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1994 DIGILAW 902 (RAJ)

Kalyan Sundaram Cement Industries Ltd. v. State of Rajasthan

1994-11-16

P.P.NAOLEKAR

body1994
JUDGMENT 1. - Petitioner No. 1 M/s. Kalyan Sundram Cement Industries Limited is a company registered under the provisions of the Companies Act, 1956. The petitioner No. 2 Sanjay Modi is one of the Directors of the petitioner company. The State of Rajasthan, respondent No. 1, filed a civil suit in the Court of District judge, Bikaner for the recovery of the amount of Rs. 73,89,257/- with interest. The civil suit is registered as Suit No. 177 of 1990, State of Rajasthan v. Kalyan Sundram Cement Industries Limited & Ors. . The suit was filed on the allegations that the State required cement for the construction of Indira Gandhi Nahar Pariyojna. It had invited tenders and the petitioner's tender for supply of cement was accepted with certain conditions. The 4, agreement to that effect was executed on 13.4.1989. Under the agreement, the respondent to State had advanced Rs. 50,61,300 / - to the petitioner on the security of the petitioner No. 1, on the collateral security of petitioner's plant and machineries and on execution of the indemnity bond to the effect that the advance amount shall be adjusted against the price ,N4 of the cement supplied by the petitioner company every month. It was also agreed that three post dated cheques for the amount of Rs. 16,87,100/- each shall be given by the petitioner and those cheques shall be en-cashed if the cement is not supplied every month in accordance with the terms of the agreement to the respondent State. It was also agreed that the cement is to be supplied by the company every month and on its failure to supply the cement, the total amount of advance of Rs. 50,61,300 / - or the balance amount after the adjustment shall be recovered from the security furnished by the petitioner No. 1 or from the post dated cheques. According to the agreement, the petitioner has issued three post dated cheques to be en-cashed on 12.5.1989, 12.6.1989 and 12.7.1989. However, no cement was supplied to the respondent No. 1 within the time stipulated under the contract and the State is entitled to receive that amount under the contract from the petitioners. According to the agreement, the petitioner has issued three post dated cheques to be en-cashed on 12.5.1989, 12.6.1989 and 12.7.1989. However, no cement was supplied to the respondent No. 1 within the time stipulated under the contract and the State is entitled to receive that amount under the contract from the petitioners. It was further alleged in the plaint that when the cheques were presented before the Bank, the Bank refused to en-cash them and returned them with the remarks "Refer to drawer", which according to the banking practice, that there was no sufficient amount available in the bank account of the petitioner to honour the cheque. The State has given notice for the payment of the amount and later on a complaint was filed under section 138 of the Negotiable Instruments Act and Section 420 IPC before the Court of Additional Chief Judicial Magistrate, Bikaner. 2. The State has also filed criminal complaints that the agreement was executed by the petitioners for supply of the cement and as per the agreement three post dated cheques for Rs. 16,87,100/- each were issued in favour of respondent No. 1, State. The amount under the cheque was to be adjusted against the price of the cement to be supplied under the agreement, which was not being supplied to the State. The petitioner company had not supplied the cement within the period stipulated and when the cheques were presented before the Bank on due dates through the Treasury, Bikaner, the bank dis-honoured the cheques with the endorsement, "Refer to drawer". The petitioner has not paid the amount under the cheque in spite of the notice issued; that the petitioners from the very beginning had an intention not to make the payment of the cheques and accordingly have not made the payment. The petitioners have committed an offence under section 138 of the Negotiable Instruments Act and under sections 420 & 120-B IPC. The petitioners have committed an offence under section 138 of the Negotiable Instruments Act and under sections 420 & 120-B IPC. It is further alleged that all the accused persons right from the beginning conspired together and they were quite aware that they are not in a position to supply the cement still with the full knowledge to get the amount of Rs 50,61,300/- from the State, they have issued three post dated cheques when the knew that the cheques will not be honoured or it is not possible to honour the cheques and by that way with the dis-honest intention, they have cheated the respondent State and obtained the amount of Rs. 50,61,300/- as advance. This constitute an offence punishable under sections 420 & 120-B IPC. 3. The petitioners moved an application under section 151 CPC before the Civil Court for staying of the proceedings in the civil suit on the ground that the written statement requires to be filed by them will pre-judicially affect their right of defence. The trial Court has rejected their application on the ground that the facts required to be proved in the civil suit and the criminal case are quite different and the petitioners' defence will not be pre-judicially affected neither it will be an embarrassment to the petitioners while conducting their defence. Aggrieved by that order, the petitioners have filed this petition. 4. In my opinion, the trial Court was not right in rejecting the application of the petitioners for stay of the civil proceedings. 5. It is no doubt true that there cannot be any absolute proposition of law that whenever a civil proceeding is pending between the parties, criminal proceedings can never be proceeded with. There are many transactions which results in civil as well as criminal liabilities. Therefore, simply because civil proceedings between the parties are pending, it cannot be said that the proceedings before the criminal Court cannot go on. The question which really requires consideration is whether the simultaneous prosecution of the criminal proceedings and the civil suit will embarrass the accused in his defence. 6. Therefore, simply because civil proceedings between the parties are pending, it cannot be said that the proceedings before the criminal Court cannot go on. The question which really requires consideration is whether the simultaneous prosecution of the criminal proceedings and the civil suit will embarrass the accused in his defence. 6. The allegations made in the plaint are that there was a contract between the parties where under certain amount had been advanced by the State to the petitioner for the supply of particular quantity of cement within three months and to secure the advance made to the petitioner, the State has taken post dated cheques with a condition to appropriate them on non-supply of the cement as stipulated under the contract. The facts in the criminal complaint also are that the advance was made under the agreement with the condition that the cement shall be supplied within the stipulated time and that it was from the very beginning intention of the petitioner not to honour the cheque whenever they are presented. The civil suit for the recovery of the amount and the facts narrated in the criminal complaint are practically same and based upon the terms of the agreement entered between the parties. The petitioner shall be either required to accept the allegations made in the plaint or to deny them. As the basic facts in the criminal complaint and the civil suit are the same, the admission or denial in the written statement will tentamount to a pre-disclosing of the petitioners /accused's defence in a criminal trial. Basically, in a criminal case, it is for the prosecution to prove the facts and the guilt thereupon and thereafter the stage of accused defence come in after the recording of the statement under section 313 Cr.P.C. But if he is required to file a written statement disclosing his defence to the similar facts, it will certainly prejudice his right in a criminal trial and that will be an enbarassment to the accused. 7. In the fitness of things, I direct that the proceedings in the civil suit shall remain stayed till the accused-petitioners are examined under section 313 Cr.P.C. 8. 7. In the fitness of things, I direct that the proceedings in the civil suit shall remain stayed till the accused-petitioners are examined under section 313 Cr.P.C. 8. Consequently, this revision petition is allowed, the order of the learned District Judge dated 14.1.1994 is set aside and the proceedings in the civil suit No. 177/90 are stayed till the accused persons are examined under section 313 Cr.P.C. It is expected that the criminal proceedings in the matter shall be taken up by the Judge concerned on priority basis as it is not in the interest of the general public that the criminal prosecution is delayed so that every body concerned has forgotten about the crime. This matter has to be given precedence looking to the facts and circumstances of this case.Revision allowed. *******