M. Annadurai Manickam v. Swiss Singapore India Private Limited
2019-04-04
MADHUMATI MITRA
body2019
DigiLaw.ai
JUDGMENT : 1. Petitioner M. Annadurai Manickam has filed this application under Section 482 of the Code of Criminal Procedure for quashing of the proceeding being complaint case no.C-472 of 2017 under Section 138 of the Negotiable Instruments Act pending in the 5th Court of Learned Judicial Magistrate, Alipore, South 24-Parganas. 2. The present petitioner has also filed applications being CRR No.3487 of 2018 and CRR No.3488 of 2018 for quashing the complaint case no.C-64/2017 and complaint case No.C.473 of 2017 respectively pending before the Learned Judicial Magistrate, 5th Court, Alipore, South 24 Parganas. 3. Petitioner and the opposite party in all the above mentioned three cases are same and the facts as well as points for consideration in all the three case are same. Three complaint cases under Section 138 of the Negotiable Instrument Act have been filed by the opposite party/complainant for dishonour of seven cheques issued by the present petitioner. Learned Advocates appearing for the parties have submitted that three applications under Section 482 of the Code of Criminal Procedure to quash the proceedings of those three complaint cases have been filed on identical grounds. Contentions of the Learned Advocates for the parties to the above referred three cases are same and as such with the consent of Learned Advocates for the parties all the three cases have been taken up together for disposal. 4. The brief facts involved in the cases under reference may be narrated as under:- Present opposite party is a company incorporated under the Companies Act. The petitioner of the present CRR 3487 of 2018, 3488 of 2017 and 3489 of 2017 being the proprietor of Shree Balaji International approached the (opposite party/complainant) company through broker M/s. Bharathi Impex and requested for purchase of Black Matpe on advance payment condition for ready delivery (payment to be made and delivery to be lifted within 10 days of contract date). Thereafter as per the orders placed by the petitioner, complainant/opposite party sold said Black Matpe to the petitioner and the petitioner received all the Black Matpe sold to him by the complainant/opposite party but not pick up the said materials.
Thereafter as per the orders placed by the petitioner, complainant/opposite party sold said Black Matpe to the petitioner and the petitioner received all the Black Matpe sold to him by the complainant/opposite party but not pick up the said materials. As per the complaint, the present petitioner duly accepted the said fact vide communication that he was unable to perform his commitment and/or make payments for any cargo due to lack of demand in the market and fall in prices of Black Matpe and accepted to make due payment of price difference as washout of contract. Accordingly, in part discharge of the legal enforceable debt or liability out of the price of the Black Matpe sold and supplied to the petitioner by the complainant/opposite party issued seven A/C payee cheques in total duly signed by the accused person, all drawn on Axis Bank, Sankari Branch, Tamil Nadu in favour of the complainant/opposite party. All the cheques were presented for encashment within the validity period, but all the cheques were returned unpaid on different dates with the specific remark 'Insufficient Funds'. Opposite party/complainant served demand notice. 5. In spite of service of demand notice, the petitioner/accused did not make payment. Opposite party filed complaint cases against the petitioner. Learned Magistrate issued process against the petitioner/accused to face trial for commission of alleged offence punishable under Section 138/141 of the Negotiable Instrument Act. Learned Advocate appearing for the petitioner has vigorously argued that the proceedings pending before the Learned Magistrate should not be allowed to continue under the provisions of Negotiable Instruments Act as there is no legally enforceable debt, for which the cheques were issued. Learned Advocate has contended that the cheques in question were issued by the petitioner for supply of materials (Black Matpe) and said materials had never been supplied by the complainant company to the petitioner (accused). According to the submission made by the Learned Advocate for the petitioner that the petitioner/accused has no liability to pay as goods were not supplied to the petitioner and non-supply of goods does not create any legally enforceable liability to discharge.
