Moot Problem 2

Appellant side

IN THE HON’BLE HIGH COURT OF ANDHRA PRADESH

Criminal Appeal no.____/2012

In the Matter of:

Rajesh…………Appellant

Vs.

Ajay….Respondent

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

Table of Contents

Index of Authorities

Statement of Jurisdiction

Statement of Facts

Issues Raised

Body of Pleadings

Prayer


Statutes:

Negotiable Instruments Act , 1881

Partnership Act, 1932

Contract Act, 1872

Cases:

Books:

The Negotiable Instruments Act- Justice Ranganath Mishra(Retd.)


This criminal appeal is filed before this Hon’ble High Court of Andhra Pradesh under Section 374 of the Code of Criminal Procedure, 1973 by Mr.Rajesh arising out of the order of the Sessions Court upholding his conviction under Section 138 of the Negotiable Instruments Act, 1881.

Statement of Facts

Ajay and Rajesh were running a taxi business together in Hyderabad. Rajesh issued a personal cheque dated 8.10.2011 for Rs.50,000/-to Ajay for his share of profits. Subsequently, Rajesh was in pressing need of a hand loan which was given by Ajay for an amount of Rs.50,000/- on 15/12/2011. Rajesh failed to repay the loan amount within two months as promised. The cheque that Rajesh issued to Ajay for his business profit was dishonoured on two instances of presentment. Ajay issued a legal notice to Rajesh to which there was no reply. After 15 days of issuance of notice, Ajay filed a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881.

Issues Raised

Whether the amount paid to Ajay is a legally enforceable debt or not?

Whether the appellant is guilty of the wrongful dishonour of the cheque?

Body of Pleadings

1.That the amount paid to Ajay by Rajesh is not a legally enforceable debt.

It is humbly submitted that the amount transacted by cheque is not a legally enforceable debt and hence, as such, would not attract the penal provision under section 138 of the Negotiable Instruments Act.

Section 138 of the Negotiable Instruments Act attracts strict liability of penal nature only. Strict liability of 138 can be enforced only when it is a case of discharge of a legally enforceable debt or liability1.

In common parlance, debt is something owed to another. A liability is an obligation, a chosen action which is capable of being assigned by creditor to some other person.

The furnishing of evidence has already been done and the burden of proof that lies on the appellant herein to show that the amount is not a legally enforceable debt has been discharged in the Court of the Metropolitan Magistrate where evidence was taken on record.

1 Sam Daniel v john 2005 128 comp cas 17

2. That the appellant is not guilty for wrongful dishonour of the cheque.

It is humbly submitted that the appellant herein is not liable for any wrongful dishonour of the cheque. It can be gathered from the fact file that respondent herein has initiated the complaint proceedings against the appellant only after the former failed to discharge the liability of the hand loan of Rs.50,000/- that he had taken from the latter.

It is submitted that the personal cheque issued by the appellant to the respondent was not in lieu of discharging the liability of the hand loan that Rajesh had taken from Ajay. It is submitted that the respondent attempted to encash the cheque and initiated complaint proceedings only after the repayment of the hand loan of Rs.50,000 was delayed by the appellant whereas the cheque in issue was issued in lieu of the profit share out of the business. It is submitted that the respondent has attempted to act upon the delay in repayment of the hand loan by filing a complaint for the dishonour of the cheque issued for another purpose. Both are different and distinguished transactions. Section 138 is wrongfully invoked as a knee jerk reaction to the delay in payment of the hand loan. The Hon’ble Metropolitan Magistrate and the Hon’ble Sessions Court failed to appreciate this distinction.

There cannot be any presumption as under Section 139 of the Negotiable Instruments Act. The said cheque was not issue for any consideration as it was not meant for discharging the debt of the hand loan. Sufficient evidence has been adduced in the trial proceedings in this regard.

The requirement for an offence to be made out in this section is that the cheque must be drawn “for the discharge in whole or in part of any debt or other liability”. An allegation in a complaint that “in the course of the business an accused had issued a cheque” does not satisfy the requirements needed for making out an offence under this section2.

Hence, by the above authority, even if it is considered as a cheque issued in the due course of business, the complaint shall not stand and will fail. It is humbly submitted that this Hon’ble High Court may revisit these facts and appreciate the same.

2 Kumar K vs Bapsons Footwear 1995 83 comp cas 172 Madras

Narinder Kumar vs. harnam singh 2000 cri lj 257 HP.

Prayer

Wherefore in the light of the facts stated, issues presented, arguments advanced and

authorities cited, the counsel for the Appellant humbly prays and implores this Hon’ble High

Court of Andhra Pradesh that it may be pleased to adjudge and declare:

That the amount transacted is not a legally enforceable debt

That the appellant is not guilty of wrongful dishonour under section 138 of the

Negotiable Instruments Act

And pass any order/orders this Hon’ble High Court may deem fit in the interest of justice,

equity and good conscience.

And for this act of kindness and grace, the Petitioner as in duty bound, shall forever pray in

gratitude.

