IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF APRIL, 2019 BEFORE THE HON’BLE MR.JUSTICE ARAVIND KUMAR CRIMINAL PETITION NO.2822/2018 BETWEEN 1. M/S VIKAT HOTELS PVT. LTD., H.O 9/2, STATE BANK ROAD, BEHIND INDIA GARAGE, ST. MARKS ROAD BANGALORE-560001 REPRESENTED BY ITS MANAGING DIRECTOR MR. N K KASHYAP.
2. MR. N K KASHYAP MANAGING DIRECTOR M/S. VIKAT HOTELS PRIVATE LIMITED, NO.9/2, STATE BANK ROAD BEHIND INDIA GARAGE ST.MARKS ROAD BANGALORE-560001. ... PETITIONERS (BY SRI JAYAKRISHNA T.S ON BEHALF OF SMT. MAYA HOLLA, ADV.) AND HOUSING & URBAN DEVELOPMENT CORPORATION LTD., REGIONAL OFFICE AT MANIPAL CENTRE NORTH BLOCK, 7TH FLOOR, UNIT NO.703 & 704, NO.47, DICKENSON ROAD, BANGALORE-560042 ... RESPONDENT (BY SRI LOKESHA KALAPPA B ON BEHALF OF SRI GANAPATI HEGDE, ADV.) THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 CR.P.C PRAYING TO QUASH THE PRIVATE COMPLAINT IN C.C.NO.26243/2011 AND THE ORDER DATED 17.02.2018 PASSED BY THE MAGISTRATE IN C.C.NO.26243/2011.
THIS CRIMINAL PETITION COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER This matter was heard for some time on 03.04.2019 and was ordered to be listed on 05.04.2019 making it clear that in the event of amount covered under the subject cheques are not paid, matter will be heard and disposed of on merits.
2. When the matter was listed on 08.04.2019, Shri. Vivek Holla, learned counsel appearing on behalf of M/s. Holla and Holla Associates made a submission that he would ascertain from the petitioners as to the time within which the petitioners would be ready and willing to deposit the amount. Today, a memo has been filed stating thereunder that respondent is willing to pay a sum of Rs.38,50,00,000/- (Rupees Thirty Eight Crores Fifty Lakhs only) immediately to the respondent subject to the respondent handing over the title deeds and property related documents by enclosing the purported communication dated 08.04.2019 said to have been received and purported to have written by M/s. Sadhwani International addressed to the petitioners herein. The said memo is placed on record.
3. The respondent herein filed a complaint under Section 200 of Criminal Procedure Code read with Section 138 of Negotiable Instruments Act which was registered in PCR No.19637/2009 & PCR No.72859/2019. Subsequently, it has been registered as C.C. No.26243/2011 and C.C. No.26072/2011. It is specifically alleged in the complaint that complainant is a Government Company wholly owned by Government of India and it has sanctioned loan in a sum of Rs.20,80,00,000/- (Rupees Twenty Crores Eighty Lakhs only) to the accused persons and for discharge of the said debt post dated cheques (3 numbers) (in each case) was issued by accused person; it has been further alleged that accused No.2 is the Managing Director of accused No.1-Company and accused No.3 is the Director of accused No.1 and both accused Nos.2 and 3 are in-charge and responsible for conduct and management of business of accused No.1-Company and as such accused persons are liable to be prosecuted for the offence punishable under Section 138 of Negotiable Instruments Act; it is also specifically alleged that cheque issued by accused No.2 is in connivance with accused No.3 and as such, accused No.3 is also liable to be punished for the offence punishable under Section 138 in the teeth of Section 148 of Negotiable Instruments Act.
