The application was filed by the petitioner- Dilip Majumder seeking exemption from surrendering.
The facts leading to the case are that as per the proposal, Dilip Majumdar had handed over the said land to the respondent Nikunja Das as the part payment by cheque. Dilip Majumder had been convicted under Section 138 of the Negotiable Instruments Act and sentenced to pay fine of Rs.4,00,000/- with default stipulation for 6 (six) months by the Additional Chief Judicial Magistrate, West Tripura, Agartala. The Additional Sessions Judge, West Tripura reversed the judgment of the Additional Chief Judicial Magistrate and acquitted the Petitioner. However, in an appeal, the High Court reversed the Judgment of the Sessions Judge and restored the conviction and penalty imposed by the Additional Chief Judicial Magistrate.
Section 138 of the NI Act provides the remedial action against dishonoured cheque which was issued in discharge of the legally enforceable liability or debt. When under an agreement or contract to discharge any liability, payment is made in part or full by a cheque, and that cheque is not honoured, then Section 138 of the NI Act, 1881 would apply.
The following reasoning was given by the Tripura High Court “Even for contemplated sale if someone pays the earnest money by way of a cheque with or without delivery of the possession of the proposed land to be sold out, the cheque issued for making payment of that earnest money, if gets dishonoured the wrath of Section 138 of the NI Act would be attracted. That was issued to discharge the legally enforceable liability or debt.”
In the present case, the only penalty imposed on the petitioner is a fine of Rs. 4,00,000/- and the imprisonment for six months is only in the event of default in payment of the fine amount. In such circumstances, the Justice V. Ramasubramanian of the Supreme Court held that the question of exemption from surrendering does not arise as the substantial punishment is not one of imprisonment. Therefore, the application for exemption from surrendering stands dismissed.