K.A. Mohammed Shafi, J. 1. These applications are filed to quash annexure-E complaint and to set aside the process issued against the petitioners in C. C. No. 368 of 1998 on the file of the Judicial First Class Magistrate's Court-II, Ernakulam. Crl. M. C. No. 2789 of 1998 is filed by the first and third accused and Crl. M. C. No. 2790 of 1998 is filed by the second accused in that case.
2. The second respondent filed a complaint before the Court of the Judicial First Class Magistrate-II, Ernakulam, against the petitioners as accused Nos. 1 to 3 alleging offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter called "the Act") alleging that a cheque for Rs. 51 lakhs issued by the second accused, on behalf of the first accused partnership firm of which the third accused is also a partner, as the managing partner, towards the discharge of the debt due to the second respondent bounced and the accused did not pay the amount in spite of the notice issued by the second respondent intimating about the dishonour of the cheque and demanding payment. The learned magistrate took cognizance of the offence and issued process to the accused. On receipt of the summons, the accused have filed these petitions to quash the proceedings before this court.
3. Learned senior counsel appearing for the petitioners has mainly raised three contentions before this court to substantiate the contentions of the petitioners that the complaint filed by the second respondent is absolutely unsustainable and the cognizance taken by the magistrate is illegal and, therefore, this court should exercise its jurisdiction under Section 482 of the Code of Criminal Procedure to quash the complaint and the entire proceedings. The first contention raised by the petitioners is that the cheque issued for Rs. 51 lakhs in this case is not in discharge of any debt or legally enforceable liability as contemplated under the Act and it was issued by way of security in pursuance of the agreement and as such the provisions of Section 138 of the Act are not attracted in this case. The second contention raised by the petitioners is that the cheque in question was issued by the second accused in respect of his personal account in the bank and, therefore, it cannot be contended that the cheque was issued on behalf of the partnership firm. The third contention is that even though it is construed that the cheque in question is issued on behalf of the first accused partnership firm, the third accused who is the wife of the second accused and only a sleeping partner of the firm, is not liable in this case in view of the provisions of Section 141 of the Act.
4. By referring to the provisions of the agreement entered into between the petitioners herein and the second respondent, a copy of which is marked as annexure A in these cases, learned senior counsel submitted that the cheque in question was issued only as a collateral security in this case and no amount has been paid by the second respondent to the petitioners as per the terms of the agreement and there is only a promise by the second respondent to pay the amount and as security for the agreement the second accused has issued the cheque. In the agreement, it is stated that in consideration of the agreement the first party, viz., the second respondent, the complainant, agrees to pay an advance of Rs. 51 lakhs against supply including the advance already availed of recoverable in instalments against supply effected. It is also stated in the agreement that the processor, viz., the second respondent herein agreed to pay sufficient advance to the agent, viz., the accused/petitioners herein for supply of materials which can be recovered from the cost of materials not exceeding 20 per cent. in every settlement. It is also stated in the agreement that as a token of security against the advance paid by the processor, the agent has today handed over a cheque for Rs. 51 lakhs, No. 800303, dated January 1, 1998, drawn on the Syndicate Bank which will be encashed by the processor only in the event of default for settlement of advance by the agent. The cheque will have validity up to June 30, 1998. In the above case, the processor shall give the agent 15 days notice in writing. By relying upon the above recitals in the agreement learned senior counsel for the petitioners vehemently argued that it is clear from the above recitals made in the agreement that the cheque is issued only as a collateral security for the due performance of the agreement and it will not come within the ambit of Section 138 of the Act. But on a reading of the entire recitals made in annexure A agreement as a whole it is clear that though it is initially stated that the second respondent herein agreed to pay an advance of Rs. 51 lakhs to the petitioners, subsequently it is clearly stated in the agreement that the petitioners have received Rs. 51 lakhs as advance including the prior liability due from the petitioners to the second respondent and the petitioners have acknowledged the receipt of advance amount of Rs. 51 lakhs and the second accused issued the cheque for Rs. 51 lakhs in question towards discharge of the debt of Rs. 51 lakhs. Moreover, the question whether the cheque is, in fact, issued in discharge of a debt or legally enforceable liability or only as collateral security is a matter to be considered by the trial court at the stage of evidence.
5. Though it is contended by the petitioners that the cheque in question is issued by the second accused drawn on his individual account in the bank which was not binding on the partnership firm and the other partner, there is no recital in annexure A agreement to substantiate the contention that the cheque drawn on the individual account of the second accused was issued to the second respondent. Notice issued by the second respondent to the petitioners dated January 6, 1998, is produced as annexure B. It is stated in the notice that towards payment of the said advance and to discharge the said debt due from the petitioners, they have handed over a cheque No. 800303, dated January 1, 1998, for Rs. 51 lakhs drawn on Syndicate Bank. Copy of the complaint filed by the second respondent is marked as annexure E. In the complaint, it is stated that towards repayment of the said advance in the case of default of the terms of the above agreement, the second accused on behalf of the first accused issued a cheque in favour of the complainant dated January 1, 1998, bearing No. 800303 for a sum of Rs. 51 lakhs drawn on the account maintained by the accused in the Syndicate Bank, Betim, Goa. There is a specific recital in the complaint that the cheque is issued by the second accused on behalf of the first accused. There is no mention therein that the cheque was drawn on the individual account of the second accused, but it is clearly stated that the cheque was drawn on the account maintained by the accused. Therefore, the recitals in the agreement executed by the petitioners and the second respondent, notice issued and the complaint filed by the second respondent did not support the contention of the petitioners that the cheque was issued by the second accused drawn on the personal account of the second accused. The question whether the cheque in question is issued by the second respondent drawn on his personal account or on the account of the partnership firm is a matter to be considered at the stage of evidence.
