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2002 DIGILAW 835 (AP)

E. v. RAMANARASAIAH VS G. GNANESWAR

2002-07-05

S.R.K.PRASAD

body2002
S. R. K. PRASAD, J. ( 1 ) THE petitioners who are A1 and A2 in CC No. 566 of 1998 on the file of xv Metropolitan Magistrate, City Criminal courts, Hyderabad, invoke the inherent powers of this Court under Section 482 cr. PC to quash the proceedings. ( 2 ) A brief resume of background of facts is necessary. 1st respondent and his brother were running a brick manufacturing factory under the name and style of M/s. Swati Clay Products, at Anantharam Village, in Nalgonda District. 1st petitioner is a lecturer in S. V. S. College, Osmania university and 2nd petitioner is his wife. Both of them along with their son are also running a school under the name Mother public School. 1st respondent offered to sell the above clay factory and clear the liability with bank and on the strength of collateral security given the documents were got released. The petitioners took possession of the Swati Clay Factory and changed the name to Ajantha Clay Products. An agreement was obtained in the name of the 2nd petitioner herein. In the year May, 1996 allahabad Bank filed a claim petition before the Debt Recovery Tribunal for recovery of rs. 38,00,000/- and when the 1st respondent went to the factory premises and found that the entire plant and machinery together with lorry bearing No. APIO/t. 1068 were removed from the premises. As there is an agreement in between the 2nd petitioner and the 1st respondent and his brother, they have impleaded the 2nd petitioner before the Debt Recovery Tribunal. 1st petitioner offered to have a compromise in between the 2nd petitioner and 1st respondent and his brother which was reduced into writing. It was specifically agreed that the petitioner pay Rs. 6 lakhs to 1st respondent and his brother and issued three post dated cheques for Rs. 3,00,000/-, Rs. 2,00,000/- and Rs. 1,00,000/- drawn at Trinity Urban co-operative Bank Limited. Out of the three cheques, Cheque No. 016866 dated 20-4-1998 is said to have been returned for want of sufficient funds. Thereafter, a complaint was filed before the XV Metropolitan magistrate, Hyderabad and the same was registered as CC No. 566/98. The petitioners filed Crl. MP No. 7035 of 1999 before the learned Magistrate seeking for discharge. The learned Magistrate dismissed the application. Thereafter, a complaint was filed before the XV Metropolitan magistrate, Hyderabad and the same was registered as CC No. 566/98. The petitioners filed Crl. MP No. 7035 of 1999 before the learned Magistrate seeking for discharge. The learned Magistrate dismissed the application. ( 3 ) AGGRIEVED by the same, the petitioners filed the present criminal petition to quash the proceedings under Section 482 cr. PC. ( 4 ) THE learned Counsel for the petitioners assails the order in CC No. 566 of 1998 on the ground that necessary details are not mentioned in the complaint in respect of issuing of notice, dishonouring of cheque etc. , and therefore, the complaint is not maintainable. It is also further contended that A2 did not issue any cheque and she cannot be prosecuted. He further contends that A1 has not received any notice and sufficient compliance has not been made in respect of Section 138 of ni Act. The learned Counsel for the 1st respondent contends that the details need not be mentioned in the complaint. He further contends that since the Magistrate has found a prima facie case against the petitioners, the complaint is maintainable and it is not a fit case to exercise the inherent powers of this Court. The learned Public Prosecutor contends that A2 is not the drawer of the cheque and case cannot be proceeded against her. ( 5 ) ADVERTING to the said contentions, Section 138 of NI Act reads as follows: 138. Dishonour of cheque for insufficiency etc. The learned Public Prosecutor contends that A2 is not the drawer of the cheque and case cannot be proceeded against her. ( 5 ) ADVERTING to the said contentions, Section 138 of NI Act reads as follows: 138. Dishonour of cheque for insufficiency etc. , of funds in the account :where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, or any debt or other liability, is returned by the bank, unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for at term which may extend to one year, or with fine which may extend to twice the amount of the cheque; or with both: provided that nothing contained in this section shall apply unless (A) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (B) The payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (C) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. It is clear from Section 138 that a complaint can be presented only when a notice is sent to the drawer of the cheque, about the dishonouring of cheque and after expiry of 15 days from the date of receipt of notice only, the complainant is entitled to file a complaint. It is clear from Section 138 that a complaint can be presented only when a notice is sent to the drawer of the cheque, about the dishonouring of cheque and after expiry of 15 days from the date of receipt of notice only, the complainant is entitled to file a complaint. ( 6 ) SUFFICE it to say that full details are not mentioned in the complaint i. e. , the date when the notice is issued or notice is received etc. In fact the Magistrate could have rejected the same at the outset instead of entertaining such complaints with vague information. Unfortunately, the magistrate has entertained such vague complaint and then proceeded to record the sworn statement. Even while recording the sworn statement, the learned Magistrate has not taken care to elicit the necessary details that are required to be mentioned under Section 138 of N. I. Act. In the sworn statement of the witness, it is