HONOURABLE SRI JUSTICE S.RAVI KUMAR CRIMINAL PETITION No.8578 OF 2012 Dated 8-10-2014 Between:
M/s.Civitech Construction Pvt., Ltd., represented by its Managing Director Sri D.N.Singh, Kancharikunj, Sakat Nagar, Sasaram, Bihar and others.
..Petitioners.
And:
State of Andhra Pradesh, represented by Public Prosecutor, High Court of A.P., Hyderabad and another.
..Respondents.
HONOURABLE SRI JUSTICE S.RAVI KUMAR CRIMINAL PETITION No.8578 OF 2012 ORDER:
This petition is filed to quash C.C.No.244 of 2012 on the file of XIX Special Magistrate at Hyderabad, for alleged offence under Section 138 of Negotiable Instruments Act.
Petitioners herein are A.1 to A.5 in the above referred C.C.No.244 of 2012.
Originally, this complaint is filed before III Additional Chief Metropolitan Magistrate, Criminal Courts at Nampally, Hyderabad and same is numbered as C.C.No.933 of 2011 and the same is subsequently transferred to Court of XIX Special Magistrate, Hyderabad, wherein it is re-numbered as C.C.No.244 of 2012.
Second respondent herein filed complaint against petitioners alleging that A.1 is a company and A.2 to A.5 are Directors of it who are involved in day-to- day activities of A.1 company. According to complaint allegations, complainant is also a company and it was awarded work of “Development of State Highways in the State of Bihar under Rashtriya Sam Vikas Yojna and first accused approached the complainant company with a request to appoint them as sub- contractor for completion of the said work on behalf of complainant and considering the request, they entered into an agreement on 21-4-2007. According to complainant, on 19-4-2008, an operational agreement was executed between the parties, on which date, it was agreed that complainant and accused company to adjust the amount already incurred by complainant towards bank guarantee of Rs.5,39,68,547/- and Rs.11,52,99,244/-. It is also agreed that since complainant incurred a sum of Rs.8,21,88,528/- as repayment on receipt of mobilization funds, the accused issued un-dated cheques for an amount of Rs.8,00,00,000/- drawn on Canara Bank in lieu of advance already availed and also for the amounts yet to be realized by the complainant. As per the statement of account, accused company has to pay a sum of Rs.61,78,75, 281/- to the complainant company and when there was a demand for repayment of the said amount and as per the mutually agreed terms on the request of accused company, the complainant has to deposit one cheque every month for realization of outstanding dues and accordingly cheque bearing No.164759 for One crore dated 7-3-2011 drawn on Canara Bank, Sasaram was presented by complainant in its Bank State Bank of India, Banjara Hills, but the same was returned with endorsement “account blocked’ and on that, a legal notice dated 4-4-2011 was issued demanding cheque amount but the accused issued a reply with untenable ground and failed to pay back the cheque amount and thereby, committed offence under Section 138 of Negotiable Instruments Act.
Challenging the said complaint, petitioners filed this quash petition on several grounds and mainly, the grounds urged at the time of arguments are that the account of first accused was blocked as per the orders of the Income Tax Department and for that, the accused is not responsible and therefore, the ingredients of Section 138 of Negotiable Instruments Act are not at all attracted. The other important ground raised on behalf of petitioners is that A.3 is not a Director of A.1 company and she is unnecessarily implicated. The third ground urged is that the first accused company issued eight cheques on the date of execution of agreement as security with the specific understanding that the cheques will not be presented in bank and therefore, the criminal liability under Section 138 of Negotiable Instruments Act is not at all attracted.
Heard both sides.
Advocate for petitioners mainly focused his argument on the above three points which he has elaborated them with reference to documents relied on by the petitioners which are filed along with quash petition.
