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2007 DIGILAW 93 (DEL)

MAIKAAL FIBRES LTD. v. RAJRANI EXPORTS PVT. LTD.

2007-01-12

A.K.SIKRI

body2007
JUDGMENT A.K. Sikri, J. M/s. Rajrani Exports Pvt. Ltd. has filed complaint under Section 138 of the Negotiable Instruments Act (in short the NI Act) against four persons. Accused Nos. 1 and 2 are two companies, namely, M/s. Maikaal Boire India Ltd. and MI s. Maikaal Fibres Ltd. Accused No.3 Sh. Mrigendra Jalan is shown as the Managing Director of M/s. Maikaal Fibres Ltd. and Sh. Shyam Sunder Kejriwal (accused No.4) is described as the Director of M/s. Maikaal Fibres Ltd. As per the averments made in the complaint, the two companies, namely, accused Nos. 1 and 2 are group companies of M/s. Maikaal Group of Companies. Both the companies are having their factory I manufacturing units as well as registered office at Village Bheel Gaon, Tehsil Kesarwad, District Khargone, MP and also having several common Directors. Accused No.3 is Director in both the companies. It is alleged that accused Nos. 3 and 4 approached the complainant through one common person in the month of October, 2002 and held several meetings with the complainant company. They approached MI s. Maikaal Fibres Ltd. (accused No.1) with magnified financial credentials and allured the complainant to provide some finance to their cotton yarn export business on the pretext that the accused No.2 was having in hand a huge order for cotton yarn to be exported •to M/s. Remie AC, Switzerland. On their representation, the complainant financed a sum of Rs. 50 lakh to M/s. Maikaa1 Fibres Ltd. (accused No.2) as a short-term loan against fl Letter of Credit (in short the LoC). This LoC was transferred in the name of the complainant as a collateral security, which was opened by M/s. Remie AG, Switzerland in favour of accused No.2. To ensure repayment of loan, the accused Nos. 3 and 4 also issued and handed over four cheques, all dated 30.11.2002 for Rs. 12.5 lakh each from Current AI c No. 283 maintained with Bank of India, Ballygunge, Kolkata Branch. At the time of handing over the cheques they also stated that the complainant may deposit these cheques one by one, although they were bearing the same date. This was agreed on the request of accused No.1 to make the repayment convenient. The LoC, which was transferred in faovur of the complainant, was got encashed and the complainant adjusted the amount of loan and returned the excess amount to accused No.2. This was agreed on the request of accused No.1 to make the repayment convenient. The LoC, which was transferred in faovur of the complainant, was got encashed and the complainant adjusted the amount of loan and returned the excess amount to accused No.2. Thereafter, on 15.1.2003 accused No.2 again approached through its authorised representative Sh. Arun Garodia and requested for further loan. Memorandum of Understanding dated 15.1.2003 was executed between the complainant and the accused No.1 on the same terms and conditions on which the complainant had provided finance to the accused as mentioned above. Accused No.2 stood as guarantor for repayment of loan and the complainant gave loan of Rs. 25lakh to accused No.1 against the LoC vide cheque No. 236659 dated 17.1.2003. However, the accused Nos. 1 and 3 failed to transfer the letter of credit in favour of the complainant and, therefore, in terms of the said Memorandum of Understanding, the complainant did not provide further finance. In May 2003, it demanded repayment of its amount financed to accused No.1, who failed to return the payment. In these circumstances, the complainant called upon accused No.2, which was guarantor, to make the payment. Accused No.2 requested the complainant to present the cheques which it had given. These cheques were accordingly presented on the assurance of the accused No. 2 but were returned unpaid along with the memo dated 29.5.2003 with the remarks "funds insufficient." The demand notice dated 3.7.2003 was accordingly served upon the accused Nos. 1 to 3 calling upon them to pay the said amount of Rs. 25 lakh. However, needful was not done which forced the complainant to file complaint under Section 138 of the NI Act. It may also be mentioned that in this complaint it is further averred that the complaint is within limitation as per the averments