stated as follows:"then I got issued a notice to both the accused. A2 received the notice but A1 not received. Accused failed to give any reply after receiving the said notice. "it is crystal clear from the provisions of section 138 of NI Act that it is only after receipt of notice it gives raise to cause of action to file a complaint after expiry of 15 days. The learned Counsel for the 1st respondent contends that he has filed all the documents and the original record may be send for and they may be looked into. In the light of placing the copy of sworn statement of the witness before this court, it is unnecessary to look into all those things. Moreover, the Court ought to have been taken care to get those documents marked when the accused is pleading for discharge by presenting an application. That has not been done by the learned Magistrate. In that view of the matter, there is no need to send for the original records at this stage when the complainant himself stated that A1 has not received the notice. In fact all the copies of the documents are available for this Court. It is stated by Supreme Court in a decision reported in Ms. In that view of the matter, there is no need to send for the original records at this stage when the complainant himself stated that A1 has not received the notice. In fact all the copies of the documents are available for this Court. It is stated by Supreme Court in a decision reported in Ms. M. M. T. C. Limited v. M/s. Medchl Chemicals and pharma (P) Limited, AIR 2002 SC 182 , that for non-mentioning that the cheque was issued for subsisting liability, the complaint should be quashed. It is clearly stated by Supreme Court in a decision reported in S. N. Palanitkar v. State of Bihar, 2001 0 AIR (SCW) 4435, at para 27 as follows:"exercise of inherent power is available to the High Court to give effect to any order under the Cr. P. C. or to prevent abuse of the process of any Court or otherwise to secure the ends of justice. This being the position, exercise of power under Section 482 cr. PC should be consistent with the scope and ambit of the same. In appropriate cases, to prevent judicial process from being an instrument of oppression or harassment. In the hands of frustrated or vindictive litigants, exercise of inherent power is not only desirable but necessary also. So that the judicial forum of Court may not be allowed to be utilised for any oblique motive. When a person approaches the High court under Section 482 Cr. PC to quash the very issue of process, the High Court on the facts and circumstances of a case has to exercise the powers with circumspection to really serve the purpose and object for which they are conferred. "it is categorically stated by Supreme Court that powers under Section 482 have to be exercised in appropriate cases to prevent judicial process from being an instrument of oppression or harassment in the hands of frustrated or vindictive litigants, so that the judicial forum of Court may not be allowed to be utilised for any oblique motive. It is also clearly stated by Supreme Court in a decision reported in Ram Kumar Soni and another v. G. Ravindranath and another, 1992 (2) ALT 658 , that prosecution is maintainable only when all the ingredients of Section 138 are satisfied. It is also clearly stated by Supreme Court in a decision reported in Ram Kumar Soni and another v. G. Ravindranath and another, 1992 (2) ALT 658 , that prosecution is maintainable only when all the ingredients of Section 138 are satisfied. It is stated in K. Janakimanoharan v. Gayatri sugar Complex Limited, 2000 (4) ALT 325 , that the sworn statements of complainant and witnesses recorded on oath by magistrate at the time of taking cognizance of offence on complaint do not form an integral part of complaint. The relevant portion at paras 25, 27 and 28 reads as follows: para-25: Dishonour of cheques - Complaint made must contain specific allegations against the persons impleaded as accused attracting the ingredients of the offence under Section 138 of the Actallegations made in the complaint cannot be read along with the sworn statement recorded at the time of taking the complaint on file and the allied documents to find out whether any prima facie case is made out against the accused for the alleged offence the sworn statement and statements recorded on oath by the Magistrate at the time of taking cognizance of an offence on complaint do not form an integral part of the complaint. " para-27:"it is true that this Court may not readily accept the invitation of a person arrayed as an accused in a criminal case to shoot at sight the very prosecution. The high Courts cannot be attributed of any trigger happiness. It is well settled that the court in a proceeding under Section 482 of the Code cannot make any minute scrutiny of the material available on record. It cannot record any findings on any issue which may be required to be adjudicated by appreciating evidence. Appraisal of evidence is impermissible in a proceeding under section 482 of the Code. It is well settled that for the purpose of exercising the power under Section 482 of the Code to quash a complaint, this Court would have to proceed entirely on the basis of the allegations made in the complaint per se. This Court does not undertake to examine the correctness or otherwise of the allegations. But in case no offence is committed on the allegation and the ingredients of penal provisions are not made out, this Court in exercise of power under Section 482 of cr. This Court does not undertake to examine the correctness or otherwise of the allegations. But in case no offence is committed on the allegation and the ingredients of penal provisions are not made out, this Court in exercise of power under Section 482 of cr. PC would be well within the limits and be justified in quashing the