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Allahabad High Court · body

2017 DIGILAW 97 (ALL)

RAKESH GUPTA v. STATE OF U. P.

2017-01-09

OM PRAKASH VII

body2017
JUDGMENT Hon’ble Om Prakash-VII, J.—The present application under Section 482 CrPC has been filed by the applicant with the prayer to quash the entire criminal proceedings of complaint case No. 363 of 2009 under Section 138 Negotiable Instruments Act (in short ‘the Act’), P.S. Hari Parvat, District Agra pending before the Additional Chief Judicial Magistrate/Additional Civil Judge (SD), Court No. 5, Agra as also the summoning order dated 9.10.2009. Further prayer has been made to stay the further proceedings of the aforesaid case. 2. Heard Shri A.K. Bajpayee, learned counsel for the applicant, Shri J.K. Srivastava, learned counsel for the complainant-opposite party No. 2 as well as the learned AGA appearing for the State and perused the record. It is submitted by the learned counsel for the applicant that the cheque in question, said to have been issued in the matter, was not issued in discharge of any legally enforceable debt or liability. The cheque presented before the Bank was only as security cheque. Though the cheque in question was returned on the ground of insufficiency of fund yet notice sent to the applicant was never served, hence, the summoning order passed in the matter is illegal and without application of judicial mind. It is further submitted that nothing has been mentioned in the complaint or affidavit about the existing debt or liability. The concerned Magistrate did not consider this fact and erred in passing the impugned order. Cheque said to have been issued in the matter does not attract essential ingredients required under Section 138 of the Act. In support of his submissions, learned counsel for the applicant placed reliance on the following decisions: 1. Amanullah and another v. State of Bihar and others, (2016) 6 SCC 699 . 2. M/s Indus Airways Pvt. Ltd. and others v. M/s Magnum Aviation Pvt. Ltd., 2014(85) ACC 958. 3. M.S. Narayana Menon Alias Mani v. State of Kerala and another, (2006) 6 SCC 39 . 4. Joseph Vilangadan v. Phenomenal Health Care Services Ltd. and another, 2010 LawSuit (Bom) 2063. 3. On the other hand, learned counsel for the complainant/opposite party No. 2 as well as the learned AGA appearing for the State submitted that in the application under Section 482 CrPC and the rejoinder-affidavit, the applicant himself has admitted/mentioned the liability for which the cheque was issued. 3. On the other hand, learned counsel for the complainant/opposite party No. 2 as well as the learned AGA appearing for the State submitted that in the application under Section 482 CrPC and the rejoinder-affidavit, the applicant himself has admitted/mentioned the liability for which the cheque was issued. Non-disclosure of any debt or liability in the complaint if the cheque in question was dishonoured on the ground of insufficiency of fund, will not create any bar in continuance of proceeding under Section 138 of the Act. Signatures on the cheque is not denied. All the facts raised before this Bench may be raised during trial before the Court concerned. There is no illegality or infirmity in the impugned summoning order. It is further submitted that it has been clearly mentioned in the complaint and in the affidavit that cheque was issued by the applicant and the same was presented before the Bank. 4. I have considered the rival submissions made by the learned counsel for the parties and have gone through the entire record including the case laws. Before analyzing the facts of the present case, I find it necessary to quote the relevant paragraphs of the case laws relied upon by the learned counsel for the applicant. 5. In Amanullah case (supra), the Hon’ble Supreme Court has held as under (paragraphs 26 and 27 of the said SCC. “26. The proposition of law relating to Section 482 of the CrPC has been elaborately dealt with by this Court in Bhajan Lal’s case (supra). The relevant paras 102 and 103 of which read thus: “102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. (1) Where the allegations made 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 other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by 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 uncontroverted 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 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 concerned Act (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 concerned Act, 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 spite him due to private and personal grudge. 103. (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 spite him due to private and personal grudge. 