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2020 DIGILAW 8 (JK)

Baljeet Singh v. Kulbir Singh

2020-01-14

DHIRAJ SINGH THAKUR, SANJEEV KUMAR

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JUDGMENT : 1. The present petition has been filed under Section 561-A Cr PC against the order dated 02.12.2016, whereby the Court of learned 3rd Additional Munsiff (JMIC) Jammu has taken cognizance on a complaint filed by the respondent/complainant under Section 138 of the Negotiable Instruments Act, 1881 (in short “the Act”) read with Section 420 of the RPC. Briefly stated, the material facts are as under:- 2. A complaint was filed by the complainant/respondent herein before the Court below, in which it was alleged that the cheque issued by the petitioner for an amount of Rs.24 lacs given on account of discharge of a liability, which the petitioner herein owed towards the complainant on account of their Stone Crushing business had bounced. 3. In the complaint, the complainant had asserted that the cheque was dated 05.07.2016 and was dishonoured by the Bank with the remarks “Payment stopped by drawer” and the same was returned to the petitioner with a memo dated 27.09.2016. It was next asserted in the complaint that a notice was served upon the petitioner, informing him of dishonouring of the cheque and that the complainant should ensure that the requisite amount would be arranged and that the cheque would be presented again. On that premise, the cheque was again presented, but the same was again returned with a memo dated 03.10.2016 with the endorsement “Payment stopped by the drawer.” 4. According to the complainant, another notice was issued through his counsel dated 25.10.2016, through registered A/D, requesting him for payment of the amount within fifteen days from the date of receipt thereof. The said notice is alleged to have been served upon the correct residential address of the accused, which was not received deliberately. It was in those circumstances that the complaint was filed before the Court of competent jurisdiction. 5. By virtue of order dated 02.12.2016, the learned 3rd Additional Munsiff (JMIC) Jammu took cognizance of the matter and issued summons for the appearance of the accused. Needless to say that the Court below recorded its satisfaction that there existed sufficient grounds for proceeding against the accused for the offence under Section 138 of the Act. It is against this order that the present petition has been filed. 6. Needless to say that the Court below recorded its satisfaction that there existed sufficient grounds for proceeding against the accused for the offence under Section 138 of the Act. It is against this order that the present petition has been filed. 6. With a view to question the order impugned, learned senior counsel for the petitioner laid a lot of stress on the fact that the entire complaint filed by the complainant/respondent herein was without any basis, as there was no debt, which was to be discharged by the petitioner towards the complainant herein, much less was the amount of Rs. 24 lacs payable to the complainant. Reliance was placed upon Retirement-cum-Partnership Deed executed on 4th day of March, 2016 between the partners, who were either retiring or who were being inducted into the partnership business of the Stone Crusher, being run in the name and style of M/s R. K. Stone Crusher, Sahar Khud Kathua. 7. It was urged that by virtue of the aforementioned deed, the complainant was one of the two retiring partners, who had specifically agreed that they were retiring as partners after settlement of their accounts in the joint business. Learned senior counsel tried to emphasize that once the retiring partner, i.e., the complainant had recorded his satisfaction regarding the settlement of accounts on 04.03.2016, there was no occasion for him to claim an amount of Rs. 24 lacs from the petitioner through a cheque dated 05.07.2016. 8. It was further urged that the petitioner had infact lost six (06) cheques, which were signed by him earlier, one of which was presented by one Jyoti Rani, one of the partners in the partnership deed. An FIR was also stated to have been registered by the said partner against the petitioner, which has since been stayed by a Coordinate Bench of this Court in proceedings under Section 561-A Cr PC. The petitioner also claimed to have registered an FIR in regard to the missing cheques with Police Station, Sujjanpur, Punjab. The outcome of the investigation however was not known. 9. The argument projected very emphatically by the learned senior counsel is that a complaint in terms of Section 138 of the Act is maintainable only in regard to a debt or other liability, which is legally enforceable. It was stated that the explanation to Section 138 of the Act was clear in that regard. 9. The argument projected very emphatically by the learned senior counsel is that a complaint in terms of Section 138 of the Act is maintainable only in regard to a debt or other liability, which is legally enforceable. It was stated that the explanation to Section 138 of the Act was clear in that regard. In that context, it was urged that the complaint was silent in its assertion that the debt or liability being claimed against the petitioner was a legally enforceable debt or liability, in the absence of which even otherwise the complaint could not be sustained, much less could an order be passed taking cognizance. 10. Reliance is placed upon 2014(12) SCC 539 (Paragraph Nos. 7, 8 & 9 as also AIR 2008 SC 1325 and 2009(1) SCC 156 (Paragraphs 15 & 16). Reliance was also placed upon the judgment passed by a Coordinate Bench of this Court in case titled “Anil Kumar Bhatia and ors Vs Abdul Salam Loan and others,” decided on 16.11.2018. 