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2003 DIGILAW 158 (HP)

PARAS MARKETING COMPANY v. RUCHIRA PAPERS LTD.

2003-06-25

M.R.VERMA

body2003
JUDGMENT M.R. Verma, J.—This petition under Section 482 of the Code of Criminal Procedure (hereafter referred to as the Code) has been preferred by the petitioners/accused (hereafter referred to as the petitioners) for quashing Criminal Complaint No. 122 of 2001, under Section 138 of the Negotiable Instruments Act (hereafter referred to as the Act). 2. Brief facts leading to the filing of the present petition are that the respondent/complainant (hereafter referred to as the respondent) has filed a complaint against the petitioners under Section 138 of the Act. After recording preliminary evidence, the learned trial Magistrate directed issue of summons to the petitioners who put in appearance pursuant to the summons. Aggrieved by the summoning order and consequent issue of summons to them, the petitioners have preferred the present petition for quashing the complaint as well as further proceedings therein on the ground that the complaint does not make out a case against the petitioners and the process has been ordered to be issued against them without application of mind and the summoning order is against the settled principles of law. 3. I have heard the learned Counsel for the parties and have also gone through the records. 4. It is averred in the complaint that petitioner No. 1 is a registered limited company and petitioner No. 2 is its Director and looks after the affairs of the petitioner company and is responsible for the acts and conduct of the said company. The respondent is a manufacturer of Kraft papers and the petitioners have been purchasing Kraft papers from the respondent. The petitioners issued cheque No. 969388 dated 10.1.2001 for Rs. 2,10,707, drawn on Punjab and Sind Bank, Calcutta in favour of the respondent to discharge an existing and legally enforceable liability on account of purchase of Kraft papers. The respondent deposited and said cheque with its bankers Central Bank of India, Nahan branch from where it was sent to Punjab and Sind Bank, Calcutta for collection. However, the cheque was dishonoured on the ground of "stoppage of payment" by the petitioners and was received back by the respondent vide memo, dated 16.2.2001. The petitioners were thereafter called upon by the respondent through a notice dated 22.2.2001 to make the payment of the cheque amount within fifteen days and such notice was issued through registered A.D. Post and U.P.C. and was received by the petitioners on 27.2.2001. The petitioners were thereafter called upon by the respondent through a notice dated 22.2.2001 to make the payment of the cheque amount within fifteen days and such notice was issued through registered A.D. Post and U.P.C. and was received by the petitioners on 27.2.2001. However, despite receipt of the notice, the petitioners failed to make the payment within the prescribed period. Hence the complaint by the respondent. 5. It was contended by the learned Counsel for the petitioners that the contents of the complaint do not disclose commission of any offence by the petitioners, therefore, the complaint and the proceedings initiated against the petitioners are liable to be quashed. 6. The material averments as made in the complaint have already been set out hereinabove and evidently they disclose the commission of an offence punishable under Section 138 of the Act, Therefore, the contention raised for the petitioners cannot be sustained. 7. It was further contended that at the relevant time the petitioners had sufficient funds in the bank at the time of issuance of the cheque in question and presentation thereof but the payment had been stopped "for want of quality of material supplied by the respondent." 8. A perusal of the record reveals that there is nothing on the record at present to show that the material supplied by the respondent was of inferior quality or was not of the quality agreed to be sold to the petitioners. Evidently, this is a question of fact which will have to be established by leading evidence. This having not been done in any form by the petitioners, the contention raised for them cannot be sustained at this stage. 9. It was also contended for the petitioners that the proceedings have been initiated with mala fide intention to force them to appear before a Court at a far off place and thereby to pressurise them to come to the terms as may be desired by the respondent. This contention is also not substantiated by anything on the record and in view of the complaint and preliminary evidence, prima facie, disclosing a case against the petitioners, this contention can also not be sustained. 10. It was further contended for the petitioners that the respondent has filed another complaint against Pushpa Aggarwal and others against which a petition for quashing has been filed. 10. It was further contended for the petitioners that the respondent has filed another complaint against Pushpa Aggarwal and others against which a petition for quashing has been filed. No nexus is shown in between the complaint in hand and the other complaint and mere filing of a petition for quashing such complaint has no bearing what-so-ever on the proceedings in the present complaint. 11. It was also contended for the petitioners that in view of the provisions of Section 141 of the Act, no case is made out against the petitioners. This contention is also without any merit and substance in view of the contents of the complaint as already set out hereinabove. The petitioners have not denied the purchase of material from the respondent and have not denied issue of the cheque and stoppage of the payment. Their only contention is that the payment had to be stopped for "want of quality of the material" supplied to them which is a question of fact and will have to be proved at the trial and cannot be presumed as desired by the petitioners. 