Research › Search › Judgment

Orissa High Court · body

2020 DIGILAW 111 (ORI)

Chandrasekhar K. Vaid v. Sanjay Ku. Gupta

2020-05-15

S.PUJAHARI

body2020
ORDER : S. Pujahari, J. 1. This is an application under Section 482 of Cr.P.C. seeking for quashment of the order dated 30.06.2007 passed by the learned S.D.J.M., Bhubaneswarin I.C.C. No. 1833 of 2007 taking cognizance of the offences under Sections 193 and 420 of I.P.C. against the petitioners and issuing summons to them for being proceeded against 2. I have heard the respective learned counsels for both the sides and perused the impugned order vis-a-vis the materials placed. M/s. Gold Mohur Foods and Feeds Ltd. (GFFL) is a manufacturer of animal feed products and the petitioners are said to be responsible for conduct of the business of the said company. The opposite party is the Proprietor of a Firm, namely, M/s. Pelican Enterprises, and there is no dispute that the opposite party in his such capacity and on the basis of an agreement dated 12.08.2000 was appointed as the Distributor of the products of GFFL. There is also no dispute that as per the terms of the said agreement the opposite party issued three undated blank cheques drawn on State Bank of India, Kapilaprasad Branch which were kept with the GFFL towards security vide the letter dated 30.03.2002 issued by the opposite party. According to the opposite party, for the reason of availing Bank Guarantee facility from Bank of India, he closed his account with State Bank of India on 05.06.2002 and before then he had asked the petitioners' company to return the aforesaid three cheques, by writing a letter dated 03.05.2002 followed by reminders. The cheques were not returned by GFFL, for which the opposite party filed Civil Suit bearing No. 420 of 2006 before the Civil Judge (Junior Division), Bhubaneswar seeking for a permanent injunction against the petitioners' company, not to invoke the Bank Guarantee and also not to utilize or encash the aforesaid three cheques, pending final verification and reconciliation of business accounts between the parties. In the said suit, an interim order was passed on 03.01.2007 directing both the parties to maintain status-quo in respect of the subject-matter of the suit. As it further appears, one of the aforesaid cheques was presented by the petitioner No. 3 with Bank on 22.12.2006 for encashment of Rs. In the said suit, an interim order was passed on 03.01.2007 directing both the parties to maintain status-quo in respect of the subject-matter of the suit. As it further appears, one of the aforesaid cheques was presented by the petitioner No. 3 with Bank on 22.12.2006 for encashment of Rs. 29,43,157/- and the same having been dishonoured by the Bank with the remark "Accounts closed", the "petitioner No. 3 initiated action under Section 138 of the N.I. Act alleging that the petitioners indulged in unfair business practice and cheated him by dishonestly presenting the cheque with the Bank with fabrication of false evidence, the opposite party filed a complaint registered as I.C.C. No. 1833 of 2007 before the learned S.D.J.M., Bhubaneswar who vide the impugned order dated 03.06.2007 has taken cognizance of offences under Sections 193 and 420 of IPC against the petitioner accused persons with a direction for issuance of summons to them. Hence, the present application by the accused-petitioners. 3. The impugned order is sought to be quashed on the grounds, inter-alia, that no specific overt act has been attributed to the individual accused persons, and that the allegations in the complaint, even if they are accepted to be true at their face value, do not make out any offence inasmuch as if at all there remains any dispute between the parties regarding verification or conciliation of business accounts, the same can be adjudicated in the civil suit that has already been instituted by the complainant and in so far as the presentation of the cheque by the petitioner No. 3 with the Bank is concerned, the process in that regard under Section 138 of the N.I. Act had already started before the order of status-quo was passed by the Civil Court. In course of hearing, the learned counsel for the petitioners further contended that the impugned order is not sustainable in law inasmuch as there has not been any inquiry under Section 202 of Cr.P.C., and that the impugned order in so far as the same relates to taking cognizance under Section 193 of IPC is beyond the jurisdiction of the learned S.D.J.M. in view of the bar under Section 195 of Cr.P.C. 4. On the other hand, the learned counsel appearing for the complainant-opposite party submitted that pendency of a civil litigation or existence of cause of action for a civil suit is no bar for launching a criminal prosecution when the very same acts constitute criminal offences attracting penal liability. According to him, since the petitioners having not informed the opposite party about his liability, if any, under the agreement and they having misutilized the cheque without taking steps for reconciliation of the accounts, the offences have been prima-facie made out against them. He would further submit that at this stage of the complaint proceeding, no roving inquiry into the allegations is called for, and hence the impugned order should not be interfered with by this Court. 