According to the submission made by the Learned Advocate for the petitioner that the petitioner/accused has no liability to pay as goods were not supplied to the petitioner and non-supply of goods does not create any legally enforceable liability to discharge. It has been forcefully submitted by the Learned Advocate for the petitioner that mere holding of cheques by the complainant does not create any liability on the part of the petitioner/accused to pay the cheque amount particularly when the circumstances in which the cheques were issued had been expressly narrated in the reply and the question of non encashment of the security cheque does not create any offence under the Negotiable Instruments Act. Learned Counsel for the petitioner has placed strong reliance on the decision of Hon'ble Apex Court in Indus Airways (P) Ltd. & Others Vs. Magnum Aviation Private Limited and Another reported in (2014) 12 SCC 539 and submitted that the petitioner has approached for an order to quash three complaints pending before the Learned Magistrate by filing three separate applications under Section 482 of the Code of Criminal Procedure in respect of dishonour of seven cheques amounting to Rs.1,20,00,000/-. Learned Advocate for the petitioner has submitted that the complainant agreed to supply 1500 Metric Tons of 'Black Mapte' to the petitioner at a cost of Rs.1,20,00,000/- and agreed to supply the same within 10 days commencing from 04.10.2016 and the complainant failed to supply the same on 16.10.2016. The petitioner contacted Coimbatore Branch and the petitioner was told that the agreed amount of Rs.1,20,00,000/- required to be paid in advance for supply and accordingly sent the commission agent Inbaraj who had collected the seven cheques for the complainant. Learned Advocate for the petitioner has contended that the cheques in questions were issued as security and goods were never supplied to the petitioner and as such the dishonour of cheques does not come within the purview of Section 138 of the Negotiable Instruments Act. According to the contention of Learned Advocate for the petitioner that the factual situation of the present case is similar to that of the factual aspect of the case in Indus Airways Private Limited. He has continued to say that the existence of legal enforceable debt or other liability is an essential condition for constitution of an offence under Section 138 of the Negotiable Instrument Act.
He has continued to say that the existence of legal enforceable debt or other liability is an essential condition for constitution of an offence under Section 138 of the Negotiable Instrument Act. The cheques in questions were issued in advance for supply of goods and subsequently the goods were not supplied to the petitioner and petitioner has no obligation to make payment in respect of the cheques which were dishonoured. 6. He has further submitted that in the instant case, it cannot be said that cheques were issued in discharge of existing debt or liability. 7. Learned Advocate appearing for the opposite party/complainant has contended that in the instant case petitioner issued several cheques drawn on Axis Bank in the name of the complainant company as per the agreement between the parties regarding supply of Black Matpe and the complainant presented all the cheques for encashment within their validity period on different dates and the said cheques were returned unpaid with the endorsement 'Insufficient Fund'. Thereafter the complainant served legal notice and filed complaint as no payment was made in terms of the said notice. 8. Learned Advocate for the opposite party has submitted that decision cited by the Learned Advocate for the petitioner has no manner of application in the present case. Learned Advocate for the opposite party has further contended that the questions whether the cheques were issued in discharge of existing liability or issued as an advance payment for purchase of the goods or whether the goods were supplied to the petitioner all are disputed questions of facts and High Court in exercise of its power under Section 482 of the Code of Criminal Procedure cannot entertain disputed question of facts. 9. In support of his contention Learned Advocate for the opposite party/complainant has relied on the following decisions:- (1) Sampelly Satyanarayana Rao-Appellant Versus Indian Renewable Energy Development Agency Limited-Respondent reported in (2016) 10 SCC 458 , (2) M.M.T.C. Ltd. and Another-Appellants Versus Medchl Chemicals and Pharma (P) Ltd. And Another-Respondents reported in (2002)1 SCC 234 , (3) Bir Singh-Appellant Versus Mukesh Kumar-Respondent reported in 2019 SCC Online SC 138, (4) M/s DCS Limited and Others-Petitioners Versus State of West Bengal-Respondents reported in 2018(1) AICLR 573 (Cal). I have perused the materials placed on record and the decisions so cited at Bar. I have also considered the rival contentions of the respective parties. 10.
