On 20th September 2024, the Delhi High Court ruled within the case of Anil Kulshrestha vs. FIITJEE Ltd., concerning a complaint beneath Segment 138 of the Debatable Rebellious Act (NI Act). The complaint was recorded after two cheques issued by Kulshrestha, who was utilized as an Right hand Teacher at FIITJEE, were dishonored upon introduction.
Case Details
FIITJEE claimed that Kulshrestha signed a Service Contract Manual, which included terms obligating him to provide security cheques. These cheques were issued for ₹2,92,800 and ₹8,47,200, meant to cover potential damages if he breached the contract. The checks were deposited by FIITJEE after Kulshrestha reportedly broke the agreement by neglecting to report for work starting in October 2022.
However, the checks were later returned with the notation, "Payment Stopped by Drawer." After that, FIITJEE sent out a legal notice, to which no response was received. As a result, a criminal complaint was filed in accordance with Section 138 of the NI Act. After receiving the complaint, the magistrate called Kulshrestha.
Petitioner's Argument
Kulshrestha argued that the cheques were issued as security, not against any legally enforceable debt, making the complaint invalid. He also claimed the service contract was signed under undue influence, and that the summoning order was passed without proper consideration of the facts.
Court's Ruling
The Court upheld the summons, noting that whether the cheques were issued as security is a factual defense to be determined during the trial. The Court emphasized that legal presumptions under Section 138 support the complainant, and such disputes should be resolved through evidence in court, not at the preliminary stage.
Conclusion
The petition was dismissed, allowing the trial to proceed, with the Court reiterating that factual defenses cannot quash a Section 138 complaint at an early stage.
Click Here to: Download/View Related File
TAGS: Delhi High Court Anil Kulshrestha FIITJEE Ltd. Section 138 Negotiable Instruments Act dishonored cheques security cheques service contract legal notice summoning order breach of contract.