On the other hand, learned counsel for second respondent submitted that the objections raised with regard to understanding not to present the cheques cannot be accepted because in complainant’s notice, a specific pleading is made that subsequent to agreement, there was a mutual understanding between the parties, in which first accused specifically agreed that the complainant has to present one cheque every month towards realization of the outstanding due to the complainant and this aspect is a matter of evidence and it cannot be decided in a quash petition. It is further submitted with regard to blocking the account by the Income Tax Department, that also is a matter of evidence because, there is no material to show that the Bank could not honour the cheque though there are sufficient funds in the account only because of the order from Income Tax Department and that aspect cannot be decided in a quash petition. He further submitted that cheque was dated 7-3-2011 and it was dishonoured by the Bank on 10-3-2011 and it appears that the order of blocking account was also on the same day i.e., 10-3- 2011 and whether there was dishonest intention on the part of petitioners is a matter to be decided only during trial and it cannot be decided in a quash petition. He further submitted that so far as A.3 is concerned, she is not a Director and therefore, the proceedings against her can be quashed.
Now the point that would arise for my consideration in this Criminal Petition is whether the proceedings in C.C.No.244 of 2012 on the file of XIX Special Magistrate at Hyderabad, for the alleged offence under Section 138 of Negotiable Instruments Act can be quashed or not?
POINT:
There is no dispute with regard to the issue of cheque by the first accused company in favour of second respondent-complainant. But the contention of the accused is that this cheque and other cheques were issued as security only with specific understanding not to present them in the bank, therefore, the ingredients of Section 138 of Negotiable Instruments Act are not attracted.
As seen from the material on record, though as per the letter dated 11-5-2008, this chqeue and seven other cheques were given as token of security but from the complaint allegations, complainant contended that there was a mutual understanding between the parties subsequent to this letter in the year 2010 wherein first petitioner agreed that the complainant can present cheque for rupees one crore every month towards realization of outstanding balance and whether such mutual understanding was there or not is a matter of evidence and it cannot be decided in a quash petition. So, the objection that the cheques were issued for security purpose cannot be decided at this stage, it is for the trial court to decide it after recording evidence of both parties while appreciating the same.
The other objection of the petitioners is that for dishonour of the cheque, there is no fault on the part of first accused and the bank did not honour the cheque because of orders from Income Tax Department. To support his argument, he placed reliance on Delhi High Court in VIJAY CHOUDHRY VS.GYAN CHAND JAIN (CRIMINAL M.C.No.1328 of 2007) wherein the Delhi High Court held “for an account to be maintained by an account holder, it is essential that he is in a position to operate the said account by either depositing monies therein or by withdrawing money therefrom. He should be in a position to give effective instructions to his banker with whom the account is maintained.”
In that case, cheque issued by a party concerned was dishonoured due to attachment orders from the court. In those circumstances, the Delhi High Court observed “Whatever the reason for dishonour of cheques, it had to be co-related to the insufficient funds in account or lack of arrangement made by drawer which is to be an agreement.”
So, as rightly pointed out by advocate for second respondent, whether there was sufficient money or not in the bank, as on the date Income Tax Department blocked the account, is a matter of evidence, because in the certificate issued by the Bank, which is filed by the petitioners, it is mentioned that first accused is having a current account with their bank and the said account has been blocked as per the instruments received from the Income Tax Office Circle 3, Gaya on 10-3-2011. Except that, nothing is mentioned in it saying that because of that order, the cheque is not honoured though there is sufficient money in the account. So, this decision is no way helpful to the petitioners at this stage.
Learned counsel for petitioners also relied on a decision of Karnataka High Court in NAGARAJA UPADHYA VS. M.SANJEEVAN (CRIMINAL APPEAL No.1283 of 2011) but that decision is also not applicable at this stage.
Learned counsel for petitioners raised another objection that since the complainant did not mention anything in his complaint by way of affidavit that he has not filed any similar complaint in any other court, the complaint has to be thrown out as per the decision of Supreme Court in DAMODAR S.PRABHU Vs.
[1]
SAYED BABALAL H ( ).
