KRISHNA TRADING CO. Vs. TAWI FOOD PVT. LTD.

JUDGEMENT

(1.) PETITIONERS have filed this petition seeking quashing of proceedings initiated by Judicial Magistrate, 1st Class (Sub-Judge), Jammu on respondent's complaint under Section 138 of the Negotiable Instruments Act. 1881, on the ground that the cheque issued by Krishna Trading Company in favour of Tawi Food Products Private Limited, Jammu for an amount of Rs. 87,000/- had not been so issued to discharge any existing liability and proceedings initiated by learned Judicial Magistrate, 1st Class (Sub-Judge), Jammu on M/s. Tawi Food Products Private Limited, Jammu's complaint under Section 138 of the Negotiable Instruments Act alleging closure of account by the petitioners despite issuance of cheque, was an abuse of the process of Court.

(2.) PETITIONERS ' Counsel Mr. Sethi submitted that the cheque issued by the petitioners had not been so issued to discharge any existing liability and had rather been issued only by way of security to act as respondents' super-stockists for the goods manufactured by them, so no proceedings on dishonour of cheque presented despite petitioners' caution to the respondents, not to present it for payment, could in law be initiated on respondents' complaint, by the learned Judicial Magistrate.

(3.) REFERRING to Modi Cements Ltd. v. Kuchil Kumar Nandi, I (1999) CCR 44 (SC)(1998) 3 SCC 249,complainant's Counsel submitted that petitioners' avoidance of making payment, covered by the cheque, in informing the Bank to stop payment before presentation of cheque would not absolve them of the liability which they had incurred under the provisions of the Negotiable Instruments Act, 1881.