KANORIA INDUSTRIES LIMITED, CEMENT DIVISION BY ITS AUTHORISED REPRESENTATIVE, LEGAL OFFICER, MR. A.R. NIDASESHI Vs. M/S. BASAVESHWARA TRADERS BY ITS PROPRIETOR MR. S.H. CHANGALI, CEMENT DEALER

JUDGEMENT

(1.) HEARD the learned Counsel for the appellant and the learned Counsel for the respondent. The appellant was the complainant before the trial court alleging an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (Hereinafter referred to as the 'NI Act', for brevity). The appellant is a company incorporated under the Companies Act, 1956 and the respondent was the proprietor running a business in cement. The cement was supplied by the appellant. A cheque bearing No. 514432 dated 16.6.2004 for a sum of Rs. 68,656/ - had been issued for non -payment of certain monies due to the appellant not from the respondent, but on behalf of another. The same having been presented for collection, it was dishonoured for insufficient funds and therefore, a notice having been issued in terms of Section 138 of the NI Act and when there was noncompliance of the demand, a complaint was filed. A defence was raised to the effect that the cheque was not issued in discharge of any legally recoverable debt from the respondent and there was no contractual relationship between the appellant and the respondent and issuance of the cheque, even if on behalf of another, could not be enforced against the respondent. Therefore, the trial court accepted the said contention and in line with the decision rendered by the apex court in AIR 2008 SC 1325 , proceeded to hold that the burden was on 'the appellant to establish that there was legally recoverable debt, in respect of which a cheque had been issued and since admittedly there was no contractual relationship between the appellant and the respondent, acquitted the accused. It is that which is under challenge in the present appeal.

(2.) THE learned Counsel would firstly submit that the decision in Krishna Janardhana Bhat, supra, is no longer good law in the light of the decision of the apex court in Noorul Huda Maqbool Ahmed Vs. Ram Deo Tyagi and Others, JT (2011) 7 SC 189 . Secondly, it is contended that insofar as the claim that there was no contractual relationship between the appellant and the respondent is indeed true. The cheque in question had been issued by the respondent on behalf of another and that by itself would not enable the respondent to claim that there was no legally recoverable debt. It is perfectly valid for one to undertake on behalf of another to discharge a debt and therefore, the respondent had stepped into the shoes of the original debtor in issuing the cheque and hence was an enforceable instrument.