12. Lastly, it was contended for the petitioners that the process has been issued by the trial Court without application of mind and such act on the part of the trial Court is not only violative of the normal procedure requiring application of mind to the material before it by the Court before issue of process but is also contrary to the law as laid down by the Honble Supreme Court in K.RG. Nair v. M/s. Jindal Menthol India Ltd., JT 2000 (Suppl.) SC 519; Pepsi Foods Ltd. and another v. Special Judicial Magistrate and others, (1998) 5 SCC 749; Bhaskar Industries Ltd. v. Bhiwani Denim and Apparels Ltd. and others, (2001) 7 SCC 401 and M.M.T.C. Ltd. and another v. Medchi Chemicals and Pharma (P) Ltd. and another, (2002) 1 SCC 234. 13. The relevant order dated 8.8.2001 directing issue of summons to the petitioners reads as under:— "The record of the case as well as preliminary evidence adduced by the complainant perused and learned counsel for the complainant heard. The allegations and on oath version of the complainant Sushil Kumar is that he is working as an Accountant with the complainant Firm which manufactures craft papers and he has been authorised on behalf of the company to file complaint in Court. The allegations and on oath version of the complainant Sushil Kumar is that he is working as an Accountant with the complainant Firm which manufactures craft papers and he has been authorised on behalf of the company to file complaint in Court. That the accused No. 2 who is Director of accused Firm No. 1 is liable for all its acts and conducts. That the accused person purchased craft paper from the complainant company and in lieu of payment the accused person issued cheque No. 969388 dated 10.1.2001 for a sum of Rs. 2,10,707 to be drawn at Punjab and Sind Bank Kalkata Ex. C-l. That the complainant firm presented the aforesaid cheque in its bank Central Bank of India Nahan for encashment which was sent for collection in the bank of the accused but the complainant firm received the disputed cheque unpaid on the grounds that the payment has been stopped by the accused with memo Ex. C-2 and Ex. C-3. That thereafter the complainant firm issued a registered legal notice Ex. C-4 through his counsel dated 22.2.2001 to the accused person requiring them to make the payment of the amount of disputed cheque within 15 days, but the accused persons did not make the payment of the disputed cheque within stipulated period. The complainant firm also placed on record cheque Ex. C-l, bank memo Ex. C-2, C-3, copy of legal notice Ex. C-4, UPC Ex. C-5, postal receipt Ext. C-6 and acknowledgement Ex. C-7 and Ex. C-8 in support of his allegations. Hence, the close appraisal of the preliminary evidence adduced on record by the complainant reveals a strong prima facie case against the both accused persons for the offence punishable under Section 138 of Negotiable Instruments Act. Hence both the accused persons are ordered to be summoned for 27.9.2001." 14. It is evident from the above quoted order itself that it has been passed after due application of mind to the material on record. A perusal of the complaint and the preliminary evidence fully justify the conclusion arrived at by the learned trial Magistrate, therefore, the contention that the trial Court had directed issue of process without application of mind to the material on record, is without any merit and substance. 15. The decisions of the Honble Apex Court cited in support the contentions for the petitioners are of no help to them. 16. 15. The decisions of the Honble Apex Court cited in support the contentions for the petitioners are of no help to them. 16. In Pepsi Foods, case (supra), the Honble Apex Court held as under:— "29. No doubt the Magistrate can discharge the accused at any stage of the trial if he considers the charge to be groundless, but that does not mean that the accused cannot approach the High Court under Section 482 of the Code or Article 227 of the Constitution to have the proceeding quashed against him when the complaint does not make out any case against him and still he must urdergo the agony of a criminal trial.. 17. Evidently, the above ratio relied on for the petitioner is not attracted in the facts and circumstances of the present case. There is no dispute about the right of the petitioners to approach the High Court under Section 482 of the Code for quashing a complaint wherein the allegations are so absurd and inherently improbably on the basis of which no prudent man can ever reach on just conclusion that there exists no sufficient ground for proceeding against the accused. However, as already stated hereinabove, the complaint and preliminary evidence disclose a prima facie case against the petitioners, therefore, on the strength of the above ratio, the complaint and consequential proceedings cannot be quashed. 18. In K.P.G. Nairs case (supra) the Honble Apex Court held as under:— "8. From a perusal of Section 141, it is evident that in a case where a company^committed offence under Section 138, then not only the company but also every person who at the time when the offence was committed, was in charge of and was responsible to the company for the conduct of the business of the company shall be deemed to be guilty of the offence and liable to be proceeded against and punished accordingly. It follows that a person other than the company can be proceeded against under those provisions, only if that person was in charge of and was responsible to the company for the conduct of its business." 