Respectfully submitted on behalf of the Appellant,

Sd-

Counsel for the Appellant

Respondent Side

IN THE HON’BLE HIGH COURT OF ANDHRA PRADESH

Criminal Appeal no.____/2012

In the Matter of:

Rajesh…………Appellant

Vs.

Ajay….Respondent

WRITTEN SUBMISSIONS ON BEHALF OF THE RESPONDENT

Table of Contents



Statement of Facts

Issues Raised

Body of Pleadings

Prayer


Statutes:

Negotiable Instruments Act , 1881

Partnership Act, 1932

Contract Act, 1872

Cases:

Sam Daniel v john 2005 …128 comp cas 17Philip mk vs gainmore investment 2006 …Cri LJ 3175 Kerela

Books:

The Negotiable Instruments Act- Justice Ranganath Mishra(Retd.)


This criminal appeal is filed before this Hon’ble High Court of Andhra Pradesh under Section 374 of the Code of Criminal Procedure, 1973 by Mr.Rajesh arising out of the order of the Sessions Court upholding his conviction under Section 138 of the Negotiable Instruments Act, 1881.

Statement of Facts

Ajay and Rajesh were running a taxi business together in Hyderabad. Rajesh issued a personal cheque dated 8.10.2011 for Rs.50,000/-to Ajay for his share of profits. Subsequently, Rajesh was in pressing need of a hand loan which was given by Ajay for an amount of Rs.50,000/- on 15/12/2011. Rajesh failed to repay the loan amount within two months as promised. The cheque that Rajesh issued to Ajay for his business profit was dishonoured on two instances of presentment. Ajay issued a legal notice to Rajesh to which there was no reply. After 15 days of issuance of notice, Ajay filed a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881.

Issues Raised

Whether the amount paid to Ajay is a legally enforceable debt or not?

Whether the appellant is guilty of the wrongful dishonour of the cheque?

Body of Pleadings

1.That the amount paid to Ajay by Rajesh is a legally enforceable debt.

It is humbly submitted that the amount transacted by cheque is a legally enforceable debt and hence, as such, would attract the penal provision under section 138 of the Negotiable Instruments Act.

Section 138 of the Negotiable Instruments Act attracts strict liability of penal nature only. Strict liability of 138 can be enforced only when it is a case of discharge of a legally enforceable debt or liability3.

In common parlance, debt is something owed to another. A liability is an obligation, a chosen action which is capable of being assigned by creditor to some other person.

An amount covered by the cheque is the consideration amount covered by the cheque thereof. necessarily, it is the consideration towards magnum shares entrusted by the complainant to the accused for sale.

Where a person who was entrusted with the custody of a certain sale consideration issues a cheque to the beneficiary in lieu of such settlement, it is considered to be a legally recoverable debt/liability as under Section 138 of the Negotiable Instruments Act4.

3 Sam Daniel v john 2005 128 comp cas 174 Philip mk vs gainmore investment 2006 cri lj 3175 kerela

2. That the appellant is not guilty for wrongful dishonour of the cheque.

It is humbly submitted that the appellant herein is liable for the wrongful dishonour of the cheque no.09847 dated 8.10.2011.

Section 138 is attracted in case a cheque is issued by a person to another to wholly or partly discharge a debt or liability and the cheque is dishonoured by reason of funds being insufficient.

In the instant case, the cheque issued by the appellant to the respondent was in lieu of providing the respondent with his rightful share of profits of the joint business they were running. As submitted earlier, this is a legally recoverable debt within the explanation to Section 138. All the other criteria for fulfilling the ingredients of Section 138 are duly present. Namely, the cheque was presented to the bank within 6 months while it was a valid instrument. Notice of dishonour and demand for payment was made within the stipulated time of one month to the appellant but there was no payment nor response to such notice. Also, the reason for the dishonour on both the instances of presentment was the insuffiency of funds.

The Metropolitan Magistrate and the Hon’ble Sessions Court rightfully appreciated the same and passed the appropriate order. It is humbly submitted that the other transaction on fact file of the hand loan given by the respondent to the appellant is not connected with the instant matter. It is a separate and independent transaction for which there may be another legal course. It is in no way linked to these proceedings and in no way is a cause of action for this complaint.

Prayer

Wherefore in the light of the facts stated, issues presented, arguments advanced and

authorities cited, the counsel for the respondent humbly prays and implores this Hon’ble High

Court of Andhra Pradesh that it may be pleased to adjudge and declare:

That the amount transacted is a legally enforceable debt

That the order of the Sessions Court is to be upheld and that the appellant is guilty of

wrongful dishonour under section 138 of the Negotiable Instruments Act

And pass any order/orders this Hon’ble High Court may deem fit in the interest of justice,

equity and good conscience.

And for this act of kindness and grace, the Petitioner as in duty bound, shall forever pray in

gratitude.

Respectfully submitted on behalf of the respondent,

Sd-

Counsel for the respondent

Moot Problem 2

Documents

Transcript of Moot Problem 2