I have perused the above referred decision. In that decision, Honourable Supreme Court made an observation that the complainant to disclose by way of Sworn Affidavit to the effect that no other complaint has been filed in respect of the same transaction, in any other court. Since there is no statutory rule contemplating filing of such an affidavit, I feel that petitioners cannot take that ground at this stage and it is a matter of evidence on which, trial court can consider whether there is any malafide intention on the part of complainant by filing similar complaint in any other court in respect of same transaction.
Learned counsel for petitioners relied on decisions of supreme Court in M.S.NARAYANA MENON ALIAS
[2]
MANI VS. STATE OF KERALA AND ANOTHER ( ),
SUDHIR KUMAR BHALLA Vs. JAGDISH CHAND &
[3]
ETC., ETC., ( ) for the proposition when the chqeues were issued for security purpose, ingredients under Section 138 of Negotiable Instruments Act are not at all attracted. But as already referred above, in view of pleadings in the complaint, that aspect cannot be decided at this stage and it has to be considered only on the basis of evidence.
So these decisions are not applicable to the facts of the present case.
The other grounds taken is that A.3 is not a Director and in respect of other accused except omnibus allegations, there are no allegations attracting ingredients of Section 141 of Negotiable Instruments Act and therefore, proceedings against them are to be quashed.
Second respondent conceded that A.3 is not a Director and so far A.3 is concerned, there cannot be any objection to quash, but with regard to other petitioners, there is specific allegation in the complaint that they are involved in day-to-day activities of A.1 company, therefore, objection of the counsel for petitioners is not tenable.
On a consideration of material, I have to accept the argument of counsel for second respondent because it is specifically pleaded in the complaint that A.2 to A.5 are involved in the day-to-day affairs of A.1 company. So far as A.3 is concerned, since she is not a Director on the date of cheque and as second respondent has no objection, she can be relieved by quashing the proceedings against her.
High Court in exercise of its inherent power under Section 482 of Code of Criminal Procedure cannot not quash the complaint or criminal case by weighing the correctness and sufficiency of evidence. The entire allegations in the complaint and the documents filed thereto have to be taken into consideration to know whether allegations in the complaint constitute prima facie offence or not. It cannot be disputed that inherent jurisdiction of this court under Section 482 Cr.P.C. can be exercised to quash proceedings in proper case either to prevent abuse of process of court or otherwise to secure ends of justice.
Abuse of process of court is a ‘term’ generally applied to a proceeding which is wanting in bonafides and is frivolous, vexatious or oppressive.
In other words, it is a ‘term’ used in connection with action for using some process of court maliciously to the injury of another person. Simply stated abuse of process of court would mean an improper use of legal process with a view to obtain unfair advantage or undeserving benefit. The phrase ends of justice may be said that connotation may mean full and compete justice between the parties. The word justice would mean justice which Cr.P.C. is designed to achieve.
Here it is not the case of the petitioners that the allegations in the complaint do not constitute any prima facie offence. According to petitioners basing on the documents that they have produced now in the quash petition, the allegations in the complaint have to be thrown out. As already observed supra, the contents of the documents relied on by the petitioners with reference to plea that the cheques were given as security is to be weighed only on the basis of evidence in view of specific allegations in the complaint. Therefore, as rightly pointed out by advocate for second respondent, grounds urged by the petitioners are the defences available to the petitioners which they have to agitate before the court concerned and they cannot request this court to quash proceedings on the basis of those defences.
For these reasons, I am of the view that the proceedings against A.3 alone can be quashed and so far as other petitioners are concerned, there are no grounds to quash.
Accordingly, this Criminal Petition is partly allowed quashing proceedings against A.3 and petition in respect of other accused is dismissed.
As a sequel to the disposal of this Criminal Petition, the Miscellaneous Petitions, if any, pending, shall stand dismissed.
JUSTICE S.RAVI KUMAR Dated 8-10-2014.
Dvs.
HONOURABLE SRI JUSTICE S.RAVI KUMAR Dvs CRIMINAL PETITION No.8578 OF 2012 Dated 8-10-2014
[1] (2010) 5 SUPREME COURT CASES 663
[2] (2006) 6 SUPREME COURT CASES 39
[3] AIR 2008 SUPREME COURT 2407