19. It follows that a person other than the company can be proceeded against under those provisions, only if that person was in charge of and was responsible to the company for the conduct of its business." 19. This ratio is also of no help to the petitioners because it is specifically averred in the complaint that petitioner No, 2 looks after the affairs of petitioner No. 1 and is responsible for its act and conduct and the cheque in question was also issued by him and it is so stated by Sushil Sharrna (CW-1) while giving preliminary evidence. 20. In Bhaskar Industries, case (supra), the Honble Apex Court held as under:— "19. The position, therefore, boils down to this; it is within the powers of a Magistrate and in his judicial discretion to dispense with the personal appearance of an accused either throughout or at any particular stage of such proceedings in a summons case, if the Magistrate finds that insistence of his personal presence would itself inflict enormous suffering or tribulations on him, and the comparative advantage would be less. Such discretion need be exercised only in rare instances where due to the far distance at which the accused resides or carries on business or on account of any physical or other good reasons the Magistrate feels that dispensing with the personal attendance of the accused would only be in the interests of justice. However, the Magistrate who grants such benefit to the accused must take the precautions enumerated above, as a matter of course. We may reiterate that when an accused makes an application to a Magistrate through his duly authorised counsel praying for affording the benefit of his personal presence being dispensed with the Magistrate can consider all aspects and pass appropriate orders thereon before proceeding further." 21. In so far as the merits of the case are concerned, the above ratio has nothing to do therewith. In so far as allowing exemption from personal appearance is concerned, it was applied for by the petitioners on 10.1.2003 and was allowed though the accusations were to be put to the petitioners on that day and another date was given for putting of the accusations. In so far as allowing exemption from personal appearance is concerned, it was applied for by the petitioners on 10.1.2003 and was allowed though the accusations were to be put to the petitioners on that day and another date was given for putting of the accusations. It is still open to the petitioners to file application for exemption from personal appearance and this right has nowhere been denied to them and on filing of such application by the petitioners, the learned trial Magistrate can take appropriate decision thereon as may be warranted by the facts and circumstances at the relevant time. Therefore, this contention raised for the petitioners also appears to be irrelevant in so far as the claim of the petitioners for quashing the complaint and the consequential proceedings is concerned. 22. In MM.T.C.s case (supra), while dealing with the scope of powers of the High Court under Section 482 of the Code, the Honble apex Court held as under:— "13. The learned Judge has next gone into facts and arrived at a conclusion that the cheques were issued as security and not for any debt or liability existing on the date they were issued. In so doing the learned Judge has ignored the well-settled law that the power of quashing criminal proceedings should be exercised very stringently and with circumspection. It is settled law that at this stage the court is not justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the complaint. The inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice. At this stage the Court could not have gone into merits and/or come to a conclusion that there was no existing debt or liability." It was further held that : "19. Just such a contention has been negatived by this Court in the case of Modi Cements Ltd. v. Kuchil Kumar Nandi, (1998) 3 SCC 249. It has been held that even though the cheque is dishonoured by reason of "stop-payment" instruction an offence under Section 138 could still be made out. It is held that the presumption under Section 139 is attracted in such a case also. It has been held that even though the cheque is dishonoured by reason of "stop-payment" instruction an offence under Section 138 could still be made out. It is held that the presumption under Section 139 is attracted in such a case also. The authority shows that even when the cheque is dishonoured by reason of stop-payment instructions by virtue of Section 139 the court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the "stop-payment" instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there were sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop-payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 would not be made out. The important thing is that the burden of so proving would be on the accused. Thus a court cannot quash a complaint on this ground." 23. The above ratios are also of no help to the petitioners. Rather they support the action of the learned trial Magistrate and the cause of the complainant. As already stated, there is nothing on the record to reveal a justifiable reason for stopping payment by the petitioners. They cannot claim immunity from prosecution for the commission of the offence alleged to have been committed by them. 24. In view of the above discussion and conclusions, there is no merit and substance in the present petition which is accordingly dismissed. 25. The parties, through their learned Counsel, are directed to appear before the trial court on 4.8.2003. -