Source: https://www.azaadandcompany.com/judgement/sangeeta_batra_vs_ms_vnd_foods_ors
Timestamp: 2019-04-21 02:37:17+00:00

Document:
Advocates for R-1 & 2.
1. The present appeal is directed against the common judgment dated 10.07.2014 passed by the learned Metropolitan Magistrate (NI Act)-041 Tis Hazari Courts, New Delhi in CC No. 76/10, whereby the complaint preferred by the appellant under Section 138 of the Negotiable Instruments Act (the NI Act), was rejected, and the respondents/accused were acquitted.
i) Monthly rent for the period 1st July, 2008 to 30th September, 2008 shall be Nil.
The tenancy, however, got terminated in January, 2010.
CC No. Complainant Cheque dated Cheque No.
4. However, the restaurant never commenced business as the necessary permissions for the installation of the lift and other alterations were not procured within time, though the accused remained in occupation of the aforesaid property. Subsequently, the aforesaid property was booked and sealed by the MCD for unauthorized construction/ excess coverage in violation of bye-laws. On 13.04.2009, a portion of the basement and third floor were sealed, and the rest of the property was sealed on 12.09.2009.
v) The final defence is that the cheques were issued not in discharge of a subsisting liability but as advance/security cheques.
6. He returned findings on the first three issues aforesaid in favour of the appellants/complainants. It was held that the complaint had been filed by the competent authority and that lease agreements were not void ab initio as they were not agreements forbidden by law or against public policy. It was also held that there was no misrepresentation or concealment of material information by the lessor. After holding that the lease agreement entered into were valid and were neither void nor voidable, the learned MM proceeded to consider whether the contract subsequently became void on account of sealing of the premises by the MCD.
7. In this context, the learned MM considered the issue whether the agreement got frustrated on account of sealing and inability of the respondent/accused/lessees to use the leased premises, thereby discharging the respondent/accused of their liability to pay rent. On this issue as well, the learned MM returned a finding in favour of the appellant/complainant holding that the doctrine of frustration would not absolve the parties from complying with the terms of the contract. The contract contained in the lease agreement could not be said to have been frustrated on account of supervening third party conduct, and that the parties were under an obligation to perform their part of the contract. Finally, the learned MM considered the issue whether the cheques in question had been issued, not in discharge of a subsisting liability, but as advance/security cheques.
“13. The explanation appended to Section 138 explains the meaning of the expression „debt or other liability‟ for the purpose of Section 138. This expression means a legally enforceable debt or other liability. Section 138 treats dishonoured cheque as an offence, if the cheque has been issued in discharge of any debt or other liability. The explanation leaves no manner of doubt that to attract an offence under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. In other words, drawal of the cheque in discharge of existing or past adjudicated liability is sine qua non for bringing an offence under Section 138. If a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise, and material or goods for which purchase order was placed is not supplied, in our considered view, the cheque cannot be held to have been drawn for an existing debt or liability. The payment by cheque in the nature of advance payment indicates that at the time of drawal of cheque, there was no existing liability…”.
9. The learned MM held that, since the cheques in question had been received by the complainants in advance at the time of execution of the lease deeds and the property could not be used for the intended purpose, the dishonour of the cheques in question would not entail an action under Section 138 of the NI Act.
10. Learned counsel for the appellant submits that the impugned judgment is misdirected in law and it is based on erroneous view of law. He submits that the impugned judgment has resulted in grave miscarriage of justice. While the learned MM has returned findings of fact in favour of the appellant/complainant on all the issues, only on account of the fact that the cheques in question had been issued in advance towards payment of rent and the liability for payment of rent arise month to month, the learned MM has concluded that the dishonour of the cheque in question could not be the basis of a complaint under Section 138 of the NI Act. For reaching this conclusion, the learned MM has placed reliance on the judgment of the Supreme Court in Indus Airways (supra). Learned counsel submits that this is on account of a superficial reading of the said judgment, and its misapplication to the facts of the present case.
11. Learned counsel submits that the learned MM has failed to appreciate that there was no question of suspending the obligation to make payment of rent on account of the sealing of the leased premises, as the respondents had the option to surrender the lease. So long as the lease was not surrendered, merely on account of the sealing of the leased premises, the obligation to pay rent did not get suspended or ceased. Whether, or not, the respondents were able to use the premises for the intended purpose, namely, to set up a restaurant, was not relevant or material. Learned counsel submits that when the premises was let out by the appellant along with the other four sisters, there was no notice by the Municipal Corporation pending.