11. It was next contended that apart from the above, the Retirement-cum-Partnership Deed also contained an arbitration clause, which envisaged settlement of disputes through the mechanism of arbitration and was thus urged that in case there was any dispute, the same ought to have been settled through the said mechanism, which had been agreed upon between the parties. 12. In rebuttal, learned counsel for the respondent/complainant stated that the scope of Judicial review in petition under Section 561-A CrPC analogues to Section 482 of the CPC is limited. It was urged that the Court cannot go into the truthfulness and veracity of the allegations made in the complaint and that the order of cognizance has to be tested on the premise whether on the basis of averments made in the complaint, an offence was made out under the provisions of Section 138 of the Act. It was stated that what is sought to be urged by the learned counsel for the petitioner was a defence which could very easily be set up during the course of proceedings before the Court below. 13. It was stated that what is sought to be urged by the learned counsel for the petitioner was a defence which could very easily be set up during the course of proceedings before the Court below. 13. With a view to clear the air on the nature of his right against the petitioner, it was stated that the Retirement-cum-Partnership Deed executed on 4th day of March, 2016, relied upon by the learned counsel for the petitioner did infact record satisfaction with regard to settlement of accounts against the partnership only and not against the individual like the petitioner. It was urged that the averment in the complaint was clear that it was the complainant and the accused who used to run a Stone Crusher and that the petitioner owed a liability of Rs. 24 lacs towards the complainant on that account. 14. It was next contended that whether or not the petitioner owed any liability towards the respondent cannot be gone into this Court while exercising powers of Judicial Review under 561-A Cr PC, rather there is a presumption in terms of Section 139 of the Act, which clearly envisages that the holder of a cheque received the cheque in the nature referred to in Section 138 for the discharge in whole or in part or any debt or other liability. Reliance was placed upon the judgment of the Apex Court in “Sampelly Satyanarayana Rao Vs Indian Renewable Energy Development Agency Limited,” reported in 2016(10) SCC 458 . 15. Heard learned counsel for the parties. 16. The provisions of Section 138 of the Act are clear and unambiguous. Punishment is envisaged extendable to two years or with fine or both in a case where any cheque drawn by a person 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. Explanation appended to Section 138 of the Act envisages that for purposes of the said section, “debt or other liability” means a legally enforceable debt or other liability. 17. Explanation appended to Section 138 of the Act envisages that for purposes of the said section, “debt or other liability” means a legally enforceable debt or other liability. 17. Section 139 of the Act also is relevant and envisages a presumption, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole, or in part, of any debt or other liability. 18. Whether Section 139 of the Act raises a presumption to a limited extent that the holder of a cheque received the cheque for the discharge, in whole or in part, or any debt or other liability, or it also raises a presumption that the debt or other liability is a legally enforceable debt or liability of other liability is no longer res integra. 19. The Apex Court in “Rangappa Vs Sri Mohan” reported in 2010(6) SCC 493 held thus:- “In light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat may not be correct.” 20. The Court further proceed to hold that there is an initial presumption in favour of the complainant and that Section 139 of the Act was an example of a reverse onus clause that had been included with the legislative objective, including the credibility of negotiable instruments, and it hold thus:- “Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities’. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.” 21. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.” 21. On the issue whether the High Court could have interfered with the cognizance of the complaint under Section 138 of the Negotiable Instruments Act, the Apex Court in “Rallis India Ltd. Vs Poduru Vidya Bhusan & Ors.,” reported in 2011(13) SCC 88 , in paragraph Nos. 11 & 13 held as under:- “11. Thus, in the light of the aforesaid averments as found by us in the Criminal Complaint, we are of the considered opinion that sufficient averments have been made against the Respondents that they were the partners of the firm, at the relevant point of time and were looking after day to day affairs of the partnership firm. This averment has been specifically mentioned by the Appellant in the complaint even though denied by the Respondents but the burden of proof that at the relevant point of time they were not the partners, lies specifically on them. This onus is required to be discharged by them by leading evidence and unless it is so proved, in accordance with law, in our opinion, they cannot be discharged of their liability. Consequently, High Court committed an error in discharging them. Also, at the cost of repetition, by virtue of their own submissions before the High Court (reproduced in Para 6 above), the Respondents have admitted the fact that the Appellant had referred to them in their capacity as partners who were incharge of the affairs of the firm in the initial complaints. The question as to whether or not they were partners in the firm as on 31.03.2004, is one of fact, which has to be established in trial. The initial burden by way of averment in the complaint has been made by the Appellant. 