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2023 DIGILAW 761 (GUJ)

Harikrushna Kalyanji Solanki v. State of Gujarat

2023-06-16

HASMUKH D.SUTHAR

body2023
ORAL JUDGMENT 1. By this application, under Section 482 of the code of Criminal Procedure, 1973 the applicant seeks to invoke the inherent powers of this Court, praying for quashing of the Criminal Case No.577 of 2009 pending before the learned Metropolitan Magistrate (Negotiable Instruments Act), Court No.34, Ahmedabad and all the proceedings arising thereto. 2. Learned advocate for the applicant has submitted that the present petition is filed under Section 138 of the Negotiable Instruments Act (for short, “the Act”), 1881 by respondent No.2 through her power of attorney holder. He further submits that there was no any transaction took place between the applicant and the respondent No.2. He also submits that the blank cheques issued to husband of respondent No.2 and the said cheques are misused for oblique motives even drawee bank viz. Gujarat Industrial Cooperative Bank Limited (for short, “the Cooperative Bank”) had already closed down its business and ceased to be member of Ahmedabad Bankers Clearing House with effect from 2008. He further submits that the cheques had neither been presented nor it went for clearing nor it had been dishonoured. 3. Learned advocate for the applicant, therefore, submits that no offence is made out and even entire transaction is of civil nature and present complaint is not maintainable. Hence, he has requested to quash and set aside the present complaint, as the applicant having good relations or friendship with husband of respondent No.2 and he is a practicing advocate. He further submits that the husband of respondent No.2 has misused the blank cheques by filling up all details without knowledge of the present applicant. 4. It is further submitted by the learned advocate for the applicant that the cheques were presented by the respondent No.2 in her bank on 30.07.20209, which was returned with an endorsement that Gujarat Industrial Cooperative Bank Ltd. was closed down and cheques were returned on 07.09.2009 and then a statutory notice was issued on 30.09.2009 and then a complaint has been filed, which is nothing but abuse of process of law. It is submitted that however the cheques were never presented in the bank. 5. Learned advocate for respondent No.2 has opposed the grant of present petition and submits that the applicant has suppressed the material fact. It is submitted that however the cheques were never presented in the bank. 5. Learned advocate for respondent No.2 has opposed the grant of present petition and submits that the applicant has suppressed the material fact. He further submits that the learned trial Court has rightly taken the cognizance of offence and trial is proceeded and the matter is filed in the year 2009. Further he submits that the evidence on affidavit is rendered by the complainant on 06.07.2013 and then filed an application under Section 91 of the Criminal Procedure Code for production of the documentary evidences on 20.09.2013. After cross-examination of prosecution witness No.2, the applicant has filed the present petition. Hence, he requested to dismiss the present petition as the present petition is filed suppressing the material fact and as trial is in progress. 6. I have given the thoughtful consideration and considering the arguments canvassed by the learned advocates for the respective parties. 7. At the outset, it is required to be noted that the complaint is filed by respondent No.2 before the Court of Metropolitan Magistrate, Ahmedabad on 17.09.2009 through her power of attorney holder. The cheque No.25671 dated 22.07.2009 was drawn by the present applicant on Gujarat Industrial Cooperative Bank Ltd. and the same was presented by the original complainant in the SBI Bank on 30.07.2009, but the return memo was not issued but wrote a letter to inquire in the Clearing House. Hence, once again the chque was presented on 11.08.2009 and then the cheque was returned on 07.09.2009 with an endorsement that the Bank is “closed down”. Hence, a statutory notice was issued on 01.10.2009 and the same was duly served on 05.10.2009 and then present complaint was filed on 17.11.2009, while the cheque in question was issued on 22.07.2009 i.e. after suspension of the Bank from the Clearing House. Even witness was examined by the complainant at Exhibit 21, Dilipbhai Shah also deposed before the Court that after 22.7.2009, no any cheque was received for the clearing by the Gujarat Industrial Cooperative Bank Ltd. after notification issued by RBI under Section 35(A) of the Banking Regulation Act, 1949. 8. In the backdrop of the aforesaid fact, it is admitted and undisputed fact that the cheque was drawn on the Bank and the said Gujarat Industrial Cooperative Bank Limited is closed down and cheque was returned on the same ground. 8. In the backdrop of the aforesaid fact, it is admitted and undisputed fact that the cheque was drawn on the Bank and the said Gujarat Industrial Cooperative Bank Limited is closed down and cheque was returned on the same ground. It is also an admitted fact that the cheque never went for clearing, as business of the “Bank” had already closed down and ceased to be member Ahmedabad Bankers Clearing House with effect from 20.09.2008. 