Excelsior Correspondent
JAMMU, Feb 2: A court dismissed a cheque-bounce complaint, holding that the cheque in question was issued as a security instrument and not in discharge of any legally enforceable debt as such acquitted the accused from cheque bounce charges.
Chief Judicial Magistrate Jammu Munish K Manhas dismissed the complaint filed by M/s Sanjay Diesels under Section 138 against M/s Mir Engineers and Builders and its proprietor in a cheque dishonour case involving Rs 73.35 lakh by holding that the complainant could not prove the accused as guilty under NI Act.
The complaint pertained to an alleged dishonour of cheque dated 17 September 2007, drawn on Jammu and Kashmir Bank, Rawalpora, which was returned unpaid with the remark “Payment Stopped by Drawer.” The complainant claimed the cheque was issued towards part payment for diesel generator sets supplied to the accused.
However, during the trial, the complainant’s own witnesses including the firm’s manager and proprietor admitted that the cheque was issued as a security cheque prior to dispatch of the first consignment and that no debt was outstanding on the date of issuance. It also emerged that the accused had already paid Rs 59 lakh, in addition to an advance of Rs 4 lakh, before the cheque was presented for encashment.
The court noted that DG sets worth Rs 88.02 lakh were supplied against a total contract value of Rs 1.63 crore, while the remaining goods were never delivered due to strained business relations. In view of this, the court held that the cheque amount did not represent a subsisting legally enforceable liability.
Relying on Supreme Court judgments, the court ruled that a cheque issued as advance or security, where liability does not exist on the date of drawal or stands substantially paid before presentation, does not attract criminal liability under Section 138 of the NI Act.
The court also rejected the accused’s plea regarding non-service of legal notice, holding that service was deemed under law.
Nevertheless, it concluded that the complainant had failed to prove the essential ingredients of the offence. Accordingly, the complaint was dismissed and the accused were acquitted. The accused was represented in the court by senior advocate B A Bashir along with Saquib Mehmood.
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