103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the Court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice.” 27. Further, this Court in the case of Rajiv Thapar v. Madan Lal Kapoor, (2013) 3 SCC 330 , has laid down certain parameters to be followed by the High Court while exercising its inherent power under Section 482 of the CrPC, in the following manner: “29. The issue being examined in the instant case is the jurisdiction of the High Court under Section 482 CrPC, if it chooses to quash the initiation of the prosecution against an accused at the stage of issuing process, or at the stage of committal, or even at the stage of framing of charges. These are all stages before the commencement of the actual trial. The same parameters would naturally be available for later stages as well. The power vested in the High Court under Section 482 CrPC, at the stages referred to hereinabove, would have far-reaching consequences inasmuch as it would negate the prosecution’s/complainant’s case without allowing the prosecution/complainant to lead evidence. Such a determination must always be rendered with caution, care and circumspection. To invoke its inherent jurisdiction under Section 482 CrPC the High Court has to be fully satisfied that the material produced by the accused is such that would lead to the conclusion that his/their defence is based on sound, reasonable, and indubitable facts; the material produced is such as would rule out and displace the assertions contained in the charges levelled against the accused; and the material produced is such as would clearly reject and overrule the veracity of the allegations contained in the accusations levelled by the prosecution/complainant. It should be sufficient to rule out, reject and discard the accusations levelled by the prosecution/complainant, without the necessity of recording any evidence. For this the material relied upon by the defence should not have been refuted, or alternatively, cannot be justifiably refuted, being material of sterling and impeccable quality. The material relied upon by the accused should be such as would persuade a reasonable person to dismiss and condemn the actual basis of the accusations as false. In such a situation, the judicial conscience of the High Court would persuade it to exercise its power under Section 482 CrPC to quash such criminal proceedings, for that would prevent abuse of process of the Court, and secure the ends of justice. 30. Based on the factors canvassed in the foregoing paragraphs, we would delineate the following steps to determine the veracity of a prayer for quashment raised by an accused by invoking the power vested in the High Court under Section 482 CrPC: 30.1. Step one: whether the material relied upon by the accused is sound, reasonable, and indubitable i.e. the material is of sterling and impeccable quality? 30.2. Step two: whether the material relied upon by the accused would rule out the assertions contained in the charges levelled against the accused i.e. the material is sufficient to reject and overrule the factual assertions contained in the complaint i.e. the material is such as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false? 30.3. Step three: whether the material relied upon by the accused has not been refuted by the prosecution/complainant; and/or the material is such that it cannot be justifiably refuted by the prosecution/complainant? 30.4. Step four: whether proceeding with the trial would result in an abuse of process of the Court, and would not serve the ends of justice? 30.5. If the answer to all the steps is in the affirmative, the judicial conscience of the High Court should persuade it to quash such criminal proceedings in exercise of power vested in it under Section 482 CrPC. Such exercise of power, besides doing justice to the accused, would save precious Court time, which would otherwise be wasted in holding such a trial (as well as proceedings arising therefrom) specially when it is clear that the same would not conclude in the conviction of the accused.” (emphasis supplied) 6. Such exercise of power, besides doing justice to the accused, would save precious Court time, which would otherwise be wasted in holding such a trial (as well as proceedings arising therefrom) specially when it is clear that the same would not conclude in the conviction of the accused.” (emphasis supplied) 6. In M/s Indus Airways Pvt. Ltd. Case (supra), the Apex Court held as under (paragraphs 19 and 20 of the said decision): “19. The above reasoning of the Delhi High Court is clearly flawed inasmuch as it failed to keep in mind the fine distinction between civil liability and criminal liability under Section 138 of the N.I. Act. If at the time of entering into a contract, it is one of the conditions of the contract that the purchaser has to pay the amount in advance and there is breach of such condition then purchaser may have to make good the loss that might have occasioned to the seller but that does not create a criminal liability under Section 138. For a criminal liability to be made out under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. We are unable to accept the view of the Delhi High Court that the issuance of cheque towards advance payment at the time of signing such contract has to be considered as subsisting liability and dishonour of such cheque amounts to an offence under Section 138 of the N.I. Act. The Delhi High Court has traveled beyond the scope of Section 138 of the N.I. Act by holding that the purpose of enacting Section 138 of the N.I. Act would stand defeated if after placing orders and giving advance payments, the instructions for stop payments are issued and orders are cancelled. In what we have discussed above, if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability. 