9. It is worth to mention that for making an offence under Section 138 of the N.I. Act, it is mandatory that the cheque is required to be 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, 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, if the cheque is returned by "the bank" unpaid, either because of the amount of money standing to the credit of that account is insufficient fund to honour the cheque or that it exceeds the amount arranged to be paid from that account. Thus, presentation of cheque in the bank of drawer within validity period is mandatory. Even as per the Section 72 of the N.I. Act, the presentation of cheque is mandatory which reads as under: “...a cheque must, in order to charge the drawer, be presented at the bank upon which it is drawn before the relation between the drawer and his banker has been altered to the prejudice of the drawer. A bare perusal of Section 72 of the N.I. Act also shows that the cheque shall be presented at the bank upon which it is drawn. 10. A cheque involves three parties (i) the drawer, who writes the cheque; (ii) the payee to whom order the cheque made out; (iii) Drawee the bank of drawer, who maintains account of drawer and from account pays amount of cheque. 11. Herein, the Gujarat Industrial Cooperative Bank Ltd. is drawee bank is now referred as “Bank”. The accused herein petitioner has drawn cheque in favour of the complainant. 11. Herein, the Gujarat Industrial Cooperative Bank Ltd. is drawee bank is now referred as “Bank”. The accused herein petitioner has drawn cheque in favour of the complainant. Thus, drawee has to pay the amount/money that is written on a cheque by the account holder/drawer of cheque subject to funds available in account, verification of signature, validity of instrument or considering instruction of account holder/drawer if any otherwise. 12. The payee has to present the cheque within its validity period for honour the instrument in this bank, which is called as collecting bank. Herein, collecting bank is State Bank of India i.e. Bank of complainant. The important function of collecting bank is together cheques/instruments and send it to clearing house and credit the amount of cheque in the account of cheuqe holder. If cheque is honoured or otherwise if it dishonoured, then issue return memo statutory reasons for dishonour the instrument and return original instrument/cheque along with return memo to the payee/account holder of collecting bank. Thus, considering the role of collecting bank in case of wrongful transaction or faulty transaction if any or act in good faith, protection is provided to the collecting bank that collects the money from the account of drawer of cheque on behalf of payee or a person who has deposited cheque into the bank under section 131 of the N.I. Act. However, collecting bank has to be taken due care and attentiveness in collection of cheque. Herein, cheque is presented by complainant on 30.07.2009 and 11.08.2009 to its bank i.e. State Bank of India, admittedly after the Gujarat Industrial Bank Ltd. was ousted from the Clearing House, its business was closed down on 22.09.2009. Hence, the drawee Bank ceased as member of Clearing House. Hence, question does not arise for the collecting bank, herein SBI to accept the cheque/instrument as same was not valid or accessible for the payment after 22.09.2009. Hence, the drawee Bank ceased as member of Clearing House. Hence, question does not arise for the collecting bank, herein SBI to accept the cheque/instrument as same was not valid or accessible for the payment after 22.09.2009. The collecting bank is an agent for collection, being an agent for collection, it was a duty of the collecting bank, if the banker is not a member of ‘Clearing House’, then in absence of any substitute or agent or another banker, who is associate with Clearing House for the reason assembling cheques on behalf of the Gujarat Industrial Cooperative Bank Ltd., who having an implied or express authority, but in the case in hand, no any such substituted agent of Gujarat Industrial Cooperative Bank Ltd. has returned the instrument. A cheque has never gone to Clearing House through collecting bank, since the drawee the Gujarat Industrial Cooperative Bank Ltd. cease a member of Clearing House and its business is closed down, hence, question of dishonour of cheque does not arise and in a present case, no case is made out to attract the provision of Section 138 of the N.I. Act. In view of the above, it appears that the complaint does not reveal any of the ingredients of the alleged offence under Section 138 of the N.I. Act. Such litigation required to put an end and hence, I have no hesitation to hold that permitting continuance of criminal proceedings against applicants-accused would result in abuse of process of Court. 13. As discussed above in the present case, the cheque is not presented to the drawee bank as membership of the Bank is suspended from the Clearing House and as the cheque has neither been presented nor it has been gone for clearing at any point of time and it has not been dishonoured by the Gujarat Industrial Cooperative Bank Ltd., and therefore, offence under Section 138 of the Act itself is not made out. In this regard reference is also required to be made in the case of Shri Ishar Alloys Steels Ltd. versus Jayaswals NECO Ltd., reported in 2001 Cri. L.J. 1250 (SC), wherein the Hon’ble Apex Court has been pleased to explain: “(i) What is meant by, "the bank" as mentioned in Clause (a) of the proviso to Section 138 of the Act? L.J. 1250 (SC), wherein the Hon’ble Apex Court has been pleased to explain: “(i) What is meant by, "the bank" as mentioned in Clause (a) of the proviso to Section 138 of the Act? (ii) Does such bank mean the bank of the drawer of the cheque or covers within its ambit any bank including the collecting bank of the Payee