{"id":260010,"date":"2022-01-14T10:00:00","date_gmt":"2022-01-14T04:30:00","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=260010"},"modified":"2022-01-21T10:28:23","modified_gmt":"2022-01-21T04:58:23","slug":"dishonour-of-cheque-occurring-when-parties-entered-in-an-illegal-and-void-agreement","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/01\/14\/dishonour-of-cheque-occurring-when-parties-entered-in-an-illegal-and-void-agreement\/","title":{"rendered":"Dishonour of Cheque occurring when parties entered in an illegal and void agreement: Can Court still take cognizance in S. 138 NI Act complaint? Dwarka Court decides"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>Dwarka Court, New Delhi: <\/strong>Shipra Dhankar, MM (NI Act) on noting that the dishonour of cheque occurred in consequence of an illegal and void agreement, dismissed the complaint under Section 138 of the Negotiable Instrument Act, 1881.<\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #008000;\"><strong>What are we dealing with in the present matter?<\/strong><\/span><\/p>\n<p style=\"text-align: justify;\">The Complainant was approached by the accused with the proposal that, in return for a commission\/liaison fee, the accused can obtain in the complainant\u2019s favour a tender issued by the NTPC where the accused enjoys \u201cgood links\u201d with the higher authorities.<\/p>\n<p style=\"text-align: justify;\">Thereafter, the complainant, after having applied for the said tender and paid the amount demanded from him, received from the accused a tender award letter, however, the said letter was later found to be forged.<\/p>\n<p style=\"text-align: justify;\">In view of the above incident, the complainant demanded his money back from the accused, pursuant to which certain cheques were drawn in his favour out of which one got dishonoured.<\/p>\n<p style=\"text-align: justify;\">Complainant approached the Court due to the dishonour of the above-said one cheque.<\/p>\n<h4 style=\"text-align: justify;\"><span style=\"color: #008000;\">Analysis, Law and Decision<\/span><\/h4>\n<p style=\"text-align: justify;\">Section 138 NI Act clarifies that \u201cdebt or other liability\u201d means a legally enforceable debt or other liability. The said legal position was fortified by the decision of Delhi High Court in <em>Virender Singh v. Laxmi Narain, <\/em><a href=\"http:\/\/www.scconline.com\/DocumentLink\/547clm26\">2006 SCC OnLine Del 1328<\/a> wherein it was found that if the consideration or object of an agreement is unlawful, illegal or against the public policy, the agreement itself is void and legally unenforceable, as a result of this, any cheque issued in discharge of a liability under such a void agreement, cannot be said to be issued in discharge of a legally enforceable debt o liability.<\/p>\n<p style=\"text-align: justify;\">The Bench also relied on Section 23 of the Indian Contract Act to see whether the agreement entered into by both the parties was for a lawful consideration\/object or not.<\/p>\n<p style=\"text-align: justify;\">Court on noting the fact that the sole purpose of the agreement was to obtain a tender in favour of the complainant, not on the basis of its intrinsic merit, but on the basis of \u201cgood links\u201d of the accused with the NTPC higher authorities. Such agreements are expressly rendered void and of no legal consequence by virtue of Section 23 of the Indian Contract Act.<\/p>\n<p style=\"text-align: justify;\">Hence the agreement was illegal and void.<\/p>\n<p style=\"text-align: justify;\">In the present matter, presumption stood rebutted by the Complainant\u2019s own version. The complainant\u2019s own depiction of the transaction disclosed that the same was legally unenforceable and void.<\/p>\n<p style=\"text-align: justify;\">Lastly, the Court referred to the maxim <em>\u201cin pari delicito portior est conditio defendantis\u201d<\/em>, which embodies the principle: <em>\u201cthe Courts will refuse to enforce an illegal agreement at the instance of a person who is himself a party to a illegality or fraud\u201d.<\/em><\/p>\n<p style=\"text-align: justify;\">In light of the above discussion, the cognizance in the present complaint was declined and the complaint was dismissed. [Virender Dahiya v. Keshav Kumar, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/JO1WxXT7\">CC No. 11747 of 2021<\/a>, decided on 10-1-2022]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dwarka Court, New Delhi: Shipra Dhankar, MM (NI Act) on noting that the dishonour of cheque occurred in consequence of an illegal <\/p>\n","protected":false},"author":8808,"featured_media":216245,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,4721],"tags":[3029,9292,48348,29785,42834,3301,17041,33580,48349],"class_list":["post-260010","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-district-court","tag-cheque_bounce","tag-contract-act","tag-illegal-agreement","tag-law","tag-legal-news","tag-liability","tag-negotiable-instruments-act","tag-section-139-ni-act","tag-void-agreement"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.4 (Yoast SEO v26.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Dishonour of Cheque occurring when parties entered in an illegal and void agreement: Can Court still take cognizance in S. 138 NI Act complaint? 