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2022 DIGILAW 164 (PNJ)

Anuj Khanna v. K. V. Footwear

2022-01-21

ANIL KSHETARPAL

body2022
JUDGMENT Anil Kshetarpal, J. - Through this petition, filed under Section 482 of the Code of Criminal Procedure, 1973, the petitioners seek the quashing of the complaint bearing No.807 of 2020, dated 12.11.2020, presently pending before the Judicial Magistrate Ist Class, Bahadurgarh, District Jhajjar, as well as the order dated 09.02.2021, whereby the petitioners have been summoned to face the trial for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. 2. At the outset, it is important to note that the petitioners have not challenged the correctness of the order summoning them under the revisional jurisdiction of the Court. On a court question, the learned counsel admits that a revision petition is maintainable, however, he submits that he wishes to rely upon certain documents which cannot be relied upon in the revision petition. The learned counsel representing the petitioners was apprised of the limited jurisdiction, however, he insists for a decision on merits. 3. This Bench has heard the learned counsel for the petitioners at length and with his able assistance perused the paper book. 4. The learned counsel representing the petitioners has submitted the following four points for consideration:- (1) When the complaint under Section 138 of the Negotiable Instruments Act, 1881 was filed, the order passed by the National Company Law Tribunal, Mumbai, initiating Corporate Insolvency Resolution Process (CIRP) was in operation and therefore, in terms of Section 14 of the Insolvency and Bankruptcy Code, 2016, the proceedings could not be initiated. (2) When the cheque is alleged to have been issued, the petitioners no.1 to 3 were no more Directors as resolution professional was appointed on 13.02.2020, whereas the cheque is dated 15.09.2020. Hence, he contends that the petitioners cannot be made liable. (3) That the complainant was in knowledge of the Corporate Insolvency Resolution Process but failed to disclose these facts to the Court and therefore, the complaint is result of concealment of material facts. (4) Since, no proceedings could be initiated against Corporate Debtor, therefore, consequent proceedings against petitioner no.1 to 3 also could not be initiated and therefore, the complaint is liable to be quashed. 5. (4) Since, no proceedings could be initiated against Corporate Debtor, therefore, consequent proceedings against petitioner no.1 to 3 also could not be initiated and therefore, the complaint is liable to be quashed. 5. On dishonor of the cheque dated 15.09.2020, the respondent issued notice dated 06.10.2020, calling upon the petitioners to pay the defaulted amount of Rs.20,00,000/-, and on failure to do so, filed a complaint under Section 138/141 of the Negotiable Instruments Act, 1881, in the Court of Judicial Magistrate. The Court, after appreciating the facts, has summoned the petitioners. It has been alleged that the petitioners have been directed to appear before the Court on 13.01.2022 while issuing fresh notice on 23.09.2021. 6. The petitioners have alleged that a mutual settlement was signed between the parties on 24.08.2019 and consequently 11 undated cheques were handed over to the respondent in order to discharge the liability of Rs.2,20,00,000/-. The petitioners allege that Cheque No.000869, dated 15.09.2020, is a part of the aforesaid settlement which has been presented in infringement of the agreement between the parties. They allege that on 15.09.2020, the management of petitioner no.4 was handed over to Resolution Processsfional appointed by the National Company Law Tribunal and therefore, petitioner no.1 to 3 are not liable to be prosecuted. 7. Now, the court proceeds to analyse the arguments of the learned counsel. 8. As noticed above, the petitioners are yet to enter appearance before the trial court. They pray that the complaint as well as the order summoning the petitioners should be quashed by the High Court in exercise of powers under Section 482 Cr.P.C. As far as the facts are concerned, the petitioners are yet to put in appearance and prove the facts with regard to the settlement between the parties on 24.08.2019, consequentially, the fact of handing over of 11 undated cheques is yet to be proved. The parameters for quashing of a criminal complaint at the threshold, are well settled. If the court , on reading the criminal complaint, observes that no case is made out against the alleged accused or it is an abuse of the process of the Court or for any other similar reason deems its necessary, then the complaint can be quashed. The parameters for quashing of a criminal complaint at the threshold, are well settled. If the court , on reading the criminal complaint, observes that no case is made out against the alleged accused or it is an abuse of the process of the Court or for any other similar reason deems its necessary, then the complaint can be quashed. At the initial stage, the High Court cannot be expected to decide the controversy between the parties on the basis of the facts which are required to be asserted and proved by the accused in his defence. 