ICDS LIMITED Vs. BEENA SHABEER
LAWS(SC)-2002-8-5
SUPREME COURT OF INDIA (FROM: KERALA)
Decided on
August 12,2002
I.C.D.S. Ltd.
Appellant
VERSUS
Beena Shabeer And Anr.
Respondents
Referred Judgements :-
TAHER N. KHAMBATI V. VINAYAK ENTERPRISES [REFERRED]SREENIVASAN VS. STATE OF KERALA [OVERRULED]
Cited Judgements :-
V.RAVICHANDRAN VS. K.KANNAIAH [LAWS(CAL)-2016-6-116] [REFERRED TO]Mallappa Gangappa Halingali VS. Sri Basavaraj Murigeppa Gani [LAWS(KAR)-2013-10-139] [REFERRED TO]
K. J. THANKACHAN VS. K. M. GEORGE KATHANAPILLIL HOUSE [LAWS(KER)-2020-12-440] [REFERRED TO]
M/S MOHAN MEAKIN LIMITED VS. M/S SPIRIT AND BEVERAGES L-1 [LAWS(HPH)-2018-6-4] [REFERRED TO]
HEENA NARESH VS. SARITA NANDLAL [LAWS(BOM)-2008-8-94] [REFERRED TO]
RAM PRAKASH VS. AMITOSH MOITRA [LAWS(DLH)-2010-4-137] [REFERRED TO]
BONANZA PORTFOLIO LTD. VS. STATE OF ASSAM AND ORS. [LAWS(GAU)-2015-1-37] [REFERRED TO]
BONANZA PORTFOLIO LTD. VS. STATE OF ASSAM AND ORS. [LAWS(GAU)-2015-1-37] [REFERRED TO]
K VENUGOPAL, MANGALASSERIL VEEDU VS. P C USHADEVI, DEVI BHAVANAM [LAWS(KER)-2013-2-202] [REFERRED TO]
RAJASTHAN SMALL SCALE INDUSTRIES CORPN. LTD. VS. AGRAWAL ENTERPRISES [LAWS(RAJ)-2015-2-297] [REFERRED TO]
EVERISTO REMEDIO SEQUEIRA VS. SHAIK HASINA [LAWS(BOM)-2022-12-110] [REFERRED TO]
HANS KUMAR JAIN VS. RENU GANDOTRA [LAWS(DLH)-2015-3-48] [REFERRED TO]
ANIL SACHAR VS. SHREE NATH SPINNERS PVT. LTD [LAWS(P&H)-2008-12-25] [REFERRED TO]
KANYA DOKE VS. TONGOM JOMOH [LAWS(GAU)-2022-10-31] [REFERRED TO]
WILSON MATHEW VS. THE STATE NCT OF DELHI AND ORS. [LAWS(DLH)-2015-9-392] [REFERRED TO]
PRASAD RAYKAR S/O VIDYADHAR V. RAIKAR VS. B.T.DINESH S/O T.A.BHARAMAPPA [LAWS(KAR)-2023-1-12] [REFERRED TO]
PRADIP PATANGIA VS. TARULATA SAIKIA [LAWS(GAU)-2023-3-12] [REFERRED TO]
PRAJAPATI OIL INDUSTRY VS. STATE [LAWS(GJH)-2003-11-2] [REFERRED TO]
NOBEL T FRANCIS VS. SALEENA JOS [LAWS(KER)-2004-8-6] [REFERRED TO]
THOMAS KURUTHUKULANGARA PELLISSERY VS. MATHAI CHERUPADIYIL KURIAKOSE [LAWS(KER)-2007-3-539] [REFERRED TO]
VENKATESH BHAT A VS. ROHIDAS SHENOY [LAWS(KAR)-2009-8-27] [REFERRED TO]
G ASHOK KUMAR GOUD VS. P ANJALI BAI [LAWS(APH)-2012-1-92] [REFERRED TO]
R SUBBA RAO MANE VS. A S PRABHAKAR [LAWS(KAR)-2012-7-590] [REFERRED]
ICICI BANK LIMITED VS. UNIMERS INDIA LIMITED & ORS. [LAWS(BOM)-2016-3-8] [REFERRED TO]
RAJENDRA BABURAO MAHALE VS. VARSHA MAHESH DANGAREKAR [LAWS(BOM)-2013-2-160] [REFERRED TO]
MAHARASHTRA STATE SEEDS CORPORATION LIMITED VS. NAGORAO RAGHUNATH JIBHKATE [LAWS(BOM)-2012-7-64] [REFERRED TO]
PANDURANG SAHADU GUNJAL VS. BABULAL MANAKCHAND KOTHARI [LAWS(BOM)-2009-12-69] [REFERRED TO]
SANDEEP KHANNA AND ANR. VS. STATE AND ORS. [LAWS(DLH)-2010-8-368] [REFERRED TO]
