Cheque Dishonour and S.138 of N.I. Act in Property Transaction

Cheque Dishonour and S.138 of N.I. Act in Property Transaction

Section 138 - Property Transactions and Cheque Dishonour - Lease Transactions -  Use of Property -  C was owner of premises - C appointed D as attorney  and entered into a lease agreement with accused A - A issued post dated cheques - Property got sealed - Cheque got dishonoured - The learned Magistrate had held that, since the cheques in question had been received by the complainants in advance at the time of execution of the lease deeds and the property could not be used for the intended purpose, the dishonour of the cheques in question would not entail an action under Section 138 of the NI Act - Held, Section 108 of the Transfer of Property Act deals with the aspect of rights and liabilities of lessor and lessee - Rights and liabilities of the lessee are enumerated from clause (d) onwards upto clause (q) - The advance cheques issued towards payment of rent when deposited for realization of the rent for the said period were dishonoured upon presentation. "A" incurred the liability to pay the rent as they continued to retain possession even though the same had been sealed by the municipal authorities - "A" continued to remain tenants and incurred the liability to pay - After discussing clauses of lease agreement, explaining impact of sealing of property on prosecution under S.138 of NI, Act, 1881, conviction held to be justified - Acquittal set aside.  - Sangeeta Batra v. VND Foods [2015] GCtR 5134 (Delhi)