12. Learned counsel submits that the building was booked vide letter dated 17.10.2008, whereas the premises had been leased to the respondent on 18.07.2008. Learned counsel submits that the building was not sealed for want of completion certificate and that the said sealing had taken place on account of unauthorized construction. It was booked on 17.10.2008 for excess coverage of basement, ground floor, first floor and additional second floor. It was again booked on 20.06.2009 for unauthorized construction of basement, ground floor, first floor, second floor and third floor. Learned counsel has referred to the testimony of DW-1, Sh. S.K. Gupta, A.E. (Building), SDMC, West Zone, New Delhi and in particular to his cross examination recorded on 20.02.2013 in this regard.
“f) The Lessee shall not make or permit to be made any structural addition on the roof except the lift room and a temporary shed for generator set approx. measuring 10ft. × 12ft. In case any liability like property tax, penalties, duties, fines etc is imposed by the Municipal Corporation of Delhi, Delhi Development Authority or any other concerned Department/ Authority on account of the Lessee‟s use of the roof, the Lessee shall be liable for the same.
i) The Lessee shall not make or permit to be made any structural addition or alteration in the Demised Premises except the addition and installation of lift in the front side of the building as shown bounded red in the site plan annexed as Annexure „B‟, installation of fire security system and exit gate on the back side of the building at his own costs and risks. The Lessee shall not remove the lift, fire security system and gate of back side at the time of handing over the vacant and peaceful possession of the Demises Premises. The Lessee shall not be entitled for any compensation for the same/ any other improvements at the time of vacation.
14. Learned counsel submits that the respondent/accused undertook unauthorized construction of the third floor between the first booking-which took place on 17.10.2008, and the second booking-which took place on 20.06.2009, when the premises was already leased out to the respondents. Learned counsel submits that DW-1 S.K.Gupta admitted that as per Master Plan 2021, the property in question, which is on Najafgarh Road is permitted for commercial use and can be used commercially for running a restaurant. He also admitted that the complainant had paid the conversion charges vide receipts dated 19.06.2008 and 30.06.2008.
15. Learned counsel submits that, in any event, the respondents by opting to hold on to the lease premises even after its sealing, and not surrendering the lease, incurred the liability to pay the rent.
17. Learned counsel submits that sealing took place on account of unauthorized construction on all the floors including basement, ground and first floor as stated by DW-1. The booking first took place on 17.10.2008 for excess coverage at basement, ground, first floor and addition to second floor. It is submitted that on account of the said illegalities committed by the appellant and the other co-owners, the premises came to be sealed and the respondent could not put the premises to use and, therefore, there was no obligation to make payment of rent for the period that the premises remained sealed.
18. Learned counsel further submits the appellant and the other co-owners did not choose to terminate the lease after the premises was sealed and the cheques were being dishonoured. This shows that there was no breach of the terms and conditions on the part of the respondent.
19. Learned counsel for the respondent has sought to place reliance on the judgment of the Supreme Court in M.S. Narayana Menon @ Mavi Vs. State of Kerala & Another, (2006) 6 SCC 39.
21. Mr. Wadhwa has also placed reliance on the judgment of this Court in Virender Singh v. Laxmi Narain & Anr., 135 (2006) DLT 273, wherein this Court invoked the maxim “Pari delicto portior est conditio possidentis”, i.e. the Courts will refuse to enforce an illegal agreement at the instance of a person who himself is a party to the illegality or fraud. This submission is made in furtherance of the submission that the lease agreements were void and contrary to the law inasmuch, as, they had been entered into to perpetuate an illegality, i.e. of putting the premises in question to use contrary to the building bye-laws.
22. Reliance is also placed on the judgment in Shreyas Agro Services Pvt. Ltd. v. Chandrakumar S.B., 2006 Crl LJ 3140 – a Division Bench decision of the Karnataka High Court. The Karnataka High Court had taken a view in this case that the words “for discharge of any debt or other liability” in Section 138 of NI Act should be interpreted to mean current, existing or past ascertained liability, and that a cheque issued in respect of a future liability not in existence as on the date of cheque would not attract prosecution under Section 138 of the NI Act. Learned counsel also relies on Indus Airways (supra) for this proposition.
