc id # 2856607
