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2017 DIGILAW 328 (ALL)

MANISH SINGHAL v. STATE OF U. P.

2017-01-24

NAHEED ARA MOONIS

body2017
JUDGMENT Hon’ble Naheed Ara Moonis, J.—Heard learned counsel for the applicant, the learned AGA for the State and perused the record. The instant application has been filed invoking the inherent power of this Court under Section 482 Cr.P.C. to quash the proceeding pursuant to the summoning order dated 19.2.2016 passed by the learned Additional Chief Judicial Magistrate, Shikohabad, District Firozabad in Complaint Case No. 1812 of 2015 (Dushyant Kumar Yadav, Director A.L.P. Milk Foods (Pvt) Limited v. Manish Singhal) under Section 138 of the Negotiable Instrument Act (hereinafter referred as “Act”), P.S. Shikohabad, District Firozabad. 2. The factual matrix of the case in short conspectus is that the opposite party No. 2 filed a complaint on 18.8.2015 before the Court of Additional Chief Judicial Magistrate, Shikohabad, District Firozabad which was registered as Complaint Case No. 1812 of 2015, under Section 138 of the Negotiable Instrument Act contending therein that the complainant-opposite party No. 2 had supplied milk food product worth of Rs. 7,98000/- to the applicant’s Firm M/s Chiya Riya Traders, Saharanpur and in discharge of payment of liability issued three cheques bearing Nos. 001476,001477 and 001478 of Rs. 2,50,000/- each dated 26.6.2015. Thereafter the aforesaid cheques issued by the applicant were presented by the opposite party No. 2 before the Bank which was returned with remark that fund is insufficient in the account of the applicant. This information was received by the opposite party No. 2 on 27.6.2015. Thereafter a registered legal notice dated 7.7.2015 was sent to the applicant with a request to pay the amount of cheques. The said notice was returned back undelivered to the opposite party No. 2 with the remark that it could not be served due to incomplete address of the applicant. The opposite party No. 2 again sent a legal notice dated 17.7.2015 which was duly served upon the applicant. Despite the notice duly served on 17.7.2015 the applicant did not make any payment nor sent any reply, hence the opposite party No. 2 filed a complaint on 18.8.2015 before the Court of Additional Chief Judicial Magistrate, Shikohabad, District Firozabad which was treated as complaint and his affidavit as evidence under Section 200 Cr.P.C., besides affidavit the complainant had also filed documentary evidence vis. original cheque returned receipts of registered notice, bank memo and other documents under Section 202 Cr.P.C. on the basis whereof the learned Magistrate found that prima facie case is made out against the applicant, hence passed the order dated 19.2.2016 summoning the applicant to face trial under Section 138 of the Act. 3. It is submitted by the learned counsel for the applicant that the firm of the applicant had informed the opposite party No. 2 that the milk products are of inferior quality which is not liked by consumer, hence the firm of the applicant is not interested in milk product of the complainant and, therefore, asked the opposite party No. 2 to returned the alleged cheques which had been given as security amount. But the complainant paid no heed to the notice, the applicant moved an application before the bank for stop payment of the aforesaid cheques. The application was moved to the bank on 28.11.2014. Therefore, the prosecution of the applicant under Section 138 of the Act would not be maintainable where the cheques have been issued as security amount and became dishonoured. Learned counsel has further led stress that the cheques have been issued by the M/s Chiya Riya Traders, Saharanpur and by its authorized signatory but the complainant had not made M/s Chiya Riya Traders, Saharanpur as party in the complaint. 4. It is further submitted that the notice dated 17.7.2015 which is said to have been sent by the complainant was never served upon the applicant as the notice itself does not show any date and time when it was served upon the applicant. Learned Magistrate has also lost sight of the fact regarding the service of legal notice, which was returned back to the complainant un-served due to incomplete address of the applicant. The applicant in between 11.7.2015 to 24.7.2015 was under legal custody in connection with a case under Sections 420,467,468 IPC and was released on bail on 29.7.2015, therefore, the service of legal notice dated 17.7.2015 upon the applicant does not arise at all. The legal notice was never served upon the applicant and without service of legal notice the proceeding under Section 138 of the Act against him cannot be initiated. 5. It is further submitted that the complaint was also filed beyond stipulated period as provide under the Act. The legal notice was never served upon the applicant and without service of legal notice the proceeding under Section 138 of the Act against him cannot be initiated. 5. It is further submitted that the complaint was also filed beyond stipulated period as provide under the Act. The complaint should have been filed within 45 days but the same has been filed after 51 day, hence it is time barred and is not maintainable. It is also submitted that the opposite party No. 2 has filed the complaint within the jurisdiction of Firozabad whereas the applicant resides in Saharanpur and he was not aware about the proceeding initiated against him and as such he was not served with the summon and could not appear before the Court concerned, on account of which, without issuing bailable and non-bailable warrant, the process under Section 82 Cr.P.C. has been issued against him. Therefore, the process under Section 82 Cr.P.C. is absolutely illegal and unjust. The entire proceeding initiated against the applicant in the absence of impleading the Firm is vitiated in law. It is lastly submitted that no prima facie case is made out against the applicant as the entire allegations made in the complaint are totally false and fabricated. Hence the prosecution of the applicant is liable to be quashed. 