proceedings. This Court is bound to act positively to prevent abuse of legal process. It is the duty bound to prevent manifest injustice as a result of abuse of legal process. Para-28: In this case the averments made in the complaint so far as the petitioners are concerned do not attract the ingredients of section 138 read with Section 141 of the act. There is no allegation as such against the petitioners herein suggesting their involvement in any manner whatsoever attracting Section 141 of the Act. May be the offence was committed by the company and others who are incharge of the affairs of the company and responsible in its management. "it is clearly stated in the aforesaid decision at page 333 the word complaint has been defined in Section 2 (d) of Cr. P. C. and it means, any allegation made orally or in writing to a Magistrate, with a view to his taking action under this Code. It is stated in M/s. Yankay Drugs and Pharmaceuticals Ltd v. M/s. Citi Bank, 2001 (1) ALT (Crl) 411 (A. P.), at paras 8, 12 and 13 as follows: para-8: "from the aforementioned legal position, it is clear that one of the main ingredients of Section 138 of the Act is demanding payment of the cheque amount by the payee or holder in due course after the cheque was dishonoured. Section 138 (b) further mandates that the demand for payment must be for the said amount of money . Para-12: From the aforementioned legal position, it is clear that while demanding payment by issuing a notice under section 138 (b) of the Act, the payee or the holder in due course must demand payment of the amount covered by the cheque. If the demand is for a lesser amount or for an higher amount not covered by the cheque, which was dishonoured, then the prosecution must fail as the statutory requirement of Section 138 (b) is not fulfilled. If the demand is for a lesser amount or for an higher amount not covered by the cheque, which was dishonoured, then the prosecution must fail as the statutory requirement of Section 138 (b) is not fulfilled. Para-13: In the case on hand, the amount covered by the cheque, which was dishonoured by the bank is Rs. 9,972/ -. But in the notice issued under Section 138 (b) of the Act the complainant failed to make any demand for payment of the said amount, instead it was stated in the notice that the cheque, which was dishonoured, was issued for Rs. 3,871/ -. From this it is clear that the notice clearly fell short of the statutory requirement under Section 138 (b) of the Act. It is clear from Section 200 Cr. P. C. that the complainant has to be examined on oath as well as the witnesses. The complainant is expected to plead all the particulars which constitute an offence under Section 138 of NI Act so that the Court can take cognizance of the offence. When there are vague and general statements, it is for the Magistrate to elicit further information from the complainant and insist upon him for furnishing the necessary particulars. Unless and until all the necessary particulars are mentioned, the Magistrate cannot take cognizance of the offence. In this case, the details are not mentioned. It is clearly stated by Supreme Court in Commissioner of Income Tax, Bareilly v. M/s. Kisan Sekhari chini Mills Limited, 2002 (1) Supreme 197 , that the Court has to look into the complaint as well as the sworn statement recorded and the material papers filed before considering whether any offence is made out as can be seen from the following observation :"the complaint has to be read as a whole. If it appears that on consideration of the allegations in the light of the statement made on oath of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court. " ( 7 ) IN the light of above principles laid down by the Supreme Court, I am of the considered opinion that the complaint along with sworn statement and all the necessary documents have to be taken into consideration to judge whether the offence is made out to entertain the case. I am also of considered opinion that all the necessary details have to be furnished in the complaint and the Magistrate cannot be asked to look into the record and documents in the case on behalf of the complainant. It is a case where the magistrate has not bestowed his proper attention to the submissions made in the complaint. When he alleges that cognizable offence took place, instead of forwarding the same to police, he took the case on file under Section 138 of NI Act leaving 406 and 420 IPC. In any view of the matter, those things have not been challenged before this Court. It is also contended by learned counsel for the 1st respondent that when presumption under Section 139 of NI Act arises then the question of quashing of proceedings under Section 482 does not arise. It is also stated in a decision cited (supra) that presumption under Section 139 of NI act may arise against drawer of a cheque, but not against a third party. In this case 2nd petitioner has not issued any cheque. In that view of the matter, presumption cannot be drawn as against the 2nd petitioner. A strange argument is advanced by the learned Counsel for the 1 st respondent that 2nd petitioner may be doing joint family business and hence she is also liable for the offence. This proposition is putforth before this Court for the first time in order to get over the difficulties under Section 138 of NI act. I respectfully disagree with the said contention as it does not hold water and does not deserve any consideration and it is only an after thought. My attention is also drawn to a decision reported in Narasingh das Tapqdia v. Goverdhan Das Partani and another, (2000) 7 SCC 183 , that the question of taking cognizance before cause of action matured does not arise. The relevant portions at para 10 and 11 reads follows: para-10: Mere presentation of the complaint in the Court cannot be held to mean that its