Bribe Payments Do Not Constitute Legally Enforceable Liabilities Under Negotiable Instruments Act: Punjab & Haryana HC
The Punjab and Haryana High Court ruled that a payment made as bribe cannot be considered a legally enforceable liability under the Negotiable Instruments (NI) Act, due to the inherent illegality and immorality of such transactions.
The Court was addressing an appeal against the acquittal of the accused in a cheque bounce case. The complainant alleged that accused, in collusion with his brother-in-law and others, had misled him by promising that if he paid ₹12 lakh to his brother-in-law, he would secure jobs for certain individuals in the Punjab Police. He claimed that he later transferred the money, but when no appointments materialized, he filed a First Information Report (FIR) in 2016, accusing them of cheating and criminal conspiracy.
Subsequently, they proposed a settlement, issuing a cheque for ₹1 lakh to complainant. However, this cheque was dishonoured because accused’s bank account had been closed. After he failed to respond to a legal notice regarding the bounced cheque, complainant lodged a complaint under the NI Act. The trial court dismissed this complaint, ruling that the cheque amount represented a bribe.
A Bench of Justice Manjari Nehru Kaul clarified that, according to Section 138 of the NI Act, simply issuing a cheque does not constitute an offence unless it is shown that the cheque was issued for the purpose of discharging a legally enforceable debt or liability. It stated, “It is well-settled law that any debt or liability arising from a contract or promise that is unlawful, immoral, or not legally enforceable does not attract the provisions of Section 138 of the Act. A payment made as a bribe, being an illegal and immoral transaction, does not constitute a legally enforceable liability.”
Advocate Ramesh Kumar Jha appeared for the Petitioner.
On appeal, complainant’s counsel argued that since accused had acknowledged taking a bribe and later sought to settle the matter, this should be viewed as a legally enforceable debt or liability. Furthermore, it was noted that accused did not contest the execution of the cheque or dispute his signature on it.
However, the High Court maintained that because the cheque was tied to the repayment of a bribe, it could not be regarded as being issued to settle a legally enforceable debt or liability. The Court concluded, "Thus, the learned trial court correctly determined that no legally enforceable debt existed in this case, and the cheque issued in furtherance of an unlawful act cannot give rise to criminal liability under the Negotiable Instruments Act."
As a result, the High Court upheld acquittal and dismissed the appeal.
Cause Title: Surinder Singh v. Ram Dev, [2024:PHHC:135884]