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2006 DIGILAW 2812 (PNJ)

Balraj Kumar v. Kuldeep Kaur

2006-07-17

body2006
Judgment 1. This petition under Sec.482, Cr. P. C. , has been brought by balraj Kumar wherein relief prayed for is for quashing of orders dated 28.2.2003 (Annexure P-2) and 12.6.2000 (Annexure P-1) passed by the sessions Judge, Ludhiana and JMIC, Ludhiana, respectively. The application under Sec.245, Cr. P. C. , for discharge was accepted by the jmic, Ludhiana. The revision of petitioner-Balraj Kumar has been dismissed. 2. A brief reference to the facts is required. Statedly, respondent and the petitioner were partners in a firm. On 12.10.1991, a settlement was arrived at between the complainant (petitioner) and the accused (respondent ). In the terms of the settlement, it was settled the petitioner will be discharged from liability of the Punjab financial Corporation, Kuldeep Kaur (respondent) would be appointed as managing Director w. e. f.12.10.1991 and two more directors will be appointed in place of petitioner-Balraj Kumar. The new directors would furnish fresh guarantees and will get discharged the guarantees of Balraj kumar from the Punjab Financial Corporation. As per the contents of settlement, two cheques bearing No.8224149 for a sum of Rs.4 lacs and no.8224150 for a sum of Rs.2 lacs were drawn on Canara Bank, Clock tower Branch, Ludhiana were given to the petitioner. It was further stipulated that the cheques would not be presented up to 15.3.1992. 3. On 30.3.1992, the petitioner-complainant presented the cheques for encashment through his Banker Canara Bank, but were returned with the endorsement "funds insufficient". The accused was served with a notice through counsel. The accused failed to pay the amount and, therefore, a criminal complaint was instituted. Preliminary evidence was led, whereafter the respondent was summoned vide order dated 13.8.1993. Subsequently, an application for discharge was filed. Essentially, four grounds were taken; the first being that the numbers of the cheques which were mentioned in the settlement, did not tally with the cheques that were presented by the petitioner; secondly; that Kuldeep Kaur (respondent) was served in her personal capacity and not as the Managing Director; thirdly, that in the notice issued under Sec.138 of the Negotiable Instruments Act (for short the Act), double the amount had been demanded and; fourthly, that the complainant being a partner, could not prosecute another partner of the same firm. Although, the respondent was directed to be discharged on all the four grounds by the trial Magistrate, however, in the revision filed by the petitioner, the revisional court did not accept second and fourth ground. Learned counsel for the respondent has very fairly, in this court also, contended that the stand taken by the revisional court on the second and the fourth grounds is accepted and it is conceded that Kuldeep Kaur could be served in her personal capacity as also that the petitioner had the legal right to institute the proceedings under Sec.138 of the Act against the respondent, therefore, two issues i. e. the first and third need to be addressed. 4. Learned counsel for the petitioner has contended that it was only on account of a clerical error in the settlement that the numbers of the cheques had wrongly been mentioned. Physically, the cheques given to the petitioner were bearing numbers 8424149 and 8424150. It was only difference of digit 2 after 8 that had brought about the confusion. The date and the amount mentioned in these cheques being Rs.4 lacs and Rs.2 lacs, respectively, were correct. The clerical error in the settlement, in the contention of the learned counsel for the petitioner, would have no bearing on the proceedings instituted and carried under the Act. Learned counsel further contended that the liability having been admitted by Kuldeep Kaur to the tune of Rs.6 lacs and the negotiable instrument to that extent having been given to the petitioner, could not take the hyper technical objection, particularly in view of the admitted fact that the cheques presented in the bank bore the same numbers as the numbers reflected in the notice issued and the complaint instituted. 5. While challenging the findings of the courts below, it has been contended that the scope of the Court was to consider the proceedings under section 138 of the Act and at the stage of charge, the grounds which could possibly be the defence while leading evidence, could not have been taken as, in terms of settled law, only a prima facie case is required to be considered. 6. With regard to the other ground, it has been contended that in the notice issued, in the concluding portion, reference to double the amount is to the clause contained in settlement dated 12.10.1991. 6. With regard to the other ground, it has been contended that in the notice issued, in the concluding portion, reference to double the amount is to the clause contained in settlement dated 12.10.1991. The clause reads as under:- "in the meantime I will give drafts in lieu of cheques. In case I could not make payment, he can present the cheques to the bank. In case of failure of the cheques whatsoever the reason may be I will pay double the amount of the cheques. " As per the contention of the learned counsel for the petitioner, liability of the respondent arose in terms of the settlement and it was the duty of the complainant to refer to the legal liability of the drawer, as such reference to double the amount had been made. 7. It is argued that the scheme of the Act and the provisions would not be rendered redundant by such an averment. The cheques were issued in discharge of liability, the demand of double the amount would not negate the offence which had already been completed on the respondent-accused not making the payment after issuance of the notice. Reference in this regard has been made to two judgments of the HON BLE Supreme Court in suman Sethi V/s. Ajay K. Churiwal and another, (2000) 2 Supreme Court cases 380 and United Credit Ltd. , Calcutta V/s. Agro Sales India and others, (2001) 10 Supreme Court Cases 763. 