Negotiable Instruments Act. Sections 138 & 139. “Debt or other liability” includes dues from any other person and not confined to debt or liability of the drawer himself. It even covers any other person’s debt or liability. Law on the point discussed. Karnataka High Court.

M/s. Bethal Products (India) vs Jayakumar and another. Criminal Appeal 1060/2010 decided on 19 November 2020.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/349771/1/CRLA1060-10-19-11-2020.pdf

Relevant paragraphs: 18. (Facts) The other contention of the accused is that the subject matter of the said cheque is not issued for legally recoverable debt. reason that they have not disputed the issuance of cheque and also no dispute with regard to the fact that there was no transaction between the complainant and the accused Company. However, it is the specific case of the complainant that in order to discharge the liability of M/s.IGSL in which accused Nos.1 and 2 are the Directors, have issued the cheque.

21 Decision of the Madras High Court in Madras High Court in the case of P.R.Shankar Rao vs. Joseph and Joseph Regis Kalingarayar, reported in 2001 Crl.L.J.2392 perused….”the debt or other liability includes the due from any other person. It is not necessary that the debt or liability should be due from the drawer himself. It can be issued for the discharge of any other man’s debt or liability. Legally enforceable debt or liability would have a reference to the nature of the debt or liability and not the person against whom the debt or liability can be enforced.”

23 & 24. The judgment in ICDS Ltd. vs. Beena Shabeer and another reported in (2002)6 SCC 426 perused. ….The language of the statute depicts the intent of the law- makers to the effect that wherever there is a default on the part of one in favour of another and in the event a cheque is issued in discharge of any debt or other liability, there cannot be any restriction or embargo in the matter of application of the provisions of Section 138 of the Act. It is further observed that “any cheque” and “other liability” are the two key expressions which stand as clarifying the legislative intent so as to bring factual context within the ambit of the provisions of the statute.

25. Having considered the principles laid down in the judgment, the factual aspects of the case and legal effect, it is clear that the Court has to see the wisdom of the legislature in bringing the enactment and while interpreting the law, the Court has to take note of the object and statement in bringing the enactment and the courts are meant to interpret the law with the object of special enactment. APPEAL ALLOWED.

Compiled by S. Basavaraj, Advocate, Daksha Legal.