High Court · 2025

2. Heard Sri Rajneesh Kumar Singh, learned counsel for the applicants, Sri Rajeev Kumar Singh, learned A.G.A for the State and perused the record.

3. The instant application under Section 482 Cr.P.C. has been filed for quashing the summoning order dated 02.01.2021 passed by Presiding Officer, Additional Court No.2, Agra as well as entire proceeding of Complaint Case No.828 of 2020, under Section 138 N.I. Act, Police Station- Hariparvat, District Agra pending in the court of Additional Court no.2, Agra.

4. Contention of learned counsel for the applicant is that the applicant and opposite party no.2 have entered into business relationship and it is admitted fact that during the course of business relationship, the opposite party no.2 had invested Rs.41,50,000/- in the business of the applicant. It is further submitted that the applicant had given two cheques of total amount of Rs. 41,50,000/- as security to the opposite party no.2 and subsequently applicant has paid Rs.37,47,900/- through RTGS as well as other modes of transaction to the opposite party no.2 but opposite party no.2 misused those cheques and initiated the impugned proceeding. It is further submitted that in the complaint it is admitted that the applicant had paid Rs.28,86,459/- in the year 2018 itself. Therefore, part payment towards the cheque of Rs. 41,51,000/- has already been made by the applicant, therefore, in view of law laid down by the Apex Court in the case of Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel; (2023) 1 SCC 578 cheque in question cannot be presented to recover the entire cheque amount.

5. Per contra, learned AGA for the State has opposed the prayer and submitted that the ground raised by the applicant is his defence, which cannot be considered at this stage, therefore, the present application is liable to be dismissed.

6. After hearing the submission of learned counsel for the parties and perusal of record, it appears that it is not in dispute that two cheques in question of amount of Rs.41,50,000/- have been issued by the applicant to the opposite party no.2. From perusal of the complaint, it also appears that out of two cheques in question, one cheque bearing No. 001253 of Rs.15,00,000 is date of 01.07.2020 while another cheque No.001465 of Rs.26,50,000/- is of date 10.08.2020 and as per Section 118(b) of N.I. Act date mentioned in the cheque will itself be deemed to be date of issuance of cheque. Therefore, both the cheque in question will be deemed to be issued in the year 2020 and contention of counsel for the applicant that he had paid Rs.37,47,900/- from 15.01.2018 to 21.07.2019 itself shows that amount was paid prior to issuance of cheque. The Apex Court in the case of Dashrathbhai Trikambhai Patel (Supra) has observed that if part payment is made after issuance of cheque between the period cheque is drawn and when it is encashed upon the maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque unless part payment is endorsed on the cheque itself. Paras 33 and 34 of the Dashrathbhai Trikambhai Patel (supra) case is reproduced hereinbelow: "33. Under Section 56 read with Section 15 of the Act, an endorsement may be made by recording the part-payment of the debt in the cheque or in a note appended to the cheque. When such an endorsement is made, the instrument could still be used to negotiate the balance amount. If the endorsed cheque when presented for encashment of the balance amount is dishonoured, then the drawee can take recourse to the provisions of Section 138. Thus, when a part-payment of the debt is made after the cheque was drawn but before the cheque is encashed, such payment must be endorsed on the cheque under Section 56 of the Act. The cheque cannot be presented for encashment without recording the part-payment. If the unendorsed cheque is dishonoured on presentation, the offence under Section 138 would not be attracted since the cheque does not represent a legally enforceable debt at the time of encashment.

34. In view of the discussion above, we summarise our findings below:

34.1. For the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation.

34.2. If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque.

34.3. When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted.

34.4. The first respondent has made part-payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the "legally enforceable debt" on the date of maturity. Thus, the first respondent cannot be deemed to have committed an offence under Section 138 of the Act when the cheque was dishonoured for insufficient funds.

34.5. The notice demanding the payment of the "said amount of money" has been interpreted by judgments of this Court to mean the cheque amount. The conditions stipulated in the provisos to Section 138 need to be fulfilled in addition to the ingredients in the substantive part of Section 138. Since in this case, the first respondent has not committed an offence under Section 138, the validity of the form of the notice need not be decided.

7. In the present case, the sole contention of the applicant is that the applicant has already discharged part of the liability, therefore, cheque in question cannot be presented to recover the entire cheque amount and it could be presented to recover the balance amount after adjusting the part payment if endorsement is made on the cheque regarding part payment, this contention is misconceived because part payment was made before the drawn of cheque, therefore, cannot be said to be part payment towards the cheque. Therefore, the judgement of the Dashrathbhai Trikambhai Patel (supra) will not be applicable in the present fact and circumstance. However, it is always open for the applicant to raise these issue before the court below by proving the part payment of cheque amount.

8. In view of above, this Court finds that the grounds raised by the counsel for the applicant are his defence, which cannot be considered at this stage being a disputed question of fact. These grounds would be available to him during trial.

9. In view of above, this Court does not find any illegality in the impugned order. Accordingly, the present application is dismissed. Order Date :- 24.1.2025 A.Kr. AJAY KUMAR AJAY KUMAR High Court of Judicature at Allahabad High Court of Judicature at Allahabad

2. Heard Sri Rajneesh Kumar Singh, learned counsel for the applicants, Sri Rajeev Kumar Singh, learned A.G.A for the State and perused the record.