8. Learned counsel for the respondent, on the other hand, has argued that once the petitioner-complainant had accepted different cheques in the settlement, proceedings under Sec.138 of the Act could not have been instituted with regard to different cheques. On the other issue, learned counsel for the respondent has contended that the exact amount of the cheques had to be reflected in the notice, otherwise, the proceedings stand vitiated. In this regard, reference has been made to the judgments of the HON BLE Supreme Court i. e. Suman Sethi V/s. Ajay K. Churiwal and another, (2000) 2 Supreme Court Cases 380, i. e. the same judgment on which reliance has been placed by the learned counsel for the petitioner, and united Credit Ltd. V/s. M/s Agro Sales India, 1999 (3) R. C. R. (Criminal) 74. No other point has been raised. 9. No other point has been raised. 9. On the asking of the court, learned counsel for the respondent has admitted the factum of the settlement. Learned counsel for the respondent has further admitted that the respondent-accused had accepted the liability of Rs.6 lacs. The said liability of Rs.6 lacs had not yet been discharged by the respondent-accused and the petitioner-complainant had not presented any other cheque in the bank. It is further the conceded case of the respondent that there is a common account, even if there were four cheques, they would have gone to the same Bank. Learned counsel for the petitioner, on facts, has stated that, the petitioner was given only two cheques and there is no allegation that four cheques had been given to the petitioner out of which only two had been presented. So far as the difference in cheque numbers is concerned, suffice it to say that the factum of the agreement and the liability to the tune of Rs.6 lacs, having been admitted by the learned counsel for the respondent, the petitioner had presented cheques to that extent only. As has been noticed earlier, the numbers of the cheques presented, the numbers of the cheques reflected in the notice and the numbers of the cheques mentioned in the complaint being the same, the respondent cannot take any benefit of different numbers being mentioned in settlement dated 12.10.1991. The question of liability would be a matter of defence that can be raised at the appropriate stage. It was not for the Courts to have considered this issue in the context of the settlement at the stage of charge or discharge of the accused. 10. On the other issue, I have given my considered thought to the facts as also to the case law. In the case of United Credit Ltd. , Calcutta V/s. Agro Sales India and others, (2001) 10 Supreme Court Cases 763, relied upon by the petitioner, the Magistrate had dismissed the complaint holding the notice itself to be invalid as the notice contained not only the amount covered by the cheque but also some other amount towards interest and costs. The complainant, aggrieved, moved the High Court by filing a revision petition, which was also dismissed. The complainant, aggrieved, moved the High Court by filing a revision petition, which was also dismissed. The HON BLE Supreme Court, while considering the question whether the impugned notice can be held to be invalid merely because the notice contained some amount towards interest and costs separately, after indicating the amount covered by the cheque which stood bounced, relied on Suman Sethis case (supra ). In view of the law laid down, it was held that there was no force in the contention and, therefore, the Magistrate was wholly in error to hold that the notice itself is invalid. The order of the High Court was set aside and the magistrate was directed to conclude the proceedings in accordance with law. 11. In the other judgment, which has been cited by both the sides, i. e. Suman Sethis case (supra), the HON BLE Supreme Court, while relying on central Bank of India V/s. Saxons Farms, (1999) 8 SCC 221, has held in paras 8 and 9 in the following terms:- "8. It is a well-settled principle of law that the notice has to be read as a whole. In the notice, demand has to be made for the "said amount" i. e. the cheque amount. If no such demand is made the notice no doubt would fall short of its legal requirement. Where in addition to the "said amount" there is also a claim by way of interest, cost etc. Whether the notice is bad would depend on the language of the notice. If in a notice while giving the break-up of the claim the cheque amount, interest, damages etc. are separately specified, other such claims for interest, cost etc. Would be superfluous and these additional claims would be severable and will not invalidate the notice. If, however, in the notice an omnibus demand is made without specifying what was due under the dishonoured cheque, the notice might well fail to meet the legal requirement and may be regarded as bad. 9. This Court had occasion to deal with Sec.138 of the Act in Central Bank of India V/s. Saxons Farms and held that the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. Though in the