20. 20. In our opinion, the view taken by Andhra Pradesh High Court in Swastik Coaters (supra), Madras High Court in Balaji Seafoods (supra), Gujarat High Court in Shanku Concretes (supra) and Kerala High Court in Ullas (supra) is the correct view and accords with the scheme of Section 138 of the N.I. Act.” 7. Section 138 Negotiable Instruments Act reads as follows: “138. Dishonour of cheque for insufficiency, etc., of funds in the account.—Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless— (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, 20 [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.—For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.” 8. Explanation.—For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.” 8. If the propositions laid down in the above decisions and the provisions of Section 138 of the Act are confronted with the facts of the present matter, certainly it will emerge that nothing was mentioned by the complainant in the complaint about the existing legally enforceable debt or liability for which the said cheque was issued. Until and unless cheque said to have been issued in the matter was issued in discharge of any legally enforceable debt or other liability, provisions of Section 138 of the Act shall not attract in the matter. In the affidavit filed in support of the complaint nothing has been mentioned about the liability. Only following facts have been mentioned in paragraph 2 of the complaint, which are as under: **;g fd vfHk;qDr }kjk fnukad 18-4-2008 dks oknh ds Hkqxrku gsrq ,d pSd cSad vkWQ cM+kSnk 'kk[kk yk;lZ dkyksuh vkxjk dk uEcjh 770280 eqcfyx 2150985-00 ¼bDdhl yk[k ipkl gtkj ukS lkS fipklh½ :i;k dk vius gLrk{kj lfgr tkjh fd;kA** 9. Recently, the Hon’ble Supreme Court in the case of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Ltd., AIR 2016 SC 4363 , held in paragraph 10 as under: “10. We have given due consideration to the submission advanced on behalf of the appellant as well as the observations of this Court in Indus Airways (supra) with reference to the explanation to Section 138 of the Act and the expression “for discharge of any debt or other liability” occurring in Section 138 of the Act. We are of the view that the question whether a post-dated cheque is for “discharge of debt or liability” depends on the nature of the transaction. If on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise.” 10. In the present matter, the Magistrate concerned while passing the impugned summoning order did not consider the essential requirements and simply on the ground that the cheque in question was issued by the applicant which was presented before the Bank within the validity period and was dishonoured on the ground of insufficiency of fund and also on the ground that legal requirements have been fulfilled passed the said order. The Court concerned did not consider as to whether the summoning order can be passed in absence of disclosure of mandatory requirements in the complaint regarding existing legally enforceable liability or debt. Hence, in my view, the impugned order is not sustainable. Since, the complainant has not disclosed any existing debt or liability for which the cheque in question was issued, the proceeding of the aforesaid complaint case, in view of the settled legal position, is abuse of the process of law and should not be permitted to continue. The concerned Magistrate did not apply judicial mind while passing the impugned order and passed an illegal order, which requires interference by this Court. Other submissions raised by the learned counsel for the applicant need no discussion as the basic/mandatory requirement to continue the criminal proceeding under Section 138 of the Act has not been fulfilled by the applicant. 11. In view of the above discussions, I am of the opinion that there is force in the submissions made by the learned counsel for the applicant. The application is liable to be allowed and the entire proceedings of the aforesaid complaint case as well as the impugned summoning order is liable to be quashed/set-aside. Accordingly, the application is allowed. The entire proceedings of the aforesaid complaint case No. 363 of 2009 under Section 138 Negotiable Instruments Act, P.S. Hari Parvat, District Agra pending before the Additional Chief Judicial Magistrate/Additional Civil Judge (SD), Court No. 5 as well as the order dated 9.10.2009 is quashed/set-aside.