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2005 DIGILAW 256 (JK)

Kanta Verma v. Surinder Gupta

2005-09-26

Y.P.NARGOTRA

body2005
1. Respondent Surinder Gupta instituted a complaint U/S 138 of Negotiable Instruments Act, (hereinafter called the Act), before the learned Trial Court against M/S River Ridge Software Pvt.Ltd. and the petitioner herein, a Director of the aforesaid company, on the allegations that accused No.1- company was indebted and owed Rs.79,931.50 to the complainant and towards the discharge of his liability issued cheque No.436833 dated 25.5.2002, for the said amount to be drawn on its banker namely Standard Chartered Grindlays Bank M-1,South Extension, Part II New Delhi, to be paid out of its account No.33679209. The cheque was signed by the petitioner herein being Director of the company. The complainant presented the cheque through its bankers namely Jammu Central Cooperative Bank Ltd. Talab Tiloo Branch Jammu, however it was not honoured by the bankers of the accused and was returned unpaid alongwith the memo dated 23.11.2002 with the remarks payment stopped by the drawer.� After receiving the cheque the complainant made a demand through notice within the statutory period and when the accused did not make the payment within 15 days after receipt of the demand notice, he filed the complaint. 2. Learned Trial Court by its order dated 6.2.2003 issued the process against the accused, after being satisfied that prima facie offence U/S 138 of the Act stood constituted on the facts alleged and on the basis of the preliminary statement of the complainant. 3. The petitioner, a Director of the company, through this petition seeks quashment of the complaint by invoking Sec.561-A Cr.P.C. The case of the petitioner is that on the basis of two agreements dated 01.6.2001 the petitioner and her husband were to purchase all the intellectual property right in software Tikakar Raj Bhasha Anuvadak� alleged to have been developed by respondent Surinder Gaupta and towards the purchase the petitioner had issued a post-dated cheque dated 25.5.2002 drawn on Standard Chartered Grindlys Bank Delhi for an amount of Rs.79,931.50. Under clause 18 of the agreement it stood agreed by the parties that in the event of IPR in the said software was claimed by any third party then all the money received by beneficiaries under the said agreement shall make good all the monies paid to them in the liquidation of the pre-take over debts and the beneficiaries shall also be responsible for all the claims and damages imposed on the company M/S River Ridge Software P.Ltd. However on coming to know that neither the respondent was the developer of the software product Takakar Raj Bhasha Anuvadak� nor he or the accused company had any right in the said software product, the petitioner and her husband filed a suit for declaration, mandatory injunction, permanent injunction and recovery of the amount with pendente lite interest @ 24% P.A. before Delhi High Court, being suit No.126/2002 which is pending disposal and in the said suit respondent No.1 and the Company M./S River Ridge Software moved an application U/S 8 of the Arbitration and Conciliation Act read with Sec.151 C.P.C. seeking reference of all the disputes between the parties to the arbitrator in view of the arbitration clause existing in the agreement dated 01.6.2001. Delhi High Court accordingly referred the disputes between the parties to the Arbitrator Mr.Atul Kayastha and the arbitrator is seized of the matter. It has been submitted by the petitioner that validity of the agreements and the liability of the petitioner for the cheque in question is being considered by the Arbitrator; therefore, in the circumstances of the case the complaint deserves to be quashed. 4. I have heard the learned counsel for the petitioner. Mr.Hali has submitted that U/S 138 of the Act the liability on the petitioner can be fastened only when the cheque is shown to have been issued for consideration. He argues that the provisions of Sec.138 cannot be pressed into service in a case where the cheque is without consideration or same has been obtained by way of fraud. He further submits that the cheque in the instant case has come to be issued without there being any consideration for the same; the petitioner had issued the cheque believing that respondent No.1 was the author and owner of software Tikakar Raj Bhasha Anuvadak� which infact he was not. He further submits that the cheque in the instant case has come to be issued without there being any consideration for the same; the petitioner had issued the cheque believing that respondent No.1 was the author and owner of software Tikakar Raj Bhasha Anuvadak� which infact he was not. According to Mr.Hali in view of the abovesaid facts showing the cheque to be without consideration and having been obtained by the complainant fraudulently should not be allowed to be made the basis for criminal proceedings as otherwise it would tantamount to allowing the process of the court to be abused at the hands of the complainant. He submits that the documents for substantiating the aforesaid facts alleged in this petition can be made basis for invoking jurisdiction U/S 561-A Cr.P.C. In support of his contention he relies upon a case titled State of Haryana vs Bhajan Lal, AIR 1992 SC 604 and submits that his case squarely falls in the categories mentioned by the Supreme Court on which complaint can be quashed. 5. I have considered the contentions raised by learned counsel for the petitioner and perused the complaint in question also. From the bare reading of the complaint it is manifest that on the allegations leveled in the complaint offence U/S 138 Cr.P.C. stands constituted. The facts and pleas on the basis of which the petitioner seeks quashment of the complaint are admittedly in the nature of defence and are questions of facts, which are yet to be proved by the accused before the Trial Court. Can these facts, without proof before the Trial Court, be made basis for quashing the complaint? 