apls145,180,181,182 &183.16
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
Criminal Application [APL] No. 145 of 2016
WITH
Criminal Application [APL] No. 180 of 2016
WITH
Criminal Application [APL] No. 181 of 2016
WITH
Criminal Application [APL] No. 182 of 2016
WITH
Criminal Application [APL] No. 183 of 2016
A. Criminal Application [APL] No. 145 of 2016 :
Shri Prafulla Purushottam Gadge,
aged about major,
occupation - Business,
resident of Dhantoli, Nagpur. ..... Applicant
Versus
Buldana Urban Co-operative Credit Society,
Ltd. Buldana (Multistate) bearing
Registration No.MSCS/CR/2672008 office at
Shankar Setu Hatatma Gore Path, Buldana
and Branch Office at Ramdaspeth Nagpur,
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apls145,180,181,182 &183.16
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through its duly authorized officer
Mr. Vishal S/o Sadanand Irshid, aged about
36 years,
resident of R/o Ramdaspeth Nagpur. ..... Non-applicant.
*****
Dr. Anjan De, Adv., for the Applicant.
Mr. G. S. Lahoti, Adv., for non-applicant.
*****
B. Criminal Application [APL] No. 180 of 2016 :
Shri Prafulla Purushottam Gadge,
aged about major,
occupation - Business,
resident of Dhantoli, Nagpur. ..... Applicant
Versus
Buldana Urban Co-operative Credit Society,
Ltd. Buldana (Multistate) bearing
Registration No.MSCS/CR/2672008 office at
Shankar Setu Hatatma Gore Path, Buldana
and Branch Office at Ramdaspeth Nagpur,
through its duly authorized officer
Mr. Vishal S/o Sadanand Irshid, aged about
36 years,
resident of R/o Ramdaspeth Nagpur. ..... Non-applicant.
*****
Dr. Anjan De, Adv., for the Applicant.
Mr. G. S. Lahoti, Adv., for non-applicant.
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apls145,180,181,182 &183.16
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*****
C. Criminal Application [APL] No. 181 of 2016 :
Shri Prafulla Purushottam Gadge,
aged about major,
occupation - Business,
resident of Dhantoli, Nagpur. ..... Applicant
Versus
Buldana Urban Co-operative Credit Society,
Ltd. Buldana (Multistate) bearing
Registration No.MSCS/CR/2672008 office at
Shankar Setu Hatatma Gore Path, Buldana
and Branch Office at Ramdaspeth Nagpur,
through its duly authorized officer
Mr. Vishal S/o Sadanand Irshid, aged about
36 years,
resident of R/o Ramdaspeth Nagpur. ..... Non-applicant.
*****
Dr. Anjan De, Adv., for the Applicant.
Mr. G. S. Lahoti, Adv., for non-applicant.
*****
D. Criminal Application [APL] No. 182 of 2016 :
Shri Prafulla Purushottam Gadge,
aged about major,
occupation - Business,
resident of Dhantoli, Nagpur. ..... Applicant
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apls145,180,181,182 &183.16
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Versus
Buldana Urban Co-operative Credit Society,
Ltd. Buldana (Multistate) bearing
Registration No.MSCS/CR/2672008 office at
Shankar Setu Hatatma Gore Path, Buldana
and Branch Office at Ramdaspeth Nagpur,
through its duly authorized officer
Mr. Vishal S/o Sadanand Irshid, aged about
36 years,
resident of R/o Ramdaspeth Nagpur. ..... Non-applicant.
*****
Dr. Anjan De, Adv., for the Applicant.
Mr. G. S. Lahoti, Adv., for non-applicant.
*****
E. Criminal Application [APL] No. 183 of 2016 :
Shri Prafulla Purushottam Gadge,
aged about major,
occupation - Business,
resident of Dhantoli, Nagpur. ..... Applicant
Versus
Buldana Urban Co-operative Credit Society,
Ltd. Buldana (Multistate) bearing
Registration No.MSCS/CR/2672008 office at
Shankar Setu Hatatma Gore Path, Buldana
and Branch Office at Ramdaspeth Nagpur,
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apls145,180,181,182 &183.16
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through its duly authorized officer
Mr. Vishal S/o Sadanand Irshid, aged about
36 years,
resident of R/o Ramdaspeth Nagpur. ..... Non-applicant.