6. Per contra learned A.G.A. has contended that the complainant-opposite party No. 2 had suffered great lost of Rs. 7,98000/- which has been paid by the applicant through cheques and the same has not been disputed by the applicant. Thereafter the applicant had requested the bank for making stop payment of the amount, which itself shows malice intention of the applicant to cheat the complainant. There is also no dispute that the cheque was not issued by the applicant. The applicant must have a sufficient fund in the account of the date of signing of the cheque, but when the cheque was presented, the amount was found insufficient in the account of the applicant. Hence the burden of proving that the cheque was not dishonour on account of insufficiency of fund is on the applicant and on this ground the complaint filed by the opposite party No. 2 cannot be quashed. 7. Hence the burden of proving that the cheque was not dishonour on account of insufficiency of fund is on the applicant and on this ground the complaint filed by the opposite party No. 2 cannot be quashed. 7. It is further submitted that instead of giving reply to the legal statutory notice after the cheque was returned with the endorsement of insufficient fund, the applicant could have given the explanation disowning his liability to pay any amount and hence there is no illegality or perversity in the order impugned. There are certain other cases of the Hon’ble Apex Court where it has been held that even if the argument sake it is expected that the company has not been impleaded as party. It is no bar to initiate criminal proceeding against other persons. The cheque has been signed by the applicant who is now claiming himself to be Director of the company is liable for the offence as a signatory of a cheque responsible for the incriminating act and hence there is no infirmity in the complaint filed against the applicant. The company acts through its Director or Authorized Officer and as such the proceeding against the applicant cannot be quashed solely on the ground that the company has not been impleaded as an accused. Therefore, the prosecution can be exclusively maintained against the Director or Office-in-charge dependent upon the company and hence the application on behalf of the applicant deserves to be dismissed. 8. Having considered the submissions advanced by the learned counsel for the parties and having perused the material placed on record, it is admitted fact that the applicant is the signatory of these cheques in question which has given rise to the filing of complaint for prosecution under Section 138 of the Act as the cheques were dishonoured on account of insufficiency of fund in the account of the applicant. The plea which has been raised only to escape from the liability which has solely been created for sake of defence. Each case has to be considered on its own merit. The facts of the case in hand is entirely different. Even if there is any technical flaw as contended by the learned counsel for the applicant. 9. The plea which has been raised only to escape from the liability which has solely been created for sake of defence. Each case has to be considered on its own merit. The facts of the case in hand is entirely different. Even if there is any technical flaw as contended by the learned counsel for the applicant. 9. It is further submitted that there are catena of decision of Hon’ble the Apex Court where vicarious liability cannot be fixed without service of notice to the Proprietor of the Firm in the case of Anil Hada v. Indian Acrylic Ltd., 1999 Law Suit (SC) 1289. The Hon’ble Apex Court has held that without company arraigned as an accused the proceeding initiated would not be maintainable either against company or Director. Commission of offence by company is an express condition precedent of vicarious liability of others and, therefore, only when the company is prosecuted then only the other persons mentioned in other categories are liable to be prosecuted for any offence under the Act. 10. Thus the facts of the case in hand is entirely different, even if there was any technical flaw as contended by the learned counsel for the applicant, it is curable flaw and the trial Court may implead the company also as an accused, if there is any role of paying cheque through or by the company is proved in rebuttal. If any such objection is raised by the applicant, even if the prosecution proceeding against the company is not taken, it is no bar for proceeding against the applicant and as such the proceeding cannot be installed merely on this ground that the opposite party No. 2 should have impleaded company as party. The applicant may raise objection at the appropriate stage which shall be considered by the Court below. It is well-settled law that cognizance is always taken of the offence not of the offender and once the Court below has found that the cheques were issued by the applicant whether it was payment towards dues of the company or in any personal capacity will be considered only at the trial stage. The complainant has not stated that he was responsible to conduct the business of its firms and as such complaint could not be quashed on the said ground as the said question has to be adjudicated at trial stage. The complainant has not stated that he was responsible to conduct the business of its firms and as such complaint could not be quashed on the said ground as the said question has to be adjudicated at trial stage. The several disputed question of facts as raised by the learned counsel for the applicant has to be adjudicated by the trial Court as per the evidence to be adduced by the parties during the course of trial and while doing so the submission made on point of law can also be appropriately gone into by the trial Court. 