23. In his rejoinder, learned counsel for the appellant has referred to the reply dated 23.05.2009 (Ex.DW-2/C3) sent by the respondents to the appellants letter dated 05.05.2009. In this reply, the respondents, inter alia, stated that “We have all the intentions to clear the cheques, which have got dishonoured due to our tight financial position. You are duly apprised of this fact. You were also requested not to present the cheques”.
1. The appellate court may only overrule or otherwise disturb the trial court’s acquittal if it has “very substantial and compelling reasons” for doing so.
vi) The trial court has ignored the evidence or misread the material evidence or has ignored material documents like dying declarations/ report of the Ballistic expert, etc.
Pertinently, in Ghurey Lal (supra), the Supreme Court considered the judgment of the Privy Council in Sheo Swarup (supra), relied upon in Sanwat Singh (supra). Thus, this Court would scrutinize the impugned judgment in the context of Ghurey Lal (supra).
27. Thus, if the leased premises is rendered substantially and permanently unfit for the purpose for which it was let, the lessee has the option to avoid the lease. Unless the lessee so avoids the lease, he cannot avoid his obligation contained in clause (l) of Section 108, which states that “the lessee is bound to pay or tender, at the proper time and place, the premium or rent to the lessor or his agent in this behalf;”.
28. This position is rather well settled. As early as in 1973, this Court in Chamber of Colours and Chemicals Pvt. Ltd. v. Trilokchand Jain, 1973 (9) DLT 510 dealt with this issue. In this case, proceedings were initiated under the Delhi Rent Control Act, 1958, inter alia, on the ground of non payment of rent by the tenant. The Rent Controller passed an order under Section 15(1) of the said Act, directing deposit of arrears of rent and directing payment of interim rent from month to month. During pendency of the eviction proceedings, a part of the tenanted premises was destroyed by fire. The tenant did not deposit the interim rent fixed by the Controller. Consequently, the landlord moved an application under section 15(7) of the said Act praying that the defence of the tenant be struck out. The tenant/appellant then contended that the landlord was not entitled to claim rent as part of the premises had been destroyed by fire, and the landlord had refused-either to reconstruct the destroyed premises, or permit the appellant/tenant to do so. The application of the landlord under section 15(7) was rejected by the Rent Controller. However, in first appeal, the Rent Control Tribunal allowed the appeal of the respondent/landlord. Consequently, the tenant preferred a second appeal before the High Court.
9. To the same effect are the cases reported in AIR1966All225 and in re- Alanduraippar‟s case, AIR1963Mad94 , There cannot be any unilateral suspension of rent. The tenant continues to be liable for the whole of the rent until he obtains an order from the Court or agreement from the landlord for reduction of the proportionate part of the rent. (See. Kishan Chand v. Rainesh Chander and others1969 AIRCJ 839 a decision of Deshpande J. of this Court). Therefore, where an order for deposit of rent has been made under sub-section (1) of section 15 of the Act, the tenant cannot unilaterally suspend the payment or deposit of rent as ordered by the Controller and if he does so he undoubtedly commits a breach of the order of the Controller which will entitle the tenant to ask for an order under sub-section (7) of section 15 of the Act”.
[emphasis supplied ] From the above extract, it would be seen that the aforesaid legal position as existed for over a century.
“(2) This is application for direction to defendant No.1 that the rent of the premises occupied by defendant No.1 bank be paid. The claim in the application is for payment of Rs.1,02,600.00 per month.
(3) It is stated in the reply that a part of the roof had collapsed on 13.10.1990, and the building was sealed by the New Delhi Municipal Committee on 05.10.1990, by declaring it to be unsafe. Section 108(e) of the Transfer of Property Act, 1882, has remained unchanged since 1882. If the defendant/ tenant was so minded, it had the option of voiding the lease. It has not done so. So long as the lease has not been voided, the defendant bank is liable to pay the rent.
(4) MR.J.K. Seth relies on the case reported as 1973 Rajdhani Law Reporter (Note) 68, being S.A.O. No.30 of 1969 ( Chamber of Colour and Chemical Pvt. Ltd. v. Trilok Chand ) , where it was held by this Court that a tenant cannot treat a lease as subsisting and suspend payment of rent. I am in respectful agreement.
