The Punjab and Haryana High Court recently ruled that a bribe amount does not constitute as a legally enforceable liability under the Negotiable Instruments (NI) Act as the same involves an illegal and immoral transaction [Surinder Singh v. Ram Dev].
Justice Manjari Nehru Kaul explained that under Section 138 of the NI Act, the mere issuance of a cheque does not constitute an offence unless it is proven that the cheque was issued for the discharge of a debt or liability that is legally enforceable.
“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.”
The Court was hearing an appeal against the acquittal of accused Ram Dev in a cheque bounce case.
It was complainant Surinder Singh’s case that Dev, in collusion with his brother-in-law Amandeep and others, had deceived him by providing a false assurance that if he paid ₹12 lakh to Amandeep, he would secure employment for certain individuals in the Punjab Police.
The amount had allegedly been given to Amandeep later. After no such appointments happened, an FIR was filed in 2016 against Amandeep and others for cheating and criminal conspiracy.
However, Dev later proposed a settlement under which he issued a cheque for ₹1 lakh in favour of Singh. However, the same was dishonoured by the bank, and Dev’s account had been closed.
Since Dev failed to remit the cheque amount despite a legal notice, Singh filed a complaint under NI Act. However, the trial court rejected it on the ground that the cheque amount represented a bribe.
In appeal, Singh’s counsel argued that once Dev had admitted to having taken a bribe and subsequently compromised the matter, it should have been construed as a legally enforceable debt or liability given his acknowledgment of receiving the sum.
It was also submitted that Dev did not dispute the execution of the cheque, nor did he deny his signature or handwriting on the instrument.
However, the High Court said that since the cheque involved repayment of a bribe amount, it cannot be deemed to have been issued in discharge of a legally enforceable debt or liability.
“Thus, the learned trial Court correctly concluded 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,” it added.
Thus, the Court upheld Dev’s acquittal and dismissed the appeal.
Advocate Ramesh Kumar Jha represented Dev.
[Read Judgment]