GUJARAT OLEO CHEM. LTD VS. STATE [LAWS(DLH)-2009-12-225] [REFERRED TO]
RAMANEE NARAYANAN VS. C.K.MUKUNDAN [LAWS(KER)-2016-8-16] [REFERRED TO]
QUEPEM URBAN CO-OP CREDIT SOCIETY VS. PIADADE NORONHA D SILVA DAUGHTER OF LATE ASSIS NORONHA [LAWS(BOM)-2018-1-188] [REFERRED TO]
D NAPOLEAN VS. M V M TRADERS [LAWS(MAD)-2018-9-371] [REFERRED TO]
K S BAKSHI VS. STATE OF DELHI [LAWS(DLH)-2007-11-37] [REFERRED TO]
C.PREMARAJAN VS. DR.V.C.HAMSATH [LAWS(KER)-2016-3-143] [REFERRED TO]
SHAIKH FAROOQ S/O. SHAIKH AMIR BAGWAN VS. SHAIKH RAFIQ S/O. SHAIKH AYYUB [LAWS(BOM)-2016-9-43] [REFERRED TO]
PRABHAKAR SHRIPATI HEGDE VS. B V NAIK [LAWS(KAR)-2018-3-314] [REFERRED TO]
AJITBHAI ISHWARBHAI PATEL VS. STATE OF GUJARAT [LAWS(GJH)-2010-2-294] [REFERRED TO]
POONAM VS. KOTAK MAHINDRA BANK LTD. [LAWS(DLH)-2012-1-567] [REFERRED TO]
PITTALA SUBRAMANYAM VS. STATE OF A P [LAWS(APH)-2007-12-9] [REFERRED TO]
SHREE HARI AGRO INDUSTRIES LTD VS. DEEPAK VEGPRO PRIVATE LIMITED [LAWS(CAL)-2015-9-93] [REFERRED]
ANIL SACHAR VS. SHREE NATH SPINNERS P LTD [LAWS(SC)-2011-7-82] [REFERRED TO]
MOHANA PAI VS. JABBAR [LAWS(KER)-2004-6-3] [REFERRED TO]
RANBIR SINGH VS. NAVNEET CHAUHAN [LAWS(P&H)-2023-9-2] [REFERRED TO]
BETHAL PRODUCTS (INDIA) VS. JAYAKUMAR DIRECTOR M/S. ORGANIC GOLD PVT. LTD. [LAWS(KAR)-2020-11-305] [REFERRED TO]
KIRTI PREMRAAJ JAIN VS. MOSER BAER CLEAN ENERGY LTD. & ANR. [LAWS(DLH)-2017-1-134] [REFERRED TO]
SAHEB SINGH VS. STATE [LAWS(DLH)-2008-1-168] [REFERRED TO]
JOSEPH VS. TOMI ANTONY [LAWS(KER)-2013-9-121] [REFERRED]
HONAVAR TALUKA PRIMARY CO-OPERATIVE AGRICULTURAL A VS. GANESH S/O SATYANARAYAN BHAT [LAWS(KAR)-2018-3-181] [REFERRED TO]
K V MUNIYAPPA VS. B N NAND [LAWS(KAR)-2012-6-97] [REFERRED TO]
MANDADI RAM REDDY VS. STATE OF ANDHRA PRADESH [LAWS(APH)-2003-1-72] [REFERRED TO]
B RAJA KRISHNAJI VS. KADAM KONDOJI [LAWS(APH)-2007-12-58] [REFERRED TO]
R. CHENNAKESAVA RAO VS. P. LAXMI NARASAIAH [LAWS(APH)-2017-6-45] [REFERRED TO]
KONGALA RAMANJANEYULU VS. I.G.CHIRANJEEVA RAO [LAWS(APH)-2023-3-14] [REFERRED TO]
KRISH INTERNATIONAL P.LTD VS. STATE [LAWS(DLH)-2013-1-277] [REFERRED TO]
ARVIND KUMAR VS. STATE OF BIHAR [LAWS(PAT)-2013-7-188] [REFERRED TO]
ARUMUGHAN PILLAI VS. STATE OF KERALA [LAWS(KER)-2005-6-39] [REFERRED TO]
JAMMU & KASHMIR BANK VS. ABHISHEK MITTAL [LAWS(DLH)-2011-5-298] [REFERRED TO]
JAMMU AND KASHMIR BANK (M/S.) VS. ABISHEK MITTAL [LAWS(DLH)-2012-5-762] [REFERRED TO]
VED PRAKASH VS. K. LAL & SONS PVT. LTD. AND ORS. [LAWS(RAJ)-2014-5-277] [REFERRED TO]
SANKAR BISWAS VS. STATE OF ASSAM [LAWS(GAU)-2019-7-13] [REFERRED TO]
SCALE INDUSTRIES DEVELOPMENT CORPORATION LTD VS. SAMUDRA ROPES PVT. LTD [LAWS(BOM)-2005-6-187] [REFERRED TO]