5. At the time of taking cognizance at the threshold of a criminal proceeding, it is not required to resort to any threadbare analysis of the materials or any roving inquiry into the allegations. But, the Magistrate must apply his judicial mind to the materials produced so as to find out as to whether or not there is a prima-facie case to proceed against the person(s) arraigned as an accused for the alleged offences. In the case at hand, it is the own version of the complainant that there subsisted a dispute between him and the company of the petitioners regarding the accounts of the business transaction. Needless to mention that in the civil suit which is subjudice, the said question is supposed to be decided upon evidence. As regards the cheques in question, admittedly the opposite party has deposited the same with the petitioners' company for the purpose of security, in terms of the agreement entered, into. Although he has taken a plea with reference to the letter dated 30.03.2002 that there was an understanding that those bank cheques were not to be tendered for encashment without prior intimation to him, the said letter which is available in the lower Court case record does not contain any such condition or stipulation. In that view of the matter, the entitlement or liability of the parties arising out of those cheques or of the steps taken by the petitioners for encashment of the same, is a question of fact and law to be dealt with by the Court in seisin over the case under the Negotiable Instruments Act. In that view of the matter, the entitlement or liability of the parties arising out of those cheques or of the steps taken by the petitioners for encashment of the same, is a question of fact and law to be dealt with by the Court in seisin over the case under the Negotiable Instruments Act. The allegations brought vide the complaint, therefore, even if they are accepted in entirety at their face value, do not constitute the offence of cheating or any fraudulent act. 6. In so far as the offence under Section 193 of IPC is concerned, in view of Section 195 of Cr.P.C., cognizance of any such offence cannot be taken unless there is a written complaint by the concerned Court or some other Courts to which that Court is subordinate. Here, there being no such complaint to meet the requirement under Section 195 of Cr.P.C., the order of cognizance under Section 193 of IPC is a non est in the eye of law. 7. As per the amendment inserted to Section 202 of Cr.P.C. by the Act No. 25 of 2005 with effect from 23.06.2006, in a case where the accused is residing at a place beyond the local jurisdiction of the Magistrate, it becomes obligatory for the Magistrate to conduct an inquiry by himself or direct an investigation to be made by a Police Officers (sic) to other conditions vide the proviso to sub-section (1) of Section 20 (sic) Cr.P.C. In the case at hand, although the accused-petitioner Nos. 1 to 4 are admittedly residing and working outside the State, no inquiry or investigation under Section 202 of Cr.P.C. has been conducted. What it appears, although the learned S.D. J.M., Bhubaneswar after recording the initial statement of the complainant under Section 200 of Cr.P.C. directing an inquiry to be conducted, the complainant declined to examine any witness or produce any material for the purpose of such an inquiry. Needless to mention that when the Magistrate fixes the case for the purpose of inquiry under Section 202 of Cr.P.C., it is deemed that the materials placed before him are not sufficient for proceeding against the accused, and for that reason, an inquiry under Section 202 of Cr.P.C. was necessitated by him. Needless to mention that when the Magistrate fixes the case for the purpose of inquiry under Section 202 of Cr.P.C., it is deemed that the materials placed before him are not sufficient for proceeding against the accused, and for that reason, an inquiry under Section 202 of Cr.P.C. was necessitated by him. No such inquiry having been conducted in this case and no reason having been cited by the learned S.D. J.M., Bhubaneswar for not giving effect to his own order which directed for an inquiry, the impugned order of cognizance suffers from procedural irregularity, and speaks of non application of judicial mind by the learned S.D.J.M., Bhubaneswar. 8. For the discussions made hereinbefore, in the result, this CRLMC is allowed with quashment of the impugned order of cognizance and the consequential proceedings in I.C.C. No. 1833 of 2007 on the file of the learned S.D.J.M., Bhubaneswar. L.C.R. along with a copy of this order be returned back forthwith.