The Jammu and Kashmir High Court has recently ruled that a complaint under Section 138 of the Negotiable Instruments Act (NI Act) will not be vitiated due to failure by the holder of the cheque to disclose/ state in his complaint that the cheque was received for discharge of a legally enforceable debt or liability on the part of drawer of the cheque (Narinder Singh v. Sharjeel Malik).
The judgment was delivered by single-judge Justice Sanjeev Kumar on May 17 who ruled that in view of Section 139 of the NI Act, it is not available to the petitioner to argue that in the absence of the specific mention in the complaint that the cheque was received by the respondent in the discharge of any debt or other liability, the complaint is not maintainable.
"It true that in the complaint the respondent has not disclosed the legally enforceable debt or liability in discharge whereof he has received the cheque from the petitioner. That, however, cannot vitiate the complaint about the simple reason that under Section 139 of the Act, there is a presumption that the holder of the cheque received the cheque of nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability unless of course the contrary is proved," the Court held.
The Court also observed that the defect of not supplying the list of prosecution witnesses is only an irregularity and the same would not vitiate the proceedings unless it has led to the failure of justice.
The respondent in the case had filed a complaint under Section 138 of the NI Act against the petitioner on the allegations that the petitioner had issued in his favor, a cheque for an amount of Rs 25 lakh drawn on the petitioner's account maintained with Ellaquai Dehati Bank, Branch Bhaderwah.
The respondent deposited the said cheque for encashment but the same was returned with the memo that the account of the petitioner did not have sufficient funds for its encashment.
The respondent then served a demand notice on the petitioner requesting him to make the payment of the cheque amount within fifteen days but the petitioner did not make the payment due to which a complaint under Section 138 of the Act was filed before the trial court.
The trial court entertained the complaint and took cognizance of it after recording the preliminary statement of the complainant and his witnesses and issued an order on August 20, 2019, to proceed against the petitioner.
This order of issuance of the process was called in question by the petitioner before the High Court primarily on two grounds:
i) that the complaint is not maintainable for the reason that in the complaint the respondent did not specifically claim that he had received the cheque in discharge of some legally enforceable debt or liability;
ii) that the complaint does not contain the list of witnesses.
The High Court, however, ruled that Section 139 of the Act creates a presumption that the cheque was received for discharge of debt or liability. Hence, it would not be open for the petitioner to argue that the complaint stood vitiated for lack of specific averment in that regard.
The Court in this regard also referred to the Supreme Court judgment in Rohitbhai Jivan Patel v. State of Gujarat [(2019) 18 SCC 106].
The Court also turned down the argument of the petitioner that the complaint is not maintainable in the absence of a list of witnesses submitted along with the complaint.
"It is true that under Section 204 of the Code of Criminal Procedure (CrPC), the Court shall not issue summon or warrant against the accused unless a list of prosecution witnesses is filed. However, the defect of not supplying the list of prosecution witnesses is only an irregularity unless failure of justice has in fact been occasioned thereby," the Court held.
No prejudice has been pleaded by the petitioner in this petition, it added.
The Court while dismissing the petition held that the defect of not supplying the list of prosecution witnesses before issuance of process is curable, as Section 465 CrPC would come to the rescue of the respondent.
The respondent was represented by advocate Irfan Khan while advocate Pankaj Dubey appeared for the petitioner.