LAXMINIVAS AGRAWAL VS. ANDHRA SEMI CONDUCTORS PVT LTD [LAWS(APH)-2005-12-27] [REFERRED TO]
CHITTULURI VENKATA SUBRAMANYA RAJARAM VS. KOTAGIRI SHIVANI AND ANOTHER [LAWS(APH)-2018-6-40] [REFERRED TO]
A SAKTHIVEL VS. K R NAVANEETHA KRISHNAN [LAWS(MAD)-2011-4-235] [REFERRED TO]
Sovereign Developers and Infrastructure Ltd., Rep. by Director, Deepak Kumar, Mr. Deepak Kumar Director and Mr. Prakaash Kumar Singh Director, All at M/s. Sovereign Developers and Infrastructure Ltd. A Company registered under The Indian Companies Act, 19 VS. [LAWS(KAR)-2012-3-218] [REFERRED TO]
JOSEPH VILANGADAN VS. PHENOMENAL HEALTH CARE SERVICES LTD [LAWS(BOM)-2010-7-178] [RELIED TO]
URBAN CO OP CREDIT SOC THRO ITS MANAGAER JAYRAJBHAI VS. STATE OF GUJARAT [LAWS(GJH)-2003-3-42] [REFERRED]
SANAL KUMAR VS. RAJEEV KUMAR [LAWS(KER)-2003-2-54] [REFERRED TO]
TOM VARGHESH VS. JHON K JHON [LAWS(KER)-2005-8-17] [REFERRED TO]
ASHESH DEVENDRABHAI VYAS AND ORS. VS. STATE OF DELHI AND ORS. [LAWS(DLH)-2015-5-499] [REFERRED TO]
C. DEVARAJU VS. M. GOPALAPPA [LAWS(KAR)-2021-4-62] [REFERRED TO]
THE QUEPEM URBAN CO VS. MR. SEBY NORONHA, SON OF LATE ASSIS NORONHA [LAWS(BOM)-2018-1-363] [REFERRED TO]
SHIVANI TYAGI VS. STATE OF U.P. AND 4 OTHERS [LAWS(ALL)-2016-4-241] [REFERRED TO]
LAKSHMI PRABHAKAR VS. SATYA VENKATA SRINIVASA [LAWS(APH)-2013-6-52] [REFERRED TO]
A REKHA BAI VS. STATE OF ANDHRA PRADESH [LAWS(APH)-2010-3-101] [REFERRED]
BABA CORPORATE VS. V. NARAYANA MURTHY [LAWS(KAR)-2015-1-136] [REFERRED TO]
KANORIA INDUSTRIES LTD VS. VENKATESH TRADERS PROPRIETOR [LAWS(KAR)-2018-3-196] [REFERRED TO]
Pothedar Siddaiah, Since Deceased By His Lr. H.S. Ramesh VS. Mahesh [LAWS(KAR)-2012-9-195] [REFERRED TO]
HARYANA PETROCHEMICALS LTD. VS. INDIAN PETROCHEMICALS LTD. [LAWS(DLH)-2014-12-186] [REFERRED TO]
FOUR SEASONS ENERGY VENTURES PVT LTD VS. STATE OF NCT OF DELHI [LAWS(DLH)-2012-7-38] [REFERRED TO]
HARYANA PETROCHEMICALS LTD. VS. INDIAN PETROCHEMICALS LTD. [LAWS(DLH)-2014-10-90] [REFERRED TO]
NARENDRA ANANTSING KACHAVE VS. STATE OF MAHARASHTRA [LAWS(BOM)-2006-12-153] [REFERRED TO]
KARTIK RAJESH SHARMA VS. HDFC BANK LTD [LAWS(BOM)-2009-11-80] [REFERRED TO]
BALAJI AGENCIES PVT LTD VS. VILAS BAGI OF BAGI PACKAGES LTD [LAWS(BOM)-2008-6-137] [REFERRED TO]
NIKHIL P GANDHI VS. STATE OF GUJARAT [LAWS(GJH)-2016-6-110] [REFERRED TO]
MOIDEEN VS. JOHNY [LAWS(KER)-2006-5-2] [REFERRED TO]
HAJIRA BEGUMW VS. BINO THOMAS MANAGING DIRECTOR [LAWS(KER)-2007-3-314] [REFERRED TO]
GENERAL AUTO SALES VS. VIJAYALAKSHMI D PROPRIETRY [LAWS(KER)-2004-8-51] [REFERRED TO]
SAROJ AGRAWAL VS. M.P. FINANCE DEPARTMENT CORPORATION [LAWS(CHH)-2003-12-12] [REFERRED TO]
NOPANY EDUCATION TRUST VS. STATE [LAWS(CAL)-2013-11-59] [REFERRED TO]
