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2012 DIGILAW 176 (GUJ)

S. R. Apparels Pvt. Ltd. v. State of Gujarat

2012-03-02

M.R.SHAH

body2012
JUDGMENT : M.R. Shah, J. Present Criminal Miscellaneous Application under Section 482 of the Code of Criminal Procedure has been preferred by the applicants-original accused to quash and set aside the impugned complaint being Criminal Case No.3646 of 2009 pending in the Court of learned Metropolitan Magistrate (Special Negotiable Instruments Act) Court No.7, Ahmedabad filed by respondent no.2 herein-original complainant for the offences under Section 138 of the Negotiable Instruments Act. 2. Respondent No.2 herein-original complainant has filed the impugned complaint being Criminal Case No.3646 of 2009 against the applicants in the Court of learned Metropolitan Magistrate, Ahmedabad for the offences under Section 138 r/w Section 141 of the Negotiable Instruments Act for dishonour of the cheque issued by the applicant no.1 herein-original accused no.1 and signed by the applicant no.2 herein-original accused no.2 dated 19.1.2009. That in the said complaint, it is alleged and averred that the accused no.1 was purchasing raw cotton from the complainant since long and the complainant was maintaining the account for sale of goods and receipt of payment from accused no.1 from time to time in books of account maintained by the complainant. It is averred and alleged in the said complaint that balance outstanding and due by accused no.1 to complainant as per the account of accused no.1 in the books of complainant as on 1.4.2005 was Rs.23,53,360/-. That the accused no.1 agreed to pay interest @18% on the balance outstanding (with interest thereon) and accused no.2 issued a cheque no.454760 drawn on Vijiya Bank, HBR Layout, Kalyannagar, Bangalore on 1.4.2005 with authority to complainant to fill in rest of the columns of the said cheque for the amount that may be due and present it for payment at future date. That thereafter, claimed interest on the said amount of Rs.23,53,360/- upto 31.12.2008 and aggregating it to Rs.39,44,489/- deposited the said cheque dated 19.1.2009 with their banker and the said cheque came to be returned with an endorsement "Account Closed/Over Due". It is further averred and alleged in the said complaint that thereafter a statutory notice was served upon the accused as required under Section 138 of the Negotiable Instruments Act and accused persons gave two separate replies from two different advocates and denied the payment and liability. It is further averred and alleged in the said complaint that thereafter a statutory notice was served upon the accused as required under Section 138 of the Negotiable Instruments Act and accused persons gave two separate replies from two different advocates and denied the payment and liability. That thereafter, the complainant has filed the impugned complaint against the accused persons for the offences under Sections 138 r/w 141 of the Negotiable Instruments Act. That thereafter, learned Magistrate has directed to issue summons/process against the applicants -accused for the offences under Sections 138 r/w 141 of the Negotiable Instruments Act. Hence, being aggrieved and dissatisfied with the impugned complaint as well as order passed by the learned Magistrate issuing the summons/process against the applicants for the offences under Section 138 r/w 141 of the Negotiable Instruments Act, the applicants-original accused have preferred the present Criminal Miscellaneous Application under Section 482 of the Code of Criminal Procedure. 3. Shri P. M. Thakkar, learned Senior Advocate has appeared on behalf of the applicants-original accused. Shri P. M. Thakkar, learned Senior Advocate for the applicants has vehemently submitted that the applicants have not committed any offences as alleged for the offences under Section 138 of the Negotiable Instruments Act. It is submitted that even according to the complainant the cheque was given to the complainant on 1.4.2005 and the cheque in question is dated 19.1.2009 and therefore, there was no enforceable debt or liability of the accused at the time when the cheque was deposited as the same would be for a time barred debt. It is submitted that, therefore, when the debt being clearly barred by limitation, the said debt not being legally recoverable it cannot be said that for dishonour of the cheque issued for the time bared debt, the applicants have committed the offences under Section 138 of the Negotiable Instruments Act. It is submitted that, therefore, when the debt being clearly barred by limitation, the said debt not being legally recoverable it cannot be said that for dishonour of the cheque issued for the time bared debt, the applicants have committed the offences under Section 138 of the Negotiable Instruments Act. In support of his above submission, Shri P. M. Thakkar, learned Senior Advocate for the applicants has relied upon the decision of the Kerala High Court in the case of Sasseriyil Joseph v. Devassia, reported in 2001 CrLJ 24 (which is reported to have been confirmed by the Hon'ble Supreme Court) as well as decision of the Andhra Pradesh High Court in the case of Girdhari Lal Rathi v. P. T. V. Ramanujachari & Anr, reported in 1997(2) Crimes 658 as well as unreported decisions of the Delhi High Court in CRL. M.C Nos. 1869 of 2007 & 6479 of 2007. 