of the cheque? (iii) To which bank the cheque is to be presented for the purposes of attracting the penal provisions of Section 138 of the Act?” The above all points are answered by the Hon’ble Apex Court in para 8 and 9 as under: “8. The use of the words "a bank" and "the bank" in the Section is indicator of the intention of the Legislature. The former is indirect article and the latter is pre-fixed by direct article. If the Legislature intended to have the same meanings for "a bank" and "the bank", there was no cause or occasion for mentioning it distinctly and differently by using two different articles. It is worth noticing that the word "banker" in Section 3 the Act is pre-fixed by the indefinite article "a" and the word "bank" where the cheque is intended to be presented under Section 138 is pre-fixed by the definite article "the". The same Section permits a person to issue a cheuqe on an account maintained by him with "a bank" and makes him liable for criminal prosecution if it is returned by "the bank" unpaid. The payment of the cheque is contemplated by "the bank" meaning thereby where the person issuing the cheque has an account. "The" is the word used before nouns, with a specifying of particularising effect opposed to the indefinite or generalising force of "a" or "an". It determines what particular thing is meant; that is, what particular thing we are to assume to be meant. "The" is always mentioned to denote particular thing or a person. "The" would, therefore, refer implicitly to a specified bank and not any bank. "The bank" referred to in clause (a) to the proviso to Section 138 of the Act would mean the drawee-bank on which the cheque is drawn and not all banks where the cheque is presented for collection including the bank of the payee, in whose favour the cheque is issued. 9. "The bank" referred to in clause (a) to the proviso to Section 138 of the Act would mean the drawee-bank on which the cheque is drawn and not all banks where the cheque is presented for collection including the bank of the payee, in whose favour the cheque is issued. 9. It, however, does not mean that the cheque is always to be presented to the drawer's bank on which the cheque is issued. The payee of the cheque has the option to present the cheque in any bank including the collecting bank where he has his account but to attract the criminal liability of the drawer of the cheque such collecting bank is obliged to present the cheque in the drawee or payee bank on which the cheque is drawn within the period of six months from the date on which it is shown to have been issued. In other words a cheque issued by (A) in favour of (B) drawn in a bank named (C) where the drawer has an account can be presented by the payee to the bank upon which it is drawn i.e. (C) bank within a period of six months or present it to any other bank for collection of the cheque amount provided such other bank including the collecting bank presents the cheque for collection to the (C) bank. The non presentation of the cheque to the drawee-bank within the period specified in the Section would absolve the person issuing the cheque of his criminal liability under Section 138 of the Act, who shall otherwise may be liable to pay the cheque amount to the payee in a civil action initiated under the law. A combined reading of Sections 2, 72 and 138 of the Act would leave no doubt in our mind that the law mandates the cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable. A combined reading of Sections 2, 72 and 138 of the Act would leave no doubt in our mind that the law mandates the cheque to be presented at the bank on which it is drawn if the drawer is to be held criminally liable. Such presentation is necessarily to be made within six months at the bank on which the cheque is drawn, whether presented personally or through another bank, namely, the collecting bank of the payee.” In view of the above, it is an admitted fact that the cheque in question was never presented in the drawee bank for clearing, and therefore, it is crystal clear that the complaint under Section 138 of the Act is not maintainable. 14. Learned advocate for the original complainant has also submitted that the present petition is filed by suppressing the material fact. I have given thoughtful consideration qua arguments canvassed by the learned advocate for the original complainant. It is true that the second witness is examined on 20.02.2014 in the case and present petition is filed on 11.09.2013 and then this Court has been pleased to grant interim relief in favour of the present applicant and further proceedings of Criminal Case No.577 of 2009 is stayed by this Court on 19.03.2014. Hence, argument of suppressing of material fact is not sustainable. 15. Further It is necessary to consider whether the power conferred by the High Court under section 482 of the Code of Criminal Procedure is warranted. It is true that the powers under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. The Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard-and-fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage as the Hon’ble Supreme Court has decided in the case of Central Bureau of Investigation vs. Ravi Shankar Srivastava, IAS & Anr., reported in AIR 2006 SC 2872 . 16. In the result, this application is allowed. Criminal Case No.577 of 2009 pending before the learned Metropolitan Magistrate (Negotiable Instruments Act), Court No.34, Ahmedabad is quashed and set aside qua the present applicant. All further consequential proceedings pursuant thereto shall also stand terminated. Rule is made absolute.