6. In AIR 1992 SC 1379,titled Chand Dhawan vs Jawaharlal, their lordships of the Supreme Court held as follows:- The High Court can exercise its inherent jurisdiction of quashing a criminal proceeding only when the allegations made in the complaint do not constitute an offence or that the exercise of the power is necessary either to prevent the abuse of the process of the court or otherwise to secure the ends of justice. No inflexible guidelines or rigid formula can be set out and it depends upon the facts and circumstances of each case wherein such power should be exercised. No inflexible guidelines or rigid formula can be set out and it depends upon the facts and circumstances of each case wherein such power should be exercised. When the allegations in the complaint prima facie constitute the offence against any or all the respondents in the absence of materials on record to show that the continuance of the proceedings would be an abuse of the process of the court or would defeat the ends of justice, the High Court would not be justified in quashing the complaint.� Their Lordships further observed:- Where the allegations in the complaint were specific and clear that during the subsistence of an earlier valid marriage the accused entered into a second marriage and have thereby committed an offence falling under section 494 I.P.C. and the complainant had affirmed the fact on oath and the two witnesses produced by the complainant before the Magistrate have supported that case and on the basis of statement on oath of the complainant read alongwith the evidence of the two witnesses thus recorded and the materials available before the magistrate to get himself satisfied that cognizance should be taken and process issued, the magistrate was satisfied that an offence had been disclosed and accordingly the summons had been issued, the High Court was not justified in reaching the conclusion that the proceedings were liable to be quashed on the basis of additional materials produced by the accused and those were required to be proved when those materials were not accepted by the complainant.� 7. The law is well settled that when a complaint is sought to be quashed the court has to look into the material on the basis of which process has been issued to see whether any offence is made out if the allegations made in the complaint are accepted in toto. The materials which can be looked into for deciding whether initiation/continuance of the complaint amounts to abuse of process of the court would be the material placed on record by the complainant. If the allegations made in the complaint are accepted in toto and any offence is prima facie made out, the complaint cannot be quashed. In the present case the materials which the petitioner seeks to rely upon for contesting the allegations made in the complaint are yet to be proved. If the allegations made in the complaint are accepted in toto and any offence is prima facie made out, the complaint cannot be quashed. In the present case the materials which the petitioner seeks to rely upon for contesting the allegations made in the complaint are yet to be proved. Without their formal proof by evidence before the Trial Court it cannot be held in these proceedings that the cheque issued is without consideration or that the same has been obtained by the complainant fraudulently from the petitioner. In State of Haryana Vs Bhajanlal,AIR 1992 SC 604, their lordships observed as follows:- In following categories of cases, the High Court may in exercise of powers under Art.226 or under S.482 of Cr.P.C. Interfere in proceedings relating to cognizable offences to prevent abuse of the process of any Court or otherwise to secure the ends of justice. In State of Haryana Vs Bhajanlal,AIR 1992 SC 604, their lordships observed as follows:- In following categories of cases, the High Court may in exercise of powers under Art.226 or under S.482 of Cr.P.C. Interfere in proceedings relating to cognizable offences to prevent abuse of the process of any Court or otherwise to secure the ends of justice. However, power should be exercised sparingly and that too in the rarest of rare cases: 1- Where the allegations in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused; 2- Where the allegations in the first information report and the materials if any accompanying the FIR do not disclose cognizable offence, justifying an investigation by the police officers under section 156(1) of the code except under an order of a Magistrate within the purview of section 155(2) of the Code; 3- Where the uncontroversial allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused; 4- Where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under section 155(2) of the Code; 5- Where the allegations made in the FIR or the complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused; 6- Where there is an express legal bar engrafted in any of the provisions of the Code or the Act concerned (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the Act concerned, providing efficacious redress for the grievance of the aggrieved party; 7- Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spit him due to private and personal grudge.� 8. The case of the petitioner does not fall in any of the aforesaid categories. The case of the petitioner does not fall in any of the aforesaid categories. Since the allegations made in the complaint prima facie constitute an offence, as such the order of the learned Trial Court taking cognizance and issuance of process against the accused does not call for any interference. There is thus no merit in the writ petition, which is accordingly dismissed, alongwith connected CMPs.