3.1. Shri P. M. Thakkar, learned Senior Advocate for the applicants has further submitted that as observed by the Hon'ble Supreme Court in the case of Krishna Janardhan Bhat v. Dattatraya, reported in (2008) 4 SCC 54 : 2008 (1) NIJ 210 (SC), more particularly para 21 & 22, Section 139 of the Negotiable Instruments Act merely raises a presumption in favour of holder of the cheque that the same has been issued for discharge of any debt or other liability, however existing of legally recoverable debt is not a matter of presumption under Section 139 of the Negotiable Instruments Act. Therefore, it is submitted that at the relevant time when the cheque dated 19.1.2009 was deposited in the Bank, there was no legal enforceable debt and therefore, it cannot be said that for dishonour of the said cheque, the applicants have committed any offences under Section 138 of the N.I. Act. 3.2. Shri P. M. Thakkar, learned Senior Advocate for the applicants has further submitted that even otherwise considering the averment in the complaint a blank cheque was alleged to have been given by the applicants in the year 2005 and the particulars in the cheque are filled in by the complainant, the cheque which was given to the complainant in the year 2005, was not a cheque or Bill of Exchange. It is further submitted that even at the relevant time when the cheque was given in the year 2005 it was not for any ascertained amount and the amount and debt etc. is filled in by the complainant subsequently and therefore, for such an instruments which cannot be said to be a cheque or Bill of Exchange for ascertain amount, it cannot be said that the applicants have committed an offences under Section 138 of the Negotiable Instruments Act. Shri P. M. Thakkar, learned Senior Advocate for the applicants has heavily relied upon Sections 5, 6 and 13 of the Negotiable Instruments Act in support of his submission that the cheque in question which has been dishonoured cannot be said to be a "Bill of Exchnage" as defined under Section 5 of the Negotiable Instruments Act and/or "cheque" as defined under Section 6 of the Negotiable Instruments Act and/or " Negotiable Instruments" as defined under Section 13 of the Negotiable Instruments Act. It is further submitted that therefore, for dishonour of such incomplete and/or inchoate instrument, the applicants-original accused can not held liable for the offences under Section 138 of the Negotiable Instruments Act. 3.3. Shri P. M. Thakkar, learned Senior Advocate for the applicants has further submitted that even the cheque in question which has been dishonoured was stolen by one Hemant Shah administering person of the complainant who was also the Director of the accused no.1 company and the said cheque has been misused by the complainant. Therefore, it is submitted that when the cheque in question has been misused, the applicants cannot be held liable for the offences under Section 138 of the Negotiable Instruments Act. By making above submissions and relying upon the above decisions, it is requested to allow the present application and to quash and set aside the order passed by the learned Magistrate issuing the summons/process against the accused persons. 4. Application is opposed by respondent no.2-original complainant and affidavit in reply is filed by the original complainant opposing the present application. However, at the time of final hearing of the present application, learned advocate for the respondent no.2-original complainant has chosen to remain absent. 4. Application is opposed by respondent no.2-original complainant and affidavit in reply is filed by the original complainant opposing the present application. However, at the time of final hearing of the present application, learned advocate for the respondent no.2-original complainant has chosen to remain absent. From the affidavit in reply, it appears that the complainant has relied upon the decision of the Hon'ble Supreme Court in the case of A.V. Murthy v. V.S. Nagabasvanna, reported in AIR 2002 SC 952 : 2009 (1) NIJ 27 (SC) (NOC) submitting that as held by the Hon'ble Supreme Court in the said decision complaint alleging offence of dishonour of a cheque drawn to pay back the amount advanced 4 years back cannot be dismissed at the threshold taking it that debt is not legally enforceable. It is submitted that as held by the Hon'ble Supreme Court in the said decision that payee may prove validity of such debt with help of entry in balance sheet, sales tax returns and income tax returns. In the affidavit in reply, the complainant has also relied upon the decisions of the Hon'ble Supreme Court in the case of Anil Kumar Sawhney v. Gulshan Rai, reported in (1993) 4 SCC 424 : 2009 (1) NIJ 42 (SC) (NOC) as well as in the case of Kumar Exports v. Sharma Carpets reported in (2009) 2 SCC 513 : 2009 (1) NIJ 100 (SC). The complainant has also relied upon the decision of the Andhra Pradesh High Court in the case of V. Satyanarayan Raju v. G.B. Gangadhara Reddy & Anr, reported in 2008(2) DCR 226 : 2009 (1) NIJ 100 (AP) (NOC) by submitting that as held by the Andhara Pradesh High Court that a cheque issued in respect of time barred debt, revalidates the debt. Therefore, it is requested not to exercise the powers under Section 482 of the Code of Criminal Procedure and to quash and set aside the impugned complaint at the threshold. 