(5) The defendant bank has not voided the leas we in question. It continues to regard itself as tenant. As a tenant it has to pay the agreed rent. I, Therefore, direct the defendant to deposit the rent of Rs.1,02,600/ -per month, which has admittedly not been paid since 31.10.1990, in Court within ten days, as it is said by the defendant’s counsel that there is no difficulty in paying the rent.
firstly on 13.04.2009 (when a portion of the basement & third floor were sealed) and, secondly on 12.09.2009, (when the entire premises was sealed), is of no relevance for the simple reason that the respondent/tenants did not choose to avoid the lease as they could have done. It is wholly irrelevant for the present purpose, as to who was responsible for the sealing of the premises on both the occasions. Even if one were to proceed on the assumption that the appellant and the other co-owners had made excess coverage on the basement and upper floors of the leased premises even prior to the grant of the lease, and it was that excess coverage which led to the sealing of the leased premises, that would not provide justification to the respondent/tenants to deny their liability to pay the rent, if they choose to continue to hold the leased premises as tenants.
33. The respondent/lessees took the premises on lease with open eyes. Even if it were to be accepted for the sake of argument, that the premises was taken by them on lease unmindful of the excess coverage on the basement and upper floors, and that the said illegality was latent, the consequent sealing of the leased premises would not entitle the respondent/lessee to suspend their obligation to pay the rent unilaterally when the lease has not been avoided. Their only option was to surrender the lease and claim damages for the losses that they may have suffered on account of them being leased a premises with such defects. It is this aspect which has been completely overlooked by the learned MM and this fundamental error of law has led to grave miscarriage of justice in the present case.
34. The submission of Mr. Wadhwa premised on clause 7(b) of the lease agreement which contains the warranty and representation made by the lessors, at best, may entitle the lessees to enforce the same and to claim damages and losses, if any, suffered by them on account of the defects in the leased premises. The same does not entitle the respondent/lessees to suspend the payment of rent.
35. There is no merit in the submission of Mr. Wadhwa that the appellant and the other co-owners choose not to terminate the lease despite non- payment of rent and, therefore, the non-payment of rent could not be considered to be a breach of the terms of the lease. The appellant and the other co-owners were entitled to enforce the lease, and they were not obliged to terminate the same on account of non-payment of rent.
36. There is no merit in the submission of Mr. Wadhwa that the object of the lease agreement was illegal and that the same was void. The learned MM has comprehensively discussed the aforesaid aspect under issue no.2 and I agree with the said reasoning as well as conclusion of the learned MM. Moreover, Ld. Counsel for the respondents has advanced no argument to claim that the lease agreement was void ab-initio, or to show that the finding of the Ld.MM on the said aspect in erroneous. Consequently, no reliance can be placed on the decision of this Court in Virender Singh (supra).
37. The decisions of the Supreme Court in Sanwat Singh (supra) and K. Prakashan (supra) are of no avail in the facts of the present case, since this Court is of the considered view that the impugned judgment is based on an erroneous view of the law, and it would result in grave miscarriage of justice, if permitted to be sustained.
“5. …. …. In the case of a signed blank cheque, the drawer gives authority to the drawee to fill up the agreed liability. If the drawee were to dishonestly fill up any excess liability and the extent of liability if it becomes bona fide matter of civil dispute in such case, the drawer has no obligation to facilitate the encashment of cheque. In the instant case the reply Ex. P. 40 discloses that long before presentation of cheque, the extent of liability was disputed but ignoring the objection, the company filled up the cheque for an amount not admitted by the drawer. If the accused were to prove that there is a bona fide dispute with regard to extent of liability, the dishonour of cheque under such circumstance does not attract prosecution Under Section 138 of N.I. Act. The dismissal of complaint is sound and proper. The appeal is dismissed.
39. However, the position in the present case is entirely different. There is no dispute with regard to the essential facts, namely, that the appellant and the other co-owners are the owners and the landlords of the premises in question; that the premises in question was leased out by five different lease deeds to the respondent/lessees by the five co-owners in respect of their undivided 1/5th share each on a monthly rent of Rs.1,10,000/- for each of the co-sharers, i.e. Rs.5,50,000/- in the aggregate; that the lease had not been surrendered by the lessee, and; the advance cheques issued by the lessee towards payment of rent were dishonoured upon presentation. Pertinently, the lease agreements also provided for payment of interest on the overdue amount of arrears of rent @ 18% p.a. However, the cheques in question did not pertain to the said claim for interest. They pertained only to the monthly rent, which is an ascertained and crystallized liability. It is equally pertinent to note that the respondents admitted their liability in their reply dated 23.05.2009 (Ex. DW-2/C3) and conveyed their intention to clear the cheques and stated that they were dishonoured due to their tight financial position.