13. At the threshold, the High Court should not have interfered with the cognizance of the complaints having been taken by the trial court. The High Court could not have discharged the respondents of the said liability at the threshold. The initial burden by way of averment in the complaint has been made by the Appellant. 13. At the threshold, the High Court should not have interfered with the cognizance of the complaints having been taken by the trial court. The High Court could not have discharged the respondents of the said liability at the threshold. Unless parties are given opportunity to lead evidence, it is not possible to come to definite conclusion as to what was the date when the earlier partnership was dissolved and since what date the Respondents ceased to be the partners of the firm.” 22. In “HMT Watches Ltd Vs M. A. Abida,” reported in (2015)11 SCC 776 , the Apex Court held thus:- 10. Having heard the learned counsel for the parties, we are of the view that the accused (Respondent 1) challenged the proceedings of criminal complaint cases before the High Court, taking factual defences. Whether the cheques were given as security or not, or whether there was outstanding liability or not is a question of fact which could have been determined only by the trial court after recording evidence of the parties. In our opinion, the High Court should not have expressed its view on the disputed questions of fact in a petition under Section 482 of the Code of Criminal Procedure, to come to a conclusion that the offence is not made out. The High Court has erred in law in going into the factual aspects of the matter which were not admitted between the parties. The High Court further erred in observing that Section 138(b) of the NI Act stood uncomplied with, even though Respondent 1 (accused) had admitted that he replied to the notice issued by the complainant. Also, the fact, as to whether the signatory of demand notice was authorised by the complainant company or not, could not have been examined by the High Court in its jurisdiction under Section 482 of the Code of Criminal Procedure when such plea was controverted by the complainant before it.” 23. In “Suryalakshmi Cotton Mills Ltd. Vs Rajvir Industries Ltd.,” reported in (2008) 13 SCC 678 , the Apex Court held thus:- “Ordinarily, a defence of an accused although appears to be plausible should not be taken into consideration for exercise of the said jurisdiction. In “Suryalakshmi Cotton Mills Ltd. Vs Rajvir Industries Ltd.,” reported in (2008) 13 SCC 678 , the Apex Court held thus:- “Ordinarily, a defence of an accused although appears to be plausible should not be taken into consideration for exercise of the said jurisdiction. Yet again, the High Court at that stage would not ordinarily enter into a disputed question of fact. It, however, does not mean that documents of unimpeachable character should not be taken into consideration at any cost for the purpose of finding out as to whether continuance of the criminal proceedings would amount to an abuse of process of court or that the complaint petition is filed for causing mere harassment to the accused. While we are not oblivious of the fact that although a large number of disputes should ordinarily be determined only by the civil courts, but criminal cases are filed only for achieving the ultimate goal, namely, to force the accused to pay the amount due to the complainant immediately. The courts on the one hand should not encourage such a practice; but, on the other, cannot also travel beyond its jurisdiction to interfere with the proceeding which is otherwise genuine. The courts cannot also lose sight of the fact that in certain matters, both civil proceedings and criminal proceedings would be maintainable.” 24. Considering the facts and circumstances of the present case on the touchstone of the ratio of the aforementioned judgments, it can be seen that the defence set up by the petitioner cannot be made the basis for quashing the proceedings pending before the Court of learned 3rd Additional Munsiff (JMIC) Jammu under Section 138 of the Negotiable Instruments Act read with Section 420 of RPC. 25. Reliance placed by the learned counsel for the petitioner on the Retirement-cum-Partnership Deed executed on 4th day of March, 2016, is only a fact, which may be required to be proved during the course of trial, whose evidentiary value would be evaluated then by the Court to see as to whether the petitioner had successfully rebutted the presumption, which Section 139 creates in favour of the complainant-respondent herein. It would be premature for this Court to quash the proceedings based only on the facts which have been highlighted in the petition and were urged by the learned counsel for the petitioner during the course of arguments and would even otherwise go contrary to the law laid down by the Apex court in the judgments discussed hereinabove. 26. Be that as it may, this petition is found to be without any merit and is, accordingly, dismissed along with connected IA. Sanjeev Kumar, J.—This Judgment is being pronounced by me in terms of Rule 138(3) of the Jammu and Kashmir High Court Rules, 1999.