5. Petition is opposed by Shri Dabhi, learned Additional Public Prosecutor appearing on behalf of the State. Therefore, it is requested not to exercise the powers under Section 482 of the Code of Criminal Procedure and to quash and set aside the impugned complaint at the threshold. 5. Petition is opposed by Shri Dabhi, learned Additional Public Prosecutor appearing on behalf of the State. It is submitted that whether at the relevant time when the cheque was deposited in the Bank, it was legally enforceable debt or not is the defence of the accused which is required to be considered at the time of trial on leading appropriate evidence and while rebutting the presumption as provided under Section 139 of the N.I. Act. 5.1. It is further submitted by Shri Dabhi, learned APP that at the time when the cheque in question has been issued by the original accused no.1 and signed by the original accused no.2, it is specifically averred in the complaint that blank cheque was given to the complainant with authority to fill in the particulars in the cheque for the amount due and payable with interest as on 31.12.2008. Therefore, the aforesaid is to be tested at the time of trial. It is further submitted that even otherwise under Section 20 of the Negotiable Instruments Act it gives authority to the holder of the cheque and/or instrument to fill in the particulars and make the incomplete cheque/instrument as complete. It is submitted that at the relevant time when the cheque is issued, it might be incomplete cheque or instrument however the same can be made complete by the holder in due course of the cheque or instrument by filling the particulars. It is submitted that therefore, considering Section 16 r/w 20 of the Negotiable Instruments Act such an eventuality of incomplete and/or inchoate instrument is contemplated under the statute. Shri Dabhi, learned APP has heavily relied upon the decision of the learned Single Judge in the case of Hitenbhai Parekh Proprietor-Parekh Enterprises v. State of Gujarat, reported in 2009(3) GLH 742 as well as unreported decision of this Court dated 25.7.2011 in SCR.A. No.1888 of 2011 as well as decision of the Karnataka High Court in the case reported in AIR 2000 Karnataka 169 by submitting that in the aforesaid decision, it is held that the holder in due course of the cheque and instrument has an implied authority to filling the blanks in the cheque/instrument. By making above submissions and relying upon the above decisions, it is requested to dismiss the present application. 6.1. Heard the learned advocates for the respective parties at length. The applicants have prayed to quash and set aside the impugned complaint filed by respondent no.2 herein against them for the offences under Sections 138 r/w 141 of the Negotiable Instruments Act and mainly on the ground that at the relevant time when the cheque was deposited there was no legal enforceable debt or liability, as according to the complainant himself the cheque was blank signed cheque and was given to the complainant in the year 2005. However, it is required to be noted that in the complaint there are specific averments and allegation that in the books of account a sum of Rs.23,53,360/- was due and payable by the accused no.1 as on 1.4.2005 and that the accused no.1 agreed to pay interest at the rate of 18% p.a. on the said outstanding and the accused no.2 issued the cheque in question No. 454740 on 1.4.2005 with authority to complainant to fill in the rest of the column of the said cheque for the amount that may be due and present it for payment of future debt. That thereafter, under the aforesaid authority the complainant has filled in the amount with interest at the rate of 18% p.a. upto 30.12.2008 and has deposited the said cheque which has been dishonoured. Under the circumstance, when the cheque in question was given for the existing debt as on 1.4.2005 for future liability with interest and when subsequently the particulars were filled in it cannot be said that at the time when the cheque was deposited, there was no legally enforceable debt or liability. The complainant can on leading the appropriate evidence by producing the books of account etc. can very well prove that there was legally enforceable debt or liability. 6.2. The complainant can on leading the appropriate evidence by producing the books of account etc. can very well prove that there was legally enforceable debt or liability. 6.2. Now, so far as the contention on behalf of the petitioners that at the time when the cheque was deposited there was no enforceable debt and/or it was for the time barred debt and therefore, the cheque which has been dishonoured for the debt which was time barred the complaint under Section 138 of the Negotiable Instruments Act is not maintainable is concerned, looking to the averments and allegations in the complaint, the impugned complaint cannot be quashed and set aside in exercise of powers under Section 482 of the Code of Criminal Procedure. Looking to the specific averments and allegations alleging that the complainant can claim principal amount with interest as and when due and payable and the same was reflected in the books of account, the aforesaid becomes the question of evidence, which is required to be considered at the time of trial. Whether at the time of depositing of the cheque there was legally enforceable debt or not is a question which is required to be considered at the time of trial on appreciation of evidence. As stated above, as such there is presumption as provided under Section 139 r/w Section 118 of the Negotiable Instruments Act that the cheque has been issued for legally enforceable debt, however the same is rebuttable. Therefore, the submission on behalf of the petitioners to quash and set aside the impugned complaint on the aforesaid ground, in exercise of powers under Section 482 of the Code of Criminal Procedure cannot be accepted. 