made in para 18, which reads as under: "18. That the complaint is within time as information of the dishonour of cheque was received on 4.6.2003 and the legal notice to the accused was sent on 3.7.2003 by way of Registered A.D. Covers. The Registered AD Cover sent at the factory address of the accused has been duly received by them on 8.7.2003. Taking this as date of intimation of notice and on expiry of 15 days notice period tha0t is on 24.7.2003. The Registered AD Cover sent at the factory address of the accused has been duly received by them on 8.7.2003. Taking this as date of intimation of notice and on expiry of 15 days notice period tha0t is on 24.7.2003. The Cause of action accused in favour of the complainant and has been filed within 30 days after 24.7.2003. " 2. After recording the pre-summoning evidence, the learned MM took cognizance of the matter and issued summons to the accused persons. Notice was thereafter framed on 11.4.2005. It was, inter alia, argued that the complaint was barred by limitation. This plea of the accused persons was rejected. On behalf of accused Nos. 3 and 4 it was also submitted that they were not in charge and responsible for the affairs of the accused No. I company. This plea was also rejected on the ground that these are disputed questions of fact and have to be gone into at the time of trial. Not satisfied with this order the accused No.2 company as well as accused Nos. 3 and 4 have filed this petition under Section 482 of the Code of Criminal Procedure for quashing of the order dated 11.4.2005 and all proceedings in the said complaint case. 3. Let me first discuss the point of limitation as raised by the petitioners. As per the petitioners themselves, date of notice is 3.7.2003, which was received by accused No. 1 on 8.7.2003 and the complaint is filed on 23.8.2003. Fifteen days time is to be given to the addressee to make the payment. When the notice was received on 8.7.2003, 15 days time would expire on 23.7.2003. The complaint could be filed within one month thereof. Limitation for this purpose has to be reckoned from 24.7.2003 and the last date for filing the complaint would, therefore, be 23.8.2003. As the complaint was filed on 23.8.2003, it would be within the period of limitation. 4. In order to appreciate the other contentions, we will have to look into the nature of the complaint and the allegations on which it is founded. As mentioned above, case of the complainant is that loan of Rs. 25 lakh was given to the accused No.1 on the request of the accused No.2 company. Not only this, a Memorandum of Understanding dated 15.1.2003 was signed between the complainant and the accused No.2. As mentioned above, case of the complainant is that loan of Rs. 25 lakh was given to the accused No.1 on the request of the accused No.2 company. Not only this, a Memorandum of Understanding dated 15.1.2003 was signed between the complainant and the accused No.2. Thus, it is because of this MOU between the complainant and the accused No.2 that the complainant agreed to provide finance to the accused No. 1. Further, the accused No.2 even stood guarantor for repayment of the loan. When this loan could not be paid, accused No.2, as per the complaint, through the accused Nos. 3 and 4 represented that the cheques in question may be presented to recover the amount. The possibility of making such a representation cannot be ruled out an accused No.2 was the guarantor. In these circumstances, when the cheques drawn by accused No.2 are dishonoured, the complaint can be filed against accused No. 2 company. Accused No. 3 is the Managing Director of accused No. 2 and, therefore, he would be covered by the provisions of Section 141 of the NI Act as per the judgment of the Supreme Court in the case of SMS Pharmaceuticals v. Neeta Bhalla, 123 (2005) DLT 275= VII (2005) SL T 113=IV (2005) CCR 12 (SC)=IV (2005) BC 425 (SC)= 2005 (8) SCC 89 . 5. Insofar as the accused No.4 is concerned, it is only stated qua him that he is controlling the affairs of accused No.2 company. Apart from making bald averment that he is controlling the affairs of the accused No. 2, nothing more is attributed. In what manner he is controlling the affairs is not stated at all. In fact, even as per the complaint, notice was served only upon the accused Nos. 1 to 3 and it is stated in para 14 that after the receipt of the demand notice the accused Nos. 1 to 3 failed to make the payment. Thus, having regard to the principles laid down in SMS Pharmaceuticals v. Neeta Bhalla (Supra) the accused No.4 cannot be held criminally liable and summoning order qua him has to be quashed. 