Security Cheques Can Be Used to Discharge Legally Enforceable Liabilities, Rules Court
In a significant judgment, the Punjab and Haryana High Court has upheld the order of a Judicial Magistrate First Class, Ludhiana, summoning the petitioners in a case involving the dishonour of cheques under Section 138 of the Negotiable Instruments Act, 1881. The petitioners, Aarti Trehan and another, had sought the quashing of the criminal complaint filed against them by M/s Super Oils, arguing that the cheques in question were issued as security and not towards a legally enforceable debt.
The court, presided by Justice Manisha Batra, dismissed the petition, reiterating the principle that security cheques, integral to commercial transactions, can be used to discharge legally enforceable liabilities. The court emphasized the presumption under Section 139 of the Negotiable Instruments Act, which assumes the cheque was issued to discharge a debt unless rebutted during trial.
The petitioners contended that the cheques were issued as security and that the last consignment from the respondent was defective, negating any legally enforceable liability. However, the court maintained that such contentions are factual matters to be determined during the trial, not at the stage of quashing proceedings.
Justice Batra highlighted the cautious and sparing use of inherent powers under Section 482 of the Criminal Procedure Code, emphasizing that these powers should not interfere with the Magistrate's order when a prima facie case exists. The court underscored that disputed facts and evidence should be adjudicated during the trial, not in pre-trial proceedings.
The decision reaffirms the legal stance that a cheque, even if issued as security, can trigger proceedings under Section 138 if dishonoured, aligning with the Supreme Court's observations in similar cases. The ruling serves as a reminder of the legal obligations associated with cheque issuance and the rigorous scrutiny such cases undergo in courts.
Bottom Line:
Section 482 Cr.P.C. - Quashing of criminal complaint under Section 138 of Negotiable Instruments Act - Security cheques cannot be shielded against legally enforceable liability - Presumption under Section 139 of NI Act regarding cheques issued to discharge debt unless rebutted during trial - Exercise of powers under Section 482 Cr.P.C. must be cautious and not interfere with Magistrate's order summoning accused when prima facie case exists.
Statutory provision(s): Section 482 of the Code of Criminal Procedure, 1973; Section 138 and Section 139 of the Negotiable Instruments Act, 1881
Aarti Trehan v. M/s Super Oils, (Punjab And Haryana) : Law Finder Doc id # 2847549