11. The language used in Section 138 of the Act, it has five components, namely, (1)drawing of the cheque; (2) presentation of the cheque to the bank; (3) returning the cheque unpaid by the drawee bank; (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount; and (5) failure of the drawer to make payment within 30 days of the receipt of the notice.” 12. Thus in the present case the complaint was filed by the opposite party No. 2 after fulfilling the aforesaid five components. The question whether the notice was received by the applicant or not is a disputed question of fact which has to be decided by the trial Court as per the evidence to be adduced by the parties during the course of trial where the complainant had given notice through his counsel and there is mis-description of date and time will not militate and derogate the validity of the notice, particularly when the applicant has himself issued three cheques. According to the case of the applicant, he has asked the bank for stop payment then it his liability to repay the amount as mentioned in the cheque and as such the applicant cannot be escaped from the liability by raising the plea of stop payment, then inference of dishonest could be drawn. Burden of proving that cheque had not been issued for any debt or liability is on the applicant and that stop payment has not been asked because of insufficiency of funds. Any cheque whether issued towards repayment of debt or liability as a security if dishonoured, the drawer of the cheque incurs liability of prosecution under Section 138 of the Act. Any cheque whether issued towards repayment of debt or liability as a security if dishonoured, the drawer of the cheque incurs liability of prosecution under Section 138 of the Act. A cheque even if issued as a security for payment, it is a negotiable instrument at the hands of payee. Merely it is issued as a security is no ground to exonerate the penal liability. Hence this Court does not find it a fit case to interfere with the order impugned passed by the Court below initiating proceeding under Section 138 of the Act against the applicant. 13. The Apex Court has also laid down the guidelines in the case State of Haryana v. Bhajanlal, 1999 SCC(Crl) 426 and State of Bihar v. P.P. Sharma, 1992 SCC(Crl) 192.where the criminal proceedings could be interfered and quashed in exercise of its power envisaged under Section 482 Cr.P.C. 14. From the aforesaid decisions the Apex Court has settled the legal position for quashing of the proceedings at the initial stage. The test to be applied by the Court is to whether uncontroverted allegation as made prima facie establishes the offence and the chances of ultimate conviction is bleak and no useful purpose is likely to be served by allowing criminal proceedings to be continue. In S.W. Palanattkar and others v. State of Bihar, 2002(44) ACC 168, it has been held by the Hon’ble Apex Court, that quashing of the criminal proceedings is an exception than a rule. The inherent powers of the High Court under Section 482 Cr.P.C. itself envisages three circumstances under which the inherent jurisdiction may be exercised: (i) to give effect an order under the Code; (ii) to prevent abuse of the process of the Court; (iiii) to otherwise secure the ends of justice. 15. The power of High Court is very wide but should be exercised very cautiously to do real and substantial justice for which the Court alone exists. The High Court would not embark upon an inquiry as it is the function of the Trial Judge/Court. The interference at the threshold of quashing of the criminal proceedings in case in hand cannot be said to be exceptional as it discloses prima facie commission of an offence. Only this has to be seen whether prima facie cognizable offence is made out or not. Even if there is suspicion about commission of offence the charge can be framed. The interference at the threshold of quashing of the criminal proceedings in case in hand cannot be said to be exceptional as it discloses prima facie commission of an offence. Only this has to be seen whether prima facie cognizable offence is made out or not. Even if there is suspicion about commission of offence the charge can be framed. 16. It is settled law that once a cheque is issued for the discharge of any debt or liability it shall be presumed that it was issued by the drawee. The burden is upon the applicant to disprove that it was not issued by him. Therefore, the order impugned does not suffer from manifest illegality to thwart the legitimate prosecution, hence the prayer to quash the proceeding is refused. The application is bereft of merits and is accordingly dismissed. 17. However, the applicant is directed to appear and surrender before the Court below and apply for bail within a period of thirty days from today, the prayer for bail shall be considered expeditiously in accordance with law after hearing the Public Prosecutor. 18. The Court below shall proceed with the case expeditiously, in accordance with law. 19. In case the applicant fails to surrender within the stipulated period the Court below shall take appropriate action against him.