34. The aforesaid observations made by the Supreme Court in Narayana Menon (supra) have been relied to urge that in respect of a cheque issued by way of security, a complaint under Section 138 NI Act is not maintainable.
“138. While analyzing different decisions rendered by this Court, an attempt has been made to read the judgments as should be read under the rule of precedents. A decision, it is trite, should not be read as a statute.
139. A decision is an authority for the questions of law determined by it. While applying the ratio, the court may not pick out a word or a sentence from the judgment divorced from the context in which the said question arose for consideration. A judgment as is well-known, must be read in its entirety and the observations made therein should receive consideration in the light of the questions raised before it. ( See Haryana Financial Corporation and Anr. v. Jagdamba Oil Mills and Anr., 1SCR621 , Union of India and Ors. v.
Dhanwanti Devi and Ors. , (1996) 6 SCC 44 , Dr. Nalini Mahajan v. Director of Income Tax (Investigation) and Ors.,  257 ITR 123( Delhi) , State of UP and Anr. v. Synthetics and Chemicals Ltd. and Anr. , 1991 (4) SCC 139 , A- One Granites v. State of U.P. and Ors., AIR 2001 SCW 848 and Bhavnagar University v. Palitana Sugar Mill (P) Ltd. and Ors., (2003) 2 SCC 111.
36. The Supreme Court in Narayana Menon (supra) was not particularly dealing with the issue as to whether, or not, a cheque issued for security or for any other purpose would come within the purview of Section 138 of the NI Act. The observation of the Supreme Court as extracted above cannot, therefore, be understood as laying down a general proposition that a cheque issued as security would not come within the purview of Section 138 of the NI Act in all cases. Such reading of the judgment would go contrary to the express language used in Section 138 of the NI Act, which uses the expression, „where any cheque………… for payment of any amount of money………of any debt or other liability………‟.
“It is to be noticed that the observation made by the apex court in Narayana Menon‟s case that “……………….. if a cheque is issued for security or for any other purpose the same would not come within the purview of Section 138 of the Act…….”. This was a passing observation in that case with reference to the facts found therein. It cannot be construed as an axiomatic statement of law to be mechanically applied, in all circumstances”.
38. I may also observe that in Narayana Menon (supra), the earlier decision of the Supreme Court in Beena Shabeer (supra) was not cited or brought to the notice of the Court, and has not been considered by the Court. In fact, on a reading of Narayana Menon (supra), it is clear that the said decision was rendered in the specific facts of that case, and upon examination of the evidence led before the Court by holding that the accused had been able to discharge his initial burden of raising a probable defence, and that the complainant had failed to establish that the cheques in question have been issued in discharge of a legal debt or other liability.
41. M.S. Narayana Menon (supra) is a case like Shreyas Agro (supra), where the extent of the outstanding debt/liability was under serious dispute. It was in this background that the Supreme Court had held that the accused had been able to raise a probable defence, as the liability of the accused/debtor was not ascertained and crystallized. The same cannot be said about the present case in view of the aforesaid discussion. The decision in M.S. Narayana Menon (supra), therefore, has no application to the facts of the present case.
42. Reliance placed on the order dated 07.04.2014 in CCP No.111/2012 in C.S. (OS) No.735/2010 is of no avail whatsoever. It has no bearing on the issue of the respondent/lessees liability to pay rent. Thus, reliance placed on K. Prakashan (supra) is misplaced in the facts of the present case.
“20. It is the observation made by the Supreme Court in Indus Airways (supra) – that the dishonoured cheque should be in relation to a debt or other liability subsisting on the date of drawal of the cheque, to be able to maintain a complaint under Section 138 of the NI Act, which is the cornerstone of the legal submission of the respondents/ accused.