6. No doubt, as against the payment of Rs. 25 lakh, the complainant deposited four cheques of Rs. 12.5lakh, i.e. for a sum of Rs. 50 lakh, though the purpose could have been served by depositing two cheques. 6. No doubt, as against the payment of Rs. 25 lakh, the complainant deposited four cheques of Rs. 12.5lakh, i.e. for a sum of Rs. 50 lakh, though the purpose could have been served by depositing two cheques. May be, to got the interest or otherwise, other cheques were also deposited. Be as it may, merely because four cheques were deposited, that would, not mean that the complaint could be filed at all. This Court in the case of M/s. Malook Chand Agroils Ltd. and Anr. v. M/s. Prakash Industries Ltd., 2004 JCC [NI] 195 had held that if the demand for payment of cheques is severable, then it would not be invalid. In forming this opinion this Court relied upon the judgment of the Supreme Court in the cases of Suman Sethi v. Ajay K. Churiwal and Anr., I (2000) SLT 605=1 (2000) CCR 163 (SC)=II (2001) BC 144 (SC)= AIR 2000 SC 828 and Central Bank of India v. M/s. Saxons Farms, 1(2001) BC 12 (SC)=VIII (1999) SLT 399)=IV (1999) CCR 115 (SC)=1999 (4) RCR (Crl.) 324; and K.R. Indira v. Dr. G. Adinarayana, III (2005) BC 384 (SC)= VI (2003) SLT 330=IV (2003) CCR 204 (SC)= (2003) 8 SCC 300 . Since the amount of Rs. 25 lakh can be covered by two cheques of Rs. 12.5lakh each, the complaint could be filed on the due plus interest cannot be treated as illegal. One can understand the move on the part of the complainant in presenting four cheques. These cheques, stated at the cost of repetition, were of Rs. 12.5 lakh each. Even if first two cheques were dishonoured, since the complainant was in possession of more cheques, it may have presented the same with hope that if those cheques were cleared, its payment would be recovered. One cannot, therefore, take hyper-technical view of the matter. 7. Learned Counsel for the petitioner had relied upon the judgment of the Supreme Court in the case of K.R. Indira v. Dr. G. Adinarayana (supra) wherein the Apex Court held that it was necessary to make demand for the amount recovered by the bounced cheque in the notice of demand to be served upon the defaulter on the dishonour of the cheque. G. Adinarayana (supra) wherein the Apex Court held that it was necessary to make demand for the amount recovered by the bounced cheque in the notice of demand to be served upon the defaulter on the dishonour of the cheque. In the present case, in the notice dated 3.7.2003 the demand was made as under: "1, therefore, by means of this Notice call upon you to pay the loan amount of Rs. 25,00,000/- along with upto date interest@ 24% P.A. within a period of 15 DAYS from the date of receipt of this Notice failing which I have definite instructions from my client to initiate legal proceedings both CIVIL and CRIMINAL including one under Section 138 of the negotiable instruments Act, against you, as per law, in a competent Court of jurisdiction at NEW DELHI in which event, you shall be responsible for all the cost and consequences which please note." Before making this demand, there is an averment in the notice regarding dishonour or cheques. 8. As already pointed out above, the four cheques, which were dishonoured, are for a sum of Rs. 12.51akh each. Therefore, demand of Rs. 25 lakh would be covered by two cheques and, thus, it cannot be said that demand was not in terms of the bounced cheques as the sum total of two dishonoured cheques would exactly be Rs. 25 lakh and, therefore, it can be related to the cheques bounced. 9. No doubt in the order framing notice the learned MM has referred to all the four cheques, that may, at the most, be treated as an irregularity and can be rectified. This petition, therefore, succeeds qua the accused No. 4/ petitioner No.3 herein and is dismissed vis-a-vis other two petitioners. The learned trial Court is directed to amend the notice by specifically clarifying that the amount payable is Rs. 25lakh. 10. The petition is disposed of in these terms. Petition disposed of.