Complainant/Appellant herein were actually issued by him and
agreeing that the same may be presented for payment after
25th September, 2007. The endorsement was in the following
manner:
“The above cheques are issued by me to
Nazimul Islam to deliver to Mr. Don Ayengia the
cheques are already been bounce. Now, we have
requested Mr. Dona Ayengia to represent the
cheques after 25.09.2007 to contact me.
15.09.2007
(H.Mudoi)”
10. It is not in dispute that the execution of the Promissory
Note and the endorsement made by the Respondent has been
satisfactorily proved at the trial. Concurrent findings recorded
by the trial court and the first appellate court to that effect
conclude the factual part of the controversy. The only question
that survives in the above background is whether the cheques
issued by the Respondent were meant to discharge, in whole or
part, “any debt or other liability” within the meaning of Section
138 of the Negotiable Instruments Act, 1881.
11. We have no hesitation in answering that question in the
affirmative. The facts as narrated above and as held proved by
the trial Court and the appellate court, leave no manner of JUDGMENT doubt, that Nazimul Islam had received an amount of rupees
ten lakhs from the complainant in connection with the
agreement executed between the two. It is also not in dispute
that upon termination of the agreement, the amount paid to
Nazimul Islam was refundable to the complainant and that
Nazimul Islam had agreed to refund the same within one
month. The promissory note executed by Nazimul Islam
contained an unequivocal acknowledgment of not only the
debt/liability aforementioned but promised to liquidate the
same within one month with interest at the bank rate. Five
cheques handed over were to be returned but only upon
payment of the amount in question. Such being the fact
situation, it cannot be said that the cheques had nothing to do
with any debt or other liability. As a matter of fact, the
existence of the debt or liability was never in dispute. On the
contrary, it was acknowledged by Nazimul Islam who simply
sought one month’s time to pay up the amount. The cheques
were post dated, only to give to the drawer the specified one
month’s time to pay the amount. There is thus a direct
relationship between the liability and the cheques issued in
connection therewith. Thus far there is no difficulty. The JUDGMENT difficulty arises only because the promissory note uses the
words “security” qua the cheques. This would ordinarily and in
the context in which the cheques were given imply that once
the amount of rupees ten lakhs was paid, the cheques shall
have to be returned. There would be no reason for their
retention by the complainant or for their presentation. In case,
however, the amount was not paid within the period stipulated,
the cheques were liable to be presented for otherwise there
was no logic or reason for their having been issued and handed
over in the first instance. If non-payment of the agreed
debt/liability within the time specified also did not entitle the
holder to present the cheques for payment, the issue and
delivery of any such cheques would be meaningless and futile if
not absurd. It is important to note that it was not a case
where no debt or liability was determined or acknowledged to
be payable. If cheques were issued in relation to a continuing
contract or business where no claim is made on the date of the
issue nor any determinate amount payable to the holder, one
could perhaps argue that the cheques cannot be presented or
prosecution launched on a unilateral claim of any debt or
liability. The present is, however, a case where the existence JUDGMENT of the debt/liability was never in dispute. It was on the
contrary acknowledged and a promise was made to liquidate
the same within one month. Failure on the part of the debtor
to do so could lead to only one result, viz. presentation of the
cheques for payment and in the event of dishonour, launch of
prosecution as has indeed happened in the case at hand.
12. The argument that the respondent had no liability to
liquidate the debt owed by Nazimul Islam, has not impressed
us. What is important is whether the cheques were supported
by consideration. Besides the fact that there is a presumption
that a negotiable instrument is supported by consideration
there was no dispute that such a consideration existed in as
much as the cheques were issued in connection with the
discharge of the outstanding liability against Nazimul Islam. At
any rate the endorsement made by the respondent on the
promissory note that the cheques can be presented for
encashment after 25-09-2007 clearly shows that the cheques
issued by him were not ornamental but were meant to be
presented if the amount in question was not paid within the
extended period. The High Court in our view fell in error in
upsetting the conviction recorded by the Courts below who had JUDGMENT correctly analysed the factual situation and applied the law
applicable to the same.
13. In the result, we allow these appeals and set aside the
order passed by the High Court to the extent it allowed
Criminal Revision No.41 of 2012 filed by the respondent.
Consequently the order passed by the appellate court shall
stand restored. We, however, do not see any reason to
interfere with the order passed by the High Court to the extent
it dismissed Criminal Appeal No.10 of 2012. No costs.
(KURIAN JOSEPH) New Delhi January 28, 2016