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Dishonoured cheque in void contract not legally enforceable

In  R.Parimala Bai v. Bhaskar Narasimhiah, the complaint was filed with respect to dishonour of a cheque issued for returning the amount collected by the accused as consideration for securing a job . The complainant alleged that he had paid a sum of ten lakhs rupees to the accused on his promise that he will secure job for the son of the complainant at HAL Factory. When the promise was not kept, the complainant demanded the amount back, and a cheque for rupees ten lakhs was issued by the accused, which got dishonoured for lack of sufficient funds, leading to filing of the complaint.

The accused opposed the complaint referring to judgments of the Supreme Court in Virender Singh v. Laxmi Narayain and Kuju Collieries Ltd v. Jharkhand Mines Ltd., which held that Sec. 138 NI Act was not attracted for dishonour of a cheque issued for recovery of bribe paid for securing job.

The High Court of Karnataka agreed with the arguments of the accused, and held that there was no legally enforceable debt as the underlying contract was void.  If an illegal consideration is relied upon by the complainant himself, then presumption under Section 139 of the Negotiable Instruments Act cannot be raised in the initial stages also. It is a well established principle of criminal law jurisprudence that, if on plain and meaningful reading of the FIR, the allegations made in the complaint or in the FIR do not constitute any offence or under any penal law for the time being in force, the continuation of such prosecution amounts to abuse of process of law


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