S V FINANCE VS. PARAMASIVAM [LAWS(MAD)-2010-6-197] [REFERRED TO]
SHIVAKUMAR S K VS. MAGESH SHANKAR C P [LAWS(KAR)-2022-4-28] [REFERRED TO]
MOHANACHANDRAN NAIR VS. P C CHERIYAN [LAWS(KER)-2012-8-414] [REFERRED TO]
DILIPKUMAR NALINKANT GANDHI VS. STATE OF GUJARAT & 2 ORS [LAWS(GJH)-2015-7-217] [REFERRED]
PHILOMENA REBELLO VS. MARIA TEREZA PINTO [LAWS(BOM)-2009-3-138] [REFERRED TO]
GOA HANDICRAFTS RURAL and SMALL SCALE INDUSTRIES DEVELOPMENT CORPORATION LTD VS. SAMUDRA ROPES PVT LTD [LAWS(BOM)-2005-6-46] [REFERRED TO]
MADHUKAR V DESSAI VS. SHAIKH ABDUL RIYAZ [LAWS(BOM)-2006-11-127] [REFERRED TO]
SAI AUTO AGENCIES VS. SHEIKH YUSUF SHEIKH UMAR [LAWS(BOM)-2010-2-21] [REFERRED TO]
U K RAJAH VS. V RAMANATHAN [LAWS(MAD)-2003-3-257] [REFERRED TO]
ASSOO HAJEE VS. K I ABDUL LATHEEF [LAWS(KER)-2004-6-63] [REFERRED TO]
Hongkong and Shanghai Banking Corporation Ltd., through authorized representative, Mr. Manoj Puroshottam Paradkar VS. Lisa Apparels Pvt. Ltd., r/by its Managing Director Mr. R. Subrahmanyam Iyer, Mr. R. Subrahmanyam Iyer S/o V. Ragavan Iyer and [LAWS(KAR)-2010-7-62] [REFERRED TO]
YAKOOB KHAN VS. PRADEEP SHRIMAL [LAWS(MPH)-2011-3-70] [REFERRED TO]
CREDENTIAL LEASING & CREDITS LTD. VS. SHRUTI INVESTMENTS AND ORS. [LAWS(DLH)-2015-6-17] [REFERRED TO]
LAILA FINANCE LTD VS. S A ENGINEERING SERVICES [LAWS(APH)-2012-1-44] [REFERRED TO]
HONEY BHAGAT VS. PRALEEN CHOPRA [LAWS(DLH)-2017-9-58] [REFERRED TO]
RAMESHWAR DASS DEVI DAYAL P LTD VS. CONSOLIDATED STEELS AND ALLOYS LTD [LAWS(DLH)-2006-10-55] [REFERRED TO]
BAGAYATDAR URBAN CO-OPERATIVE CREDIT SOCIETY LTD VS. VERNON VAZ [LAWS(BOM)-2012-9-84] [REFERRED TO]
GEORGE S/O CHANAYIL ANTONY VS. KAMARUDHEEN [LAWS(KER)-2006-12-70] [REFERRED TO]
ANEETA HADA VS. GODFATHER TRAVELS ALIAS TOURS PVT LTD [LAWS(SC)-2012-4-31] [REFERRED TO]
DRUGS INSPECTOR VS. FIZIKEM LABORATORIES PVT LTD [LAWS(SC)-2008-3-224] [REFERRED TO]
JUDGEMENT
Banerjee, J. -
(1.)Leave granted.
(2.)A short but an interesting question falls for consideration in this appeal to the effect as to the maintainability of a proceeding under Section 138 of the Negotiable Instruments Act, 1881, vis-a-vis a guarantor. The High Court negated it and hence the matter before this Court under Article 136 of the Constitution. In order, however, to appreciate the contentions raised in the matter, it would be worthwhile at this juncture to notice Section 138 for its true terms, scope and effect as also to assess the situation ourselves. Section 138 of the Negotiable Instruments Act, 1881 reads as below :
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both :
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.- For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability."