21. On a closer scrutiny of the decision in Indus Airways (supra), it appears to me that Indus Airways (supra) has no application to the facts of the present case as the above extracted observations were made in a materially different factual background. I have consciously extracted paragraph 35 from the decision in Suresh Chandra Goyal (supra), wherein this Court has taken note of the settled legal position on the aspect as to how the observations in an earlier judgment of the Supreme Court have to be read and applied in subsequent cases. As noticed above, in Indus Airways (supra), the purchaser issued advance cheques with the two purchase orders. Before the supplies under the purchase orders was made, the purchaser/accused cancelled the two purchase orders (which was not in dispute), and requested the complainant to return the cheques. The cheque was presented and dishonoured. As a result, a complaint was preferred. The Supreme Court dismissed the complaint on the ground that there was no existing liability between the parties since the contract had been terminated. Thus, on the date of presentation of the cheques for encashment, there was no existing ascertained and liquidated liability or debt. The cheques had been given in advance towards the sale consideration, and not for realisation of unascertained damages that may arise on account of wrongful termination of the purchase order by the purchaser. It was held that there was no debt or other liability existing relatable to the cheque, since the contracts stood terminated on the date of presentation of the cheque. At best, only a civil liability existed in damages.
22. However, in the present case, the liability or debt is claimed to have arisen under the contract in respect of which the dishonoured cheque was issued. The cheque was issued precisely to secure the debt/ liability that may arise under the contract on account of the accused undertaking the share sale/ purchase transactions on credit basis through the appellant broker. Thus, the decision in Indus Airways (supra) cannot be mechanically applied in the present case.
23. In Indus Airways (supra), the earlier decision in Beena Shabeer (supra) was not brought to the notice of the Supreme Court and was, therefore, not considered. Both Indus Airways (supra) and Beena Shabeer (supra) are decisions of co-equal benches. In Beena Shabeer (supra), the Supreme Court did not approve the decision in Shreenivasan (supra) wherein the High Court had held that when a cheque is issued as a security, no complaint will lie under Section 138 of the NI Act. Thus, if the observations made by the Supreme Court in Indus Airways (supra) are understood as laying down a general legal proposition that on the date of issuance of the cheque the debt/other liability should be subsisting to maintain a complaint under Section 138 of the NI Act, the same would not align with the ratio laid down in the earlier decision in Beena Shabeer (supra).
24. As noticed above, in Indus Airways (supra) the Supreme Court was considering the fact situation wherein the purchase order was not executed with supply of the contracted goods and, thus, the cheque issued by the purchaser towards advance payment was held as not covered by Section 138 of NI Act. But what happens, where the purchaser while placing the purchase order issues in advance a post-dated cheque; goods/ services are supplied in terms of the contract, and; the post-dated cheque upon presentation on the due date gets dishonoured. The Supreme Court was not dealing with such a fact situation. Could it be said that, because there was no pre-existing or pre- determined debt or other liability on the date of issue of the cheque by the purchaser (as the goods/ services were supplied only after the issuance of the post-dated cheque), a complaint under Section 138 NI Act would not lie?
25. In my view, it would defeat the object of Section 138 NI Act to hold that the seller/ service provider cannot enforce his right conferred by Section 138 NI Act in such a situation, as it would encourage dishonest buyers to evade their penal liability. It would erode the efficacy and credibility of commercial transactions undertaken on the basis of post-dated cheques, or cheques issued towards advance payment, with a credit period. The view of the Supreme Court in Indus Airways (supra) does not appear to take out from the scope of Section 138 NI Act cases of this nature, as what fell for examination was a fact situation where the advance cheque had been issued along with the purchase order, and the supply of goods was not made for whatever reason.
44. Thus, the decision in Indus Airways (supra) too had no application in the facts of the present case as that was a case where advance cheques had been issued against the purchase order, which was cancelled before its execution. Consequently, the consideration had not passed from the seller to the buyer – who was the drawer of the cheque. It could not be said that the said cheque had been issued in discharge of a debt or other liability. The same cannot be said about the present case for the reason that the advance cheques had been issued towards payment of rent by the respondent/lessees. The respondents continued to remain tenants and incurred the liability to pay rent month to month. The advance cheques issued towards payment of rent when deposited for realization of the rent for the said period were dishonoured upon presentation. The respondent/lessees incurred the liability to pay the rent as they continued to retain possession even though the same had been sealed by the municipal authorities. Thus, reliance placed on Indus Airways (supra) by the learned MM is completely misplaced and this is yet another serious error of law found in the impugned judgment.
45. For all the aforesaid reasons, the present appeal is allowed and the impugned judgment is set aside. The respondents are convicted of the offences under Section 138 of the NI Act.

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