cognizance had been taken by the magistrate. The relevant portions at para 10 and 11 reads follows: para-10: Mere presentation of the complaint in the Court cannot be held to mean that its cognizance had been taken by the magistrate. If the complaint is found to be premature, it can await maturity or be returned to the complainant for filing later and its mere presentation at an earlier date need not necessarily render the complaint liable to be dismissed or confer any right upon the accused to absolve himself from the criminal liability. Para-11: In the instant case mere presentation of the complaint on 8-11-1994 when it was returned to the appellant-complainant on the ground that the verification was not signed by the Counsel, could be termed to be an action of the Magistrate taking cognizance within the meaning of Section 142 of the act. No cognizance was taken on 8-11-1994, but the Magistrate applied his mind and took cognizance on 1/-11-1994. The High court erred in holding the complaint to be premature and dismissing the same on that ground. " it is stated by Supreme Court in that case that the complaint was presented before the maturity period and whereas cognizance was taken after expiry of 15 days. In any view of the matter, it is left open to be decided by the lower Court. I state once again that it is the duty of the complainant to make a mention of all the necessary facts which constitute an offence under section 138 NI Act. He has to furnish the name of the person who has drawn the cheque and in whose favour the cheque has been issued including the details of the amount. It is also the duty of the complainant to make a mention that after receipt ,of the notice from the bank dishonouring the cheque, he has issued notice to the drawer of the cheque demanding the amount and that the said notice has to be issued within 15 days from the date of notice issued by the bank. The drawer is entitled to make the payment within 15 days from the date of receipt of the notice. Thereafter he can file complaint within a month on which the cause of action arises as per clause (c) to proviso 138 of NI Act. The drawer is entitled to make the payment within 15 days from the date of receipt of the notice. Thereafter he can file complaint within a month on which the cause of action arises as per clause (c) to proviso 138 of NI Act. If the complainant does not make a mention about all the abovementioned particulars, the Magistrate must always return the complaint for furnishing necessary information. Only after complying all the remarks made by the Magistrate, then the Magistrate shall entertain the complaint and record the sworn statement. In the present case, some of the details are not forthcoming in the complaint. It is the duty of the Magistrate to elicit in detail while recording the sworn statement. Unless the above information is furnished, it is very difficult to take cognizance of the offence or to consider whether an offence is made out under Section 138 of N. I. Act. The above information is absolutely necessary since the higher Courts have to consider the validity and legality. If all the details are mentioned, it will felicitate the Higher courts to consider those things and to judge the legality of the same. In that view of the matter, the details required under section 138 N. I. Act are not mentioned in this case. Much water has flown within the bridge and it is too late to insist upon the details to be furnished. The Court has to consider the matter on the strength of the material available regarding the legality of the case. ( 8 ) I have perused the entire record available with me. It is clear from the sworn statement that the notice is not served. The details are not forthcoming. The learned Counsel for the 1st respondent says that all the documents are filed in the lower Court. In that view of the matter, some more facts are required to verify whether notice has been served or not. The information available is hazy in nature and on that basis, this Court cannot decide the issue of service of notice. Insofar as the 2nd petitioner is concerned, she is not the drawer of the cheque or do not have dealings with the first petitioner. The alleged agreement, shows that the matter is of civil nature. The information available is hazy in nature and on that basis, this Court cannot decide the issue of service of notice. Insofar as the 2nd petitioner is concerned, she is not the drawer of the cheque or do not have dealings with the first petitioner. The alleged agreement, shows that the matter is of civil nature. When the 2nd petitioner is not drawer of the cheque, the complaint against her under Section 138 of N. I. Act is invalid. ( 9 ) TO sum up, I find that complaint against A1 is prima-facie maintainable on the strength of the averments made in the complaint and sworn statement. Insofar as the 2nd petitioner is concerned, it is not maintainable under Section 138 of N. I. Act since it does not give any cause of action to proceed against a person who is not a drawer of the cheque. The proceedings insofar as 2nd petitioner is concerned, are liable to be quashed. Insofar as the 1st petitioner is concerned, the finding on the correctness of the service of notice is left open to the lower Court. The lower Court shall decide about the service of notice as required under Section 138 of N. I. Act during trial uninfluenced by any of the observations made in this order. ( 10 ) IN the result, this criminal petition is allowed to the extent of quashing the impugned proceedings as against A2. Insofar as A1 is concerned, it is left open to the lower Court to decide about the correctness of service of notice. Both parties are at liberty to canvass all the pleas before the lower Court and the lower Court shall consider all those contentions canvassed by the parties during the trial.