(3.)It is on the basis of the provision as above, the High Court came to a conclusion when a cheque was issued as security, no complaint will lie under Section 138 of the Act since the cheque issued cannot be said to be for the purpose of discharging any debt or liability. In justification of the said conclusion the High Court records the following reasons :
"Reading of the above Section would make it clear that issuance of a cheque must be for payment of amount of money from out of the account. In the case of a guarantor or surety, even if a cheque is issued, that cannot be said to be for immediate payment of money : Section 138 of the Act further says that issuance of cheque to another person is towards discharge, in whole or in part of any debt or other liability."
(2.)A short but an interesting question falls for consideration in this appeal to the effect as to the maintainability of a proceeding under Section 138 of the Negotiable Instruments Act, 1881, vis-a-vis a guarantor. The High Court negated it and hence the matter before this Court under Article 136 of the Constitution. In order, however, to appreciate the contentions raised in the matter, it would be worthwhile at this juncture to notice Section 138 for its true terms, scope and effect as also to assess the situation ourselves. Section 138 of the Negotiable Instruments Act, 1881 reads as below :
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both :
Provided that nothing contained in this section shall apply unless-
(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.
(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid, and
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation.- For the purpose of this section, "debt or other liability" means a legally enforceable debt or other liability."
(3.)It is on the basis of the provision as above, the High Court came to a conclusion when a cheque was issued as security, no complaint will lie under Section 138 of the Act since the cheque issued cannot be said to be for the purpose of discharging any debt or liability. In justification of the said conclusion the High Court records the following reasons :
"Reading of the above Section would make it clear that issuance of a cheque must be for payment of amount of money from out of the account. In the case of a guarantor or surety, even if a cheque is issued, that cannot be said to be for immediate payment of money : Section 138 of the Act further says that issuance of cheque to another person is towards discharge, in whole or in part of any debt or other liability."
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