notice demand for compensation, interest, cost etc. 9. This Court had occasion to deal with Sec.138 of the Act in Central Bank of India V/s. Saxons Farms and held that the object of the notice is to give a chance to the drawer of the cheque to rectify his omission. Though in the notice demand for compensation, interest, cost etc. is also made the drawer will be absolved from his liability under Sec.138 if he makes the payment of the amount covered by the cheque of which he was aware within 15 days from the date of receipt of the notice or before the complaint is filed. " 12. It is not the case of the respondent that in the notice served under Sec.138 of the Act, there was no reference to the cheques amounts. The concluding portion of the notice cannot be read in isolation to contend that it was an omnibus demand without specifying what was due under the dishonoured cheques. A specific mention to the details of the cheques having been made, in my considered opinion, it is sufficient compliance of provisions of Sections 138/139 of the Act. It is the case of the respondent herself that the cheques were issued under the settlement. 13. The relevant provisions of the Act would be satisfied by service of a notice under Sec.138 of the Act within prescribed time, at the correct address with particular details of the cheques, their dates, amounts, the date of presentation of the cheques and the dates when the cheques were returned with the endorsement of the bank as to the reasons of dishonour and demand of money. These particulars are clearly set out in the notice and, therefore, in my considered opinion, the object of the notice of giving a chance to the drawer of the cheque to rectify his omission stands satisfied. 14. The drawer i. e. the respondent would have been absolved of her liability under Sec.138 of the Act, if she had made the payment of the amount covered by the cheques within 15 days from the receipt of the notice. The same having not been made, the offence is complete. As per the judgment in Suman Sethis case (supra), it has been held that the notice has to be read as a whole. Further, it depends on the facts of each case viz. The same having not been made, the offence is complete. As per the judgment in Suman Sethis case (supra), it has been held that the notice has to be read as a whole. Further, it depends on the facts of each case viz. Whether notice is bad or not, would depend upon the language of the notice. In my considered opinion, having considered the contents of the notice, no measure of doubt is left that the notice was issued under Sec.138 of the act with regard to cheque bearing No.8424149 dated 24.11.1991 for Rs.4 lacs and cheque bearing No.8424150 dated 27.12.1991 for Rs.2 lacs drawn on Canara Bank, Clock Tower Branch, Ludhiana, which were presented on 30.3.1992 and returned by the Bank on 30.3.1992 with the remarks "insufficient funds". Since, these details have been clearly given and notice of 15 days having been given, failing which it was stated that proceedings would be initiated, the requirements of legal notice stand satisfied. Reference to the settlement and liability of the drawer to the tune of double the amount would not render the notice illegal and discharge of the accused. So far as the judgment rendered in United Credit Ltd. V/s. M/s agro Sales India, 1999 (3) R. C. R. (Criminal) 74, a judgment of the Calcutta high Court, referred by the learned counsel for the respondent, is concerned, the judgment of the HON BLE Supreme Court having been given on the specific issue and being contra to the decision rendered in United credit Ltd. , Calcutta V/s. Agro Sales India and others, (2001) 10 Supreme court Cases 763 and Suman Sethis case (supra), automatically stands overruled. Reference to para-13 of the judgment shows that it was held that nothing more than the cheque amount could be claimed in the notice while in the judgment of the HON BLE Supreme Court in Suman Sethis case (supra), mentioning of such amounts was admissible. 15. The order of discharge has caused abuse of process of Court resulting in miscarriage of justice. Although, mandatory provisions had been complied with by the petitioner, the respondent has been discharged, therefore, calling for interference in inherent jurisdiction. The scope of the court at the stage of charge or discharge, as has been repeatedly held is limited. Only a prima facie case is required to be seen. Although, mandatory provisions had been complied with by the petitioner, the respondent has been discharged, therefore, calling for interference in inherent jurisdiction. The scope of the court at the stage of charge or discharge, as has been repeatedly held is limited. Only a prima facie case is required to be seen. Detailed and meticulous reference to the evidence, defence and other consideration is not required. In this view of the matter also, I find that the courts while considering the issue have travelled beyond jurisdiction. The respondent would be at liberty to lead evidence in defence at the appropriate stage of trial. 16. In view of the facts and circumstances of the case noticed above and the judgments of the HON BLE Supreme Court, the proceedings under Sec.138 of the Act are clearly maintainable. Accordingly, the petition is allowed and the impugned orders are hereby set aside. The magistrate is directed to proceed in accordance with law. However, any thing stated hereinabove shall not be construed as an expression of opinion on merits of the case. The parties, through their counsel, are directed to appear before the Magistrate on 3.8.2006.