6.3. Even otherwise, considering the presumption under Section 139 of the Negotiable Instruments Act there is a presumption in favour of the holder of the cheque that the same has been issued for discharge of any debt or other liability. Whether such a debt or other liability was legally enforceable or not is a question which is required to be considered at the time of trial on rebutting such presumption. Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of Krishna Janardhan Bhat (supra) is concerned, it is required to be noted that before the Hon'ble Supreme Court the case was after the trial and the entire evidence was before the Court. Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of Krishna Janardhan Bhat (supra) is concerned, it is required to be noted that before the Hon'ble Supreme Court the case was after the trial and the entire evidence was before the Court. Under the circumstance, the decision of the Hon'ble Supreme Court in the case of Krishna Janardhan Bhat (supra) would not be of any assistance to the applicants at this stage while considering the application under Section 482 of the Code of Criminal Procedure when the evidence is yet to be led. Similarly, decision of the Kerala High Court in the case of Sasseiyil Joseph (supra) which is reported to be confirmed by the Hon'ble Supreme Court also would not be of any assistance to the applicants at this stage as before the Kerala High Court also the case was after the trial and entire evidence was before the Court. 6.4. Now, so far as contention on behalf of the applicants that at the relevant time when the cheque was given in the year 2005 it was not for an ascertained amount and it was blank cheque and therefore, it cannot be said to be a cheque or Bill of Exchange and therefore, for dishonour of such incomplete and/or inchoate cheque the applicants cannot be held liable for the offences under Section 138 of the Negotiable Instruments Act is concerned, it is required to be noted that at the relevant time when the cheque is issued the same might be incomplete and/or blank but considering Section 20 of the Negotiable Instruments Act it gives implied authority to the holder of the cheque or instrument to fill the blanks and make it complete. Therefore, what is required to be considered is whether on the date on which the cheque is deposited the same is complete or not. The learned Single Judge in the case of Hitenbhai Parekh Proprietor-Parekh Enterprises (supra)(para 10) had occasion to consider such submission and considering the relevant provision of the Negotiable Instruments Act, more particularly, Section 20 of the Negotiable Instruments Act, the learned Single Judge has specifically held that the holder of the cheque and/or instrument has implied authority to fill the blank in the cheque and make it complete. Relying upon said decision, this Court has also taken similar view in its decision dated 25.7.2011 in SCR.A No.1888 of 2011. 6.5. Now, so far as contention on behalf of the applicants that the cheque was stolen by one Hemant Shah who was also the Director of the accused no.1 company and the said cheque was misused are concerned, all the aforesaid are defences of the applicants which are required to be considered at the time of trial. At this stage, for making out case under Section 138 of the Negotiable Instruments Act what is required to be considered is whether the cheque is issued by the accused no.1 which has been signed by the accused no.2 and whether such cheque has been dishonoured or not. At the time of considering application under Section 482 of the Code of Criminal Procedure, all the defences of the accused are not required to be considered, more particularly, in light of Section 139 r/w 118 of the N.I. Act. 6.6. Under the circumstance, it cannot be said that the learned trial Court has committed any error and/or illegality in issuing the process/summons for offence under Section 138 r/w 141 of the Negotiable Instruments Act, which deserves to be quashed and set aside by this Court in exercise of powers under Section 482 of the Code of Criminal Procedure. 7. In view of the above and for the reasons stated above, application fails and same deserves to be dismissed and is accordingly dismissed. Rule is discharged. Ad-interim relief granted earlier stands vacated forthwith. However, it is observed that all the defences which might be available to the applicants under law are kept open, which be considered by the learned trial Court at the time of trial in accordance with law and on merits. Application dismissed.