To prove that cheque amount was larger than debt due, can defence of Issuer be looked at stage of issuing summons? Del HC explains

Delhi High Court: While addressing a matter revolving around Section 138 of the Negotiable Instruments Act, 1881, Subramonium Prasad, J., held that Courts should primarily proceed on the averments in the complaint, and the defence of the accused cannot be looked at the stage of issuing summons unless it can be shown on admitted documents which the Supreme Court described as “unimpeachable in nature and sterling in quality” to substantiate that there was no debt due and payable by the person who has issued the cheque or that the cheque amount is large than the debt due.

Petitioner sought to call for record and quash complaint about the offence under Section 138 of the Negotiable Instruments Act, 1881.

Averments made in the complaint were:

Petitioner had approached the complainant/respondent and requested for a friendly loan of Rs 9,00,000, later after a few months he again approached for a loan of Rs 6,00,000 and in the said amount, Rs 4,90,000 was given through RTGS and Rs 1,10,000 was given in cash.

Further, while returning the amount, the petitioner issued a cheque, which was returned by the bank with the remark “Exceeds Arrangement”. Even after notice, the petitioner did not pay the amount, hence a complaint under Section 138 of the NI Act was registered.

Petitioner submitted that he had given instructions to his nephew who deposited a sum of Rs 2,69,000 through UP in the bank account of the wife of the complainant, hence the cheque of Rs 15,00,000 presented by the complainant was greater than the amount due, hence the complaint shall be quashed.

Analysis, Law and Decision

High Court expressed that the purpose of inserting Chapter XVII in the Negotiable Instruments Act, 1881 was to bring out sanctity in commercial transactions.

In the present matter, it was noted the petitioner had issued a cheque for a sum of Rs 15,00,000.

Section 139 of the Negotiable Instrument Act, 1881, creates a presumption that unless contrary is proved, the holder of a cheque has received the cheque for discharge in whole or in part of any debt or other liability.

The Supreme Court’s decision in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, was also cited.

Petitioner contended that the cheque deposited by the complainant was for a greater amount as a sum of Rs 2,69,000 had already been paid.

Further, it was stated that the details of the UPI (Unified Payment Interface), which has been filed by the petitioner, show that the amounts deposited in the bank account of the wife of the complainant by the nephew of the petitioner cannot be taken as evidence which is unimpeachable in nature and sterling in quality so as to demolish the case of the respondent and to substantiate the contention of the petitioner that the proceedings initiated under Section 138 of the Negotiable Instrument Act, 1881 is a complete abuse of the process of law.

The Bench stated that the Courts should primarily proceed on the averments in the complaint, and the defence of the accused cannot be looked at the stage of issuing summons unless it can be shown on admitted documents which the Supreme Court described as “unimpeachable in nature and sterling in quality”.

“It is well settled that the inherent powers should be exercised sparingly, with circumspection and in the rarest of rare cases when the Court is convinced, on the basis of material on record, that allowing the proceedings to continue would be an abuse of process of law or if the ends of justice is required that the proceedings ought not to be quashed.”

Hence, High Court denied accepting that the amounts deposited by the nephew of the petitioner in the bank account of the wife of the complainant was towards the debt incurred by the petitioner.

Therefore, no case for quashing the complaint was made out. [Satinderjeet Singh v. Sameer Sondhi, 2022 SCC OnLine Del 635, decided on 28-2-2022]


Advocates before the Court:

For the Petitioner: Deepak Kohli, Advocate

For the Respondent: None

Join the discussion

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.