9. Further, it is not in dispute that the Corporate Insolvency Resolution Process initiated by the National Company Law Tribunal has already been set aside by the National Company Law Appellate Tribunal vide order dated 25.11.2020. Consequently, the mandate in favour of the resolution professional has come to an end. The company is no longer enjoying the protection of moratorium period under Section 14 of the Insolvency and Bankruptcy Code, 2016. Furthermore, a Larger Bench of the Supreme Court in P. Mohanraj vs. M/s Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258 , has held that the proceedings against the Directors (individual) can continue irrespective of the fact that due to moratorium, the proceedings against the Corporate Debtor cannot continue. However, in the present case, as already noticed, the protective umbrella has come to an end as a result of the order dated 25.11.2020, passed by the National Company Law Appellate Tribunal. Hence, even the aforesaid plea with respect to petitioner no.4 is no longer maintainable. 10. The argument of the learned counsel that petitioner no.1 to 3 were not Directors of the company when the cheque is alleged to have been issued, is also required to be examined by the Magistrate before whom the complaint is pending. This Bench does not find it appropriate to express any opinion on the merits/demerits of the case. 11. As regards the allegation of concealment of facts and the effect of appointment of Resolution Professional by the National Company Law Tribunal dated 13.02.2020, the same can be examined by the Trial Court which would have the competency/jurisdiction of examining all the material which is produced before it, for its perusal. 11. As regards the allegation of concealment of facts and the effect of appointment of Resolution Professional by the National Company Law Tribunal dated 13.02.2020, the same can be examined by the Trial Court which would have the competency/jurisdiction of examining all the material which is produced before it, for its perusal. At this stage, it is not considered appropriate to make any observation with regard to the question of maintainability of the complaint or the effect of alleged concealment or other objections taken in the present petition. 12. The scope of quashing the criminal proceedings, in the exercise of powers under Section 482 Cr.P.C. has been examined by the Supreme Court in State of Hryana and others vs. Ch. Bhajan Lal and others, 1992 Supplement (1) SCC 335. 12. The scope of quashing the criminal proceedings, in the exercise of powers under Section 482 Cr.P.C. has been examined by the Supreme Court in State of Hryana and others vs. Ch. Bhajan Lal and others, 1992 Supplement (1) SCC 335. The Supreme Court after discussing the relevant case laws has culled out the principles of law relating to the exercise of the extra-ordinary power of the High Court under Article 226 or the inherent powers under Section 482 Cr.P.C., in para 102, which are extracted as under:- In the exercise of the extra-ordinary power under Article 226 or the inherent powers under Section 482 of the Code of Criminal Procedure, the following categories of cases are given 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 guide-17 myriad kinds of cases wherein such power should be exercised: (a) 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; (b) where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investi- gation 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; (c) 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; (d) 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; (e) 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; (f) 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 institu- tion 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; (g) 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. [305D-H; 306A-E] 8.2. In the instant case, the allegations made in the complaint, do clearly constitute a cognizable offence justi- i7 on and this case does not call for the exercise of extraordinary or inherent powers of the High Court to quash the F.I.R. itself. [307B] State of West Bengal v. S.N. Basak, [1963] 2 SCR 52; distinguished. 13. It is evident that the petitioners have failed to bring their case within the parameters expounded by the Supreme Court or any other similar ground which may enble the High Court to exercise its extra-ordinary inherent jurisdiction. 14. Keeping in view the aforesaid facts, the petition is disposed of by relegating the petitioners to the remedy of either filing a revision petition or defending the complaint on merits, in accordance with law.