6. Annexure A agreement is executed by the first accused partnership firm, the second accused as the managing partner and the third accused as the partner of the firm. Accused Nos. 2 and 3 are the executants and signatories to annexure A agreement. In the complaint filed by the second respondent, it is stated in para. 2 as follows :
"The first accused is a registered partnership firm having its office at Revthala, Malvin District, on the Sindhudurg, Maharashtra State. Accused Nos. 2 and 3 are respectively the managing partner and partner of the said firm who are in charge of and responsible for the conduct of its business. Both of them are not only involved in the general administration of the first accused firm, but also play an active role in its day-to-day management."
7. It is also stated in the complaint that on behalf of the first accused firm, accused Nos. 2 and 3, its partners, have entered into an agreement with the second respondent. It is clear from annexure A agreement and annexure E complaint that there are clear recitals to the effect that the third accused is also actively involved as a partner in the affairs of the partnership firm. Moreover, the question whether the third accused is only a sleeping partner of the firm is a matter to be decided on evidence.
8. Relying upon the decisions in Municipal Corporation of Delhi v. Ram Kishan Rohtagi, AIR 1983 SC 67 and State of Haryana v. Bhajan Lal, AIR 1992 DC 604, the senior counsel appearing for the petitioners submitted that the criminal proceedings initiated by the second respondent under Section 138 of the Act are not sustainable since there is an express legal bar under the provisions of Sections 138 to 141 of the Act and the complaint is filed with mala fide intention and ulterior motive to harass the petitioner. In the decision in Municipal Corporation of Delhi v. Ram Kishan Rohtagi, AIR 1983 SC 67, the apex court relying upon an earlier decision in Smt. Nagawwa v. Veeranna Shivalingappa Konjalgi, AIR 1976 SC 1947 has held that in the five cases enumerated therein the order of the magistrate issuing process against the accused can be quashed or set aside, though it is further stated that those cases are clearly illustrative and provide sufficient guidelines to indicate the contingencies in which the High Court can quash the proceedings. In the decision in State of Haryana v. Bhajan Lai, AIR 1992 SC 604, the apex court has enlarged the five categories of cases stated in the above ruling and enumerated seven categories of cases in which the High Court can exercise its power under Article 226 of the Constitution or under Section 482 of the Code of Criminal Procedure to interfere with the proceedings relating to cognizable offences to prevent the abuse of process of the court or otherwise to secure the ends of justice. In this case reliance is placed by learned senior counsel for the petitioner on Clauses 6 and 7 in paragraph 108 of the judgment which read as follows (page 629) :
"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 institution 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.
Where a criminal proceeding is manifestly attended with mala fides 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."
9. There is no legal bar in the Criminal Procedure Code or under the Negotiable Instruments Act against the institution and the continuance of the criminal proceedings under Section 138 of the Act against the petitioners. Absolutely no allegation is made by the petitioners against the second respondent that the above criminal proceedings is instituted mala fide or with malicious intention to harass the petitioners or with oblique motive to wreak vengeance against them. Therefore, the above decisions of the apex court are of no help to the petitioners in this case to quash the proceedings initiated against them. It is clear that the petitioners cannot bring this case in any one of the clauses enumerated in the above decisions enabling to quash the proceedings initiated against them.
10. The fact that the dishonour of the cheque was due to closure of the account or the stop payment by the drawer of the cheque is not of any avail to the accused in proceedings instituted under Section 138 of the Act as authoritatively so laid down by the decision in Modi Cements Ltd. v. Kuchil Kumar Nandi [1998] 92 Comp Cas 88 (SC). Hence, the contention that in this case the cheque was dishonoured due to the issuance of stop payment memo by them is of no help to the petitioners to quash the proceedings under Section 482 of the Code of Criminal Procedure.
11. The apex court has in various pronouncements laid down the powers and constraints of this court in exercising its inherent jurisdiction under Section 482 of the Criminal Procedure Code to quash the proceedings in cases where cognizance of offence is taken by the lower court. In the decision in Dhanalakshmi v. R. Prasanna Kumar, AIR 1990 SC 494, 495, the Supreme Court has observed as follows :
"Section 482 of the Code of Criminal Procedure empowers the High Court to exercise its inherent powers to prevent abuse of the process of court. In proceedings instituted on a complaint exercise of the inherent power to quash the proceeding's is called for only in cases where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance is taken by the magistrate it is open to the High Court to quash the same in exercise of the inherent powers under Section 482. It is not, however, necessary that there should be a meticulous analysis of the case, before the trial to find out whether the case would end in conviction or not. The complaint has to be read as a whole. If it appears on a consideration of the allegations in the light of the statement on oath of the complainant that ingredients of the offence/offences are disclosed, and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court."
12. It is clear from the contentions raised by the petitioners in these cases that all those contentions are debatable issues which are to be decided at the time of trial of the case and cannot be urged in proceedings under Section 482 of the Criminal Procedure Code, since this court is not entitled to consider in detail or meticulously analyse the contentions so as to find out whether the case will end in conviction or not, after trial, in such proceedings. The court can only consider the allegations made in the complaint and other documents and materials placed before the court to find out whether the ingredients of the offence are disclosed and the complaint is filed with mala fide intention or/oblique motive to vex and harass the accused. It is clear from the complaint filed by the second respondent and the documents produced along with the complaint that there are materials prima facie to make out an offence punishable under Section 138 of the Act and there is nothing on record to suggest that the complaint is filed with the deliberate intention to harass the petitioners. Therefore, there is no sufficient ground to set aside the complaint filed by the second respondent against the petitioners before the Judicial First Class Magistrate's Court-II, Ernakulam, and the process issued by the court against the petitioners.
13. Therefore, these Crl. MCs. are dismissed.