Crl. Misc. No. M – 3629 of 2010 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH -.- Crl. Misc. No. M – 3629 of 2010 (O&M) Date of decision:- 27.7.2010 Inder Pal Singh ... Petitioner Versus Pankaj Bhardwaj ... Respondent CORAM:- HON'BLE MR. JUSTICE GURDEV SINGH Present:- Mr. Lokesh Sinhal, Advocate, for the petitioner. Mr. P.R.Yadav, Advocate, for the respondent. Gurdev Singh, J (oral) The petitioner/accused – Inder Pal Singh has filed this petition under Section 482 of the Code of Criminal Procedure, invoking the inherent jurisdiction of this Court for quashing the complaint No. 656, dated 22.11.2007 (Annexure P-5); summoning order dated 22.11.2007 (Annexure P-6) and other consequential proceedings, including notice of accusation dated 11.8.2009 (Annexure P-7) The said complaint has been filed by Pankaj Bhardwaj – respondent/complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act'). He contended therein that he agreed to sell the land described in para No.1 of the complaint in favour of the accused for Rs.79,20,000/- vide agreement dated 19.7.2007 and at that time he paid a sum of Rs.5,00,000/- as token money. To discharge the duties and liabilities in accordance with the terms and conditions of the agreement, Crl. Misc. No. M – 3629 of 2010 (O&M) -2- the accused, being a partner of the firm issued a cheque bearing No. 634502 dated 24.8.2007 for a sum of Rs.74,20,000/- drawn at Vijay Bank, Branch Lajpat Nagar, Alwar, with assurance that the same would be honored on presentment to the banker. Accordingly, the cheque was presented to the banker of accused, but was dishonored on account of insufficient funds in his account. Legal notice was served upon the accused through registered post, but he failed to pay the amount of the cheque. After the preliminary evidence was produced by the complainant, the accused was summoned to stand his trial for the aforesaid offence, as sufficient grounds were found for proceeding against him. The accused has averred in the petition that after the agreement was so executed he came to know that the land in dispute was infact owned by one Shivji Maaharaj Alwar and not by the complainant and that he had no right to sell the same. Thereafter, he contacted the complainant to cancel the agreement and to refund the sum of Rs.5,00,000/- and to return the cheque so given by him as security towards balance sale consideration. He also served a legal notice upon the complainant to that effect. The complainant gave his reply to that notice in which he admitted that the cheque in question was given as security towards the balance sale consideration. When the cheque was issued as security, dishonoring thereof will not attract the provisions of Section 138 of the Act, and no such offence is made out against him. In reply to the petition, the factum of the agreement has been admitted by the complainant and he pleaded therein that all the facts were Crl. Misc. No. M – 3629 of 2010 (O&M) -3- known to the accused at the time of the execution of the agreement and as such he is bound by the terms thereof and the same has not been cancelled by the Court of competent jurisdiction. The cheque was presented after the expiry of the stipulated period as per the terms of the agreement and therefore on the ground of dishonoring thereof, the accused is to be tried for the offence under Section 138 of the Act. I have heard learned counsel for both the sides. It has been submitted by learned counsel for the accused that the cheque in question was issued as security and therefore, it cannot be said that on account of the bouncing thereof the accused committed any such offence under Section 138 of the Act. He also referred to the contents of the agreement, which has been admitted by the complainant and the copy of which has been annexed with the petition as Annexure P-1. According to him it is mentioned in that agreement itself that this cheque was issued as security. On the other hand, it has been submitted by learned counsel for the complainant that the petitioner himself is coming up with the plea that the agreement is illegal and void and as such he cannot make use of the terms and conditions thereof. It is a question of evidence as to whether the cheque was issued as security and it being a disputed question of fact cannot be decided in this petition. No doubt the accused in this petition has alleged that the agreement is illegal and void, but at the same time he has taken specific plea that this agreement was so executed in his favour by the complainant and Crl. Misc. No. M – 3629 of 2010 (O&M) -4- that fact has been admitted in so many words by the complainant in his reply. Therefore, the contents of the agreement can be looked into for deciding whether the cheque in question was issued as the security or not. It is very much clear from the contents of the agreement itself that the cheque, though was post dated, was issued as security for the balance sale consideration. It was given by the accused on the date of the execution of the agreement itself. To make out offence under Section 138 of the Act, it was incumbent on the complainant to prove that the cheque was issued in discharge of legally enforceable debt or liability. When the cheque was issued on the day of the agreement itself, it cannot be said that it was issued in discharge of previous debt or liability. One of the necessary ingredient for constituting the offence under Section 138 is not made out. In the result, the petition is accepted. The complaint (Annexure P-5), summoning order (Annexure P-6) and all the subsequent proceedings are ordered to be quashed. The petition is disposed of accordingly. August 27, 2010 (Gurdev Singh) tripti Judge