4. On summons being issued petitioner herein appeared and filed an application under Section 147 of Negotiable Instruments Act to consider the proposal of the accused and to grant such other & further relief the court may deem fit. It was contended in the affidavit supporting the application that entire amount of Rs.38.50 crores would be paid as one time settlement directly to the complainant and firmly complete and conclude the One Time Settlement with accused No.1 and sought for release of the mortgage over the property which had been mortgaged to the complainant including the shares of the Company and to withdraw all the cases pending. This application was opposed to by the complainant by filing objections contending that in order to recover the amount due to the complainant proceedings have already been initiated before the Debt Recovery Tribunal and also under the Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interest Act (for short ‘SARFAESI Act’) and in the said process the mortgaged property was auctioned in which M/s. Global Engineering Markets India Limited has deposited earnest money deposit or Rs.3.0 crores being 10% of reserve price of the sum and said Company being declared as successful bidder as per e-auction had failed to pay the balance consideration of 15% and as such, it was compelled to forfeit the earnest money deposit of Rs.3.0 crores. It is also contended that unsuccessful bidder had approached the Debt Recovery Tribunal by filing S.A. 286/2015 under Section 17 of the SARFAESI Act and said application came to be dismissed on 31.03.2015 and being aggrieved by the same, the bidder had approached this court in W.P. No.16016/2015 and obtained stay of the order which was continued during the pendency of the writ petition in an intra court appeal No.1857/2016 which had dismissed the appeal and the Hon’ble Apex Court in S.L.P Nos.37493-37494/2016 had restored the order of the learned Single Judge with a direction to dispose off the writ petition preferably within a period of three months. Hence, it was contended that the complainant was pursuing the matter before the Single Judge adjudicating W.P. No.16016/2015 and sought for dismissal of the application filed by accused. Learned trial judge by order dated 17.02.2018 has dismissed the said application which is under challenge in these proceedings.
5. It is the contention of Mr. Jayakrishna, learned counsel appearing for petitioner that complainant has accepted one time settlement offered by the petitioner in their objections to the application filed under Section 147 of Negotiable Instruments Act as per Annexure-J and as such, continuation of proceedings for the alleged offence under Section 138 of Negotiable Instruments Act would be onerous and would not serve any purpose and even now petitioner is ready to pay the amount. In fact as noticed herein above, this court while granting time to the learned counsel for the petitioner to ascertain as to within what time the petitioner would be ready and willing to deposit the amount, matter came to be adjourned and yet no statement has been made with regard to the time frame within which the amount would be deposited. However, for depositing the amount a link or nexus is sought to be established to mortgage by contending that until and unless the mortgaged property is not released or simultaneously such an event not taking place, petitioner’s investor would not be in a position to pay the amounts covered under subject cheques. This statement of the petitioner could only be said as a moon shine assurance which would not merit acceptance. If at all complainant has accepted one time settlement, it is for the complainant to proceed in accordance with law. However, under the guise of such settlement having been arrived at which has not reached to its logical end, proceedings initiated before the jurisdictional magistrate for the alleged offence punishable under Section 138 of Negotiable Instruments Act cannot be made to languish or in other words the said proceedings has to see its logical end.
6. In fact, in the memo filed today by the learned counsel for the petitioner it requires to be noticed that it is not the petitioner who is undertaking to pay the amount but it is proposed investor M/s. Sadhwani International and who has nothing to do with the transactions between Complainant and petitioners. Hence, in order to ascertain the bonafide of the petitioner this court had directed the petitioner to deposit the amounts before this court so as to pass suitable orders in that regard. Instead of making a positive statement as to whether petitioner is ready and willing to deposit the amount covered under the cheques in question it has only reiterated its earlier stand of linking the amount being deposited to discharge of mortgage which is an issue alien to these proceedings and same has to be sorted out before the jurisdictional Debt Recovery Tribunal or in any other civil proceedings by the parties.
7. Section 147 of the Negotiable Instruments Act provides for compounding the offence. The said section does not bar or prohibit the parties compounding at any stage including the appellate stage. However, the said provision does not provide for postponement of the proceedings on the ground of probable settlement being arrived at between the parties or conditions of settlement between the parties would be thrashed out by reciprocal promises being performed. This not being in the scope and ambit of Section 147 of Negotiable Instruments Act proceedings before Magistrate cannot be stalled. Thus, under the guise of matter being settled and factually when there is no such settlement arrived between parties by filing a compromise petition if the proceedings are allowed to languish before the trial court, it would definitely result in judicial system being burdened with such litigations. Thus, learned trial judge has rightly rejected the said application and even now the petitioner is not ready and willing to deposit the amount and as already noticed hereinabove. A conditional offer has been made by petitioners which would not be in the realm, scope and consideration under Section 147 of Negotiable Instruments Act.
8. For the reasons aforestated, I do not find any good ground to entertain this petition and it is needless to state that during the pendency of the proceedings if the parties were to arrive at a settlement, the trial court would be at liberty to grant leave to compound the offences as provided under Section 147 of the Negotiable Instruments Act.
For the reasons aforestated this petition stands dismissed subject to observations made hereinabove.
SD/- JUDGE Chs*/- CT-HR