I have perused the materials placed on record and the decisions so cited at Bar. I have also considered the rival contentions of the respective parties. 10. In the instant case the factum of issuance of cheques by the petitioner has been admitted. It is also undisputed that all the seven cheques were dishonoured on presentation within validity period due to insufficient funds. 11. Plea as raised by the petitioner is that the cheques were issued as advance payment for supply of Black Matpe by the complainant company and goods were not supplied to the petitioner by the complainant and as such it cannot be said the petitioner had issued the cheque in discharge of the existing debt or other liability. Relaying on the decision in Indus Airways Private Limited and others, Learned Advocate for the petitioner has argued that the cheques were issued as advance payment for purchase of the goods and the goods were not supplied and such the principle as laid down in Indus Airways Private Limited and Others Versus Magnum Aviation Private Limited and Another reported in (2014) 12 SCC 539 is applicable to the facts and circumstances of the criminal proceedings pending before the Learned Magistrate. In view of the principle as laid down by the Hon'ble Apex Court all the criminal proceedings pending against the petitioner should be quashed. 12. In paragraph 3 of the complaint it has been mentioned that the complainant company sold Black Matpe to the petitioner/accused person and the accused although received all the Black Matpe sold to him by the complainant company but did not pick up the said materials. It is the specific claim of the petitioner/accused that the goods (Black Matpe) were not supplied to him. On the contrary, in the complaint it has been mentioned that the accused although received all the Black Matpe sold to him by the complainant company. Petitioner raised dispute regarding supply of the goods by the complainant. In this connection Learned Advocate for the opposite party/complainant has drawn the attention of the Court to the provisions of Section 139 of the Negotiable Instruments Act and submitted that the Court has to draw a presumption that the holder of the cheque received the cheque for discharge of a debt or liability until the contrary is proved.
In this connection Learned Advocate for the opposite party/complainant has drawn the attention of the Court to the provisions of Section 139 of the Negotiable Instruments Act and submitted that the Court has to draw a presumption that the holder of the cheque received the cheque for discharge of a debt or liability until the contrary is proved. Both the parties deserve the opportunity to prove their respective cases at the time of final hearing of the case by way of adducing evidence in support of their respective cases. While dealing with an application under Section 482 of the Code of Criminal Procedure the High Court should not usurp the jurisdiction of the trial Court and hold a parallel trial. High Court in exercise of its power under Section 482 of the Criminal Procedure is not expected to discharge the function of trial Judge. Moreover, it is not a stage to draw any conclusion regarding the claim and counter claim of the parties. If any conclusion is drawn at this stage then interest of either party may be prejudiced and case may be prejudged. It is well settled that while considering an application under Section 482 of the Code of Criminal Procedure for quashing any criminal proceedings, the Court has ordinarily to proceed on the basis of the averments made in the written complaint. In the present case admittedly cheques were issued by the petitioner in favour of the complainant company. In terms of Section 139 of the Negotiable Instruments Act there shall be necessary presumption of existing liability in favour of holder of the cheques. It is also well settled that the presumption is also rebuttable. Petitioner has taken the plea that the cheques were issued as advance payment and subsequently goods were not supplied. Petitioner has claimed that there is no question of existing liability in terms of Section 139 of the Negotiable Instrument Act. The plea or the question as raised by the petitioner is a mixed question of Law and facts and this question cannot be decided in an application under Section 482 of the Code of Criminal Procedure. Moreover, quashing of prosecution by the High Court by entertaining disputed question of fact is not proper particularly when the averments of the complaint made out a prima facie case for proceeding against the petitioner.
Moreover, quashing of prosecution by the High Court by entertaining disputed question of fact is not proper particularly when the averments of the complaint made out a prima facie case for proceeding against the petitioner. The Court while considering the prayer for quashing should not delving deep into the merit of the case or adjudicate upon a disputed question of fact. Moreover the petitioner is at liberty to place his plea by way of defence during trial The jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure Code is to be exercised sparingly only in rare cases. 13. Considering the materials placed on record as well as the principles as laid down by our Apex Court from time to time in various decisions I am of the view that it is not a fit case to exercise jurisdiction under Section 482 of the Code of Criminal Procedure. As such the application under Section 482 of the Code of Criminal Procedure is dismissed. 14. The other two CRR being nos.3487 of 2018 and 3488 of 2018 are also dismissed. 15. Let a copy of this order be kept in the record of CRR 3487 of 2018 and CRR 3488 of 2018 for future reference. Interim order, if any, in all the three CRR mentioned above stands vacated. 16. Urgent Photostat certified copy of this order, if applied for, shall be supplied expeditiously after complying with all necessary legal formalities.