3. The instant application under Section 482 Cr.P.C. has been filed for quashing the summoning order dated 02.01.2021 passed by Presiding Officer, Additional Court No.2, Agra as well as entire proceeding of Complaint Case No.828 of 2020, under Section 138 N.I. Act, Police Station- Hariparvat, District Agra pending in the court of Additional Court no.2, Agra.

4. Contention of learned counsel for the applicant is that the applicant and opposite party no.2 have entered into business relationship and it is admitted fact that during the course of business relationship, the opposite party no.2 had invested Rs.41,50,000/- in the business of the applicant. It is further submitted that the applicant had given two cheques of total amount of Rs. 41,50,000/- as security to the opposite party no.2 and subsequently applicant has paid Rs.37,47,900/- through RTGS as well as other modes of transaction to the opposite party no.2 but opposite party no.2 misused those cheques and initiated the impugned proceeding. It is further submitted that in the complaint it is admitted that the applicant had paid Rs.28,86,459/- in the year 2018 itself. Therefore, part payment towards the cheque of Rs. 41,51,000/- has already been made by the applicant, therefore, in view of law laid down by the Apex Court in the case of Dashrathbhai Trikambhai Patel vs Hitesh Mahendrabhai Patel; (2023) 1 SCC 578 cheque in question cannot be presented to recover the entire cheque amount.

5. Per contra, learned AGA for the State has opposed the prayer and submitted that the ground raised by the applicant is his defence, which cannot be considered at this stage, therefore, the present application is liable to be dismissed.

6. After hearing the submission of learned counsel for the parties and perusal of record, it appears that it is not in dispute that two cheques in question of amount of Rs.41,50,000/- have been issued by the applicant to the opposite party no.2. From perusal of the complaint, it also appears that out of two cheques in question, one cheque bearing No. 001253 of Rs.15,00,000 is date of 01.07.2020 while another cheque No.001465 of Rs.26,50,000/- is of date 10.08.2020 and as per Section 118(b) of N.I. Act date mentioned in the cheque will itself be deemed to be date of issuance of cheque. Therefore, both the cheque in question will be deemed to be issued in the year 2020 and contention of counsel for the applicant that he had paid Rs.37,47,900/- from 15.01.2018 to 21.07.2019 itself shows that amount was paid prior to issuance of cheque. The Apex Court in the case of Dashrathbhai Trikambhai Patel (Supra) has observed that if part payment is made after issuance of cheque between the period cheque is drawn and when it is encashed upon the maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque unless part payment is endorsed on the cheque itself. Paras 33 and 34 of the Dashrathbhai Trikambhai Patel (supra) case is reproduced hereinbelow: "33. Under Section 56 read with Section 15 of the Act, an endorsement may be made by recording the part-payment of the debt in the cheque or in a note appended to the cheque. When such an endorsement is made, the instrument could still be used to negotiate the balance amount. If the endorsed cheque when presented for encashment of the balance amount is dishonoured, then the drawee can take recourse to the provisions of Section 138. Thus, when a part-payment of the debt is made after the cheque was drawn but before the cheque is encashed, such payment must be endorsed on the cheque under Section 56 of the Act. The cheque cannot be presented for encashment without recording the part-payment. If the unendorsed cheque is dishonoured on presentation, the offence under Section 138 would not be attracted since the cheque does not represent a legally enforceable debt at the time of encashment.

34. In view of the discussion above, we summarise our findings below:

34.1. For the commission of an offence under Section 138, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation.

34.2. If the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, then the legally enforceable debt on the date of maturity would not be the sum represented on the cheque.

34.3. When a part or whole of the sum represented on the cheque is paid by the drawer of the cheque, it must be endorsed on the cheque as prescribed in Section 56 of the Act. The cheque endorsed with the payment made may be used to negotiate the balance, if any. If the cheque that is endorsed is dishonoured when it is sought to be encashed upon maturity, then the offence under Section 138 will stand attracted.

34.4. The first respondent has made part-payments after the debt was incurred and before the cheque was encashed upon maturity. The sum of rupees twenty lakhs represented on the cheque was not the "legally enforceable debt" on the date of maturity. Thus, the first respondent cannot be deemed to have committed an offence under Section 138 of the Act when the cheque was dishonoured for insufficient funds.

34.5. The notice demanding the payment of the "said amount of money" has been interpreted by judgments of this Court to mean the cheque amount. The conditions stipulated in the provisos to Section 138 need to be fulfilled in addition to the ingredients in the substantive part of Section 138. Since in this case, the first respondent has not committed an offence under Section 138, the validity of the form of the notice need not be decided.

7. In the present case, the sole contention of the applicant is that the applicant has already discharged part of the liability, therefore, cheque in question cannot be presented to recover the entire cheque amount and it could be presented to recover the balance amount after adjusting the part payment if endorsement is made on the cheque regarding part payment, this contention is misconceived because part payment was made before the drawn of cheque, therefore, cannot be said to be part payment towards the cheque. Therefore, the judgement of the Dashrathbhai Trikambhai Patel (supra) will not be applicable in the present fact and circumstance. However, it is always open for the applicant to raise these issue before the court below by proving the part payment of cheque amount.

8. In view of above, this Court finds that the grounds raised by the counsel for the applicant are his defence, which cannot be considered at this stage being a disputed question of fact. These grounds would be available to him during trial.

9. In view of above, this Court does not find any illegality in the impugned order. Accordingly, the present application is dismissed. Order Date :- 24.1.2025 A.Kr. AJAY KUMAR AJAY KUMAR High Court of Judicature at Allahabad High Court of Judicature at Allahabad