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Dwarka Courts answers","author":"Bhumika Indulia","date":"May 13, 2022","format":false,"excerpt":"Dwarka Courts, Delhi: Rahul Jain, Metropolitan Magistrate, while addressing a matter regarding dishonour of cheque, held that mere assertion of non-receipt of legal notice cannot help the accused in escaping liability under Section 138 Negotiable Instruments Act, 1881. It was alleged in complaint that accused had approached the complainant to\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":316446,"url":"https:\/\/www.scconline.com\/blog\/post\/2024\/03\/08\/delhi-court-acquits-accused-under-section-138-negotiable-instruments-act-failure-establish-debt-adjustment-legal-news\/","url_meta":{"origin":260010,"position":1},"title":"Delhi Court acquits accused under Section 138 NI Act on failure to establish debt adjustment","author":"Arunima","date":"March 8, 2024","format":false,"excerpt":"The complainant woefully failed to account for the amount of Rs 6,11,071\/- which was due on him towards the accused. Therefore, it cannot be said that the amount represented on the cheque in question was a legally recoverable debt.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"failure to establish debt adjustment","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2024\/03\/failure-to-establish-debt-adjustment.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":255796,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/10\/18\/dishonour-of-cheque-3\/","url_meta":{"origin":260010,"position":2},"title":"Mere denial is useless, Presumption under S. 138 NI Act can be rebutted only by leading cogent evidence: Court holds accused guilty where &#8220;payment stopped by drawer&#8221;","author":"Bhumika Indulia","date":"October 18, 2021","format":false,"excerpt":"Saket Courts, New Delhi: Swati Gupta, Metropolitan Magistrate reiterated what is expected of an accused to rebut the statutory presumption against him in cases of cheque dishonour under Section 138 of the Negotiable Instruments Act, 1881. Brief facts Complainant and accused had entered into an agreement to sell the property\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Saket Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":255407,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/10\/10\/section-138-ni-act-once-settlement-has-been-entered-into-the-complainant-cannot-pursue-the-original-complaint-supreme-court\/","url_meta":{"origin":260010,"position":3},"title":"Section 138 NI Act| Once settlement has been entered into, the complainant cannot pursue the original complaint: Supreme Court","author":"Prachi Bhardwaj","date":"October 10, 2021","format":false,"excerpt":"The settlement agreement subsumes the original complaint.","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-2-7.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-2-7.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-2-7.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-2-7.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/02\/sc-2-7.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":268409,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/06\/15\/can-charges-under-s-138-of-ni-sustain-in-case-of-non-compliance-with-the-clauses-of-a-non-competing-agreement-tis-hazari-court-elucidates\/","url_meta":{"origin":260010,"position":4},"title":"Can charges under S. 138 of NI Act sustain in case of non-compliance with the clauses of a Non-competing Agreement? Tis Hazari Court elucidates","author":"Editor","date":"June 15, 2022","format":false,"excerpt":"Tis Hazari Court, Delhi: While deciding the instant complaint filed under S. 138 of Negotiable Instruments Act, 1881, wherein the dispute revolved around the non-compliance of the clauses of Non-Competing Agreement (NCA) executed between the parties to the dispute; the accused company was acquitted from the charges levied under S.\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/06\/MicrosoftTeams-image-255.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/06\/MicrosoftTeams-image-255.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/06\/MicrosoftTeams-image-255.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/06\/MicrosoftTeams-image-255.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2022\/06\/MicrosoftTeams-image-255.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":266987,"url":"https:\/\/www.scconline.com\/blog\/post\/2022\/05\/18\/a-blank-cheque-leaf-voluntarily-signed-and-handed-over-towards-some-payment-dishonour-of-cheque-section-138-ni-act\/","url_meta":{"origin":260010,"position":5},"title":"A blank cheque leaf voluntarily signed and handed over towards some payment: Would it attract presumption under S. 139 NI Act in absence of cogent evidence? Dwarka Courts explains","author":"Bhumika Indulia","date":"May 18, 2022","format":false,"excerpt":"Dwarka Courts, New Delhi: Deeksha Sethi, MM (NI Act)\u201406, reiterated that, even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, 1881. In the present matter, Raj Singh was referred to\u2026","rel":"","context":"In &quot;Case Briefs&quot;","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2019\/06\/Dwarka-Court.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/260010","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/8808"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=260010"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/260010\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/216245"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=260010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=260010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=260010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}