*****
Dr. Anjan De, Adv., for the Applicant.
Mr. G. S. Lahoti, Adv., for non-applicant.
*****
CORAM : A.S. CHANDURKAR, J.
Date on which arguments
were concluded : 15th November, 2017
Date on which judgment
is pronounced : 30th November, 2017
J U D G M E N T:
01. Admit. Heard finally with consent of counsel for the parties.
02. All these applications filed under Section 482 of the Code of Criminal Procedure, 1973 [for short, "the Code"] raise a challenge to the order passed by the learned Judicial Magistrate First Class issuing Process in the Complaints filed by the non-applicant herein under Section 138 of the Negotiable Instruments Act, 1881 [for short, "the ::: Uploaded on - 07/12/2017 ::: Downloaded on - 08/12/2017 01:01:37 ::: apls145,180,181,182 &183.16 6 Act of 1881"]. The order issuing Process had been challenged before the Sessions Court and the Revision Applications filed by the applicants herein have been dismissed.
03. Facts in all the applications are almost similar. For sake of convenience, the facts in Criminal Application [APL] No. 145 of 2016 are being referred to.
04. It is the case of the non-applicant-complainant that it is a Society registered under the provisions of the Multi-State Co-operative Societies Act, 2002 [for short, "the Act of 2002"]. The applicant - accused was in need of financial assistance and hence had obtained loan from the complainant. There being default in payment of the amounts borrowed, the complainant filed arbitration proceedings under Section 84 of the Act of 2002. An Award was passed by the Arbitrator, after which the accused and the complainant executed an agreement dated 26th March, 2012 by which the accused accepted the liability to repay the borrowed amount. It was further agreed that the accused would pay an amount of Rs. 46,00,000-00 by way of monthly installments. A cheque drawn by the accused in favour of the complainant was, however, dishonoured. The complainant, therefore, followed the procedure prescribed under Chapter-XVII of the Act of ::: Uploaded on - 07/12/2017 ::: Downloaded on - 08/12/2017 01:01:37 ::: apls145,180,181,182 &183.16 7 1881 and thereafter filed Complaint under Section 138 of the Act of 1881. The learned Magistrate on 12th March, 2013 issued Process in the Complaint.
05. The accused filed an application purportedly under Section 258 of the Code praying that the proceedings in the Complaint be dropped in view of the fact that a remedy under Section 84 of the Act of 2002 had been invoked and recovery proceedings in that regard were pending. This application was rejected by the learned Magistrate on the count that he had no jurisdiction to grant the prayer made in the application. This order was challenged before the Sessions Court which dismissed the Revision Application filed under Section 397 of the Code. Being aggrieved, the present proceedings have been filed.
06. Dr. A. De, the learned counsel for the applicants in support of the applications, submitted that the learned Magistrate had no jurisdiction to entertain the complaint filed under Section 138 of the Act of 1881. The complainant having invoked the remedy as provided under Section 84 (1) of the Act of 2002 and the Arbitrator thereafter having passed an Award, the only remedy available to the complainant was to have the Award executed. As per Clause (E) of the Agreement dated 26th March, 2012, the accused had issued a cheque. This ::: Uploaded on - 07/12/2017 ::: Downloaded on - 08/12/2017 01:01:37 ::: apls145,180,181,182 &183.16 8 payment was made in terms of the agreement entered into pursuant to the Award passed by the Arbitrator. Failure to abide by the agreement would amount to a dispute and as per provisions of Section 84 (1) of the Act of 2002, a dispute between a Multi-State Co-operative Society and its member was required to be referred to arbitration. Section 84(1) of the Act of 2002 started with non-obstante clause and, therefore, the Act of 2002 having come into force after the provisions of Chapter-XVII of the Act of 1881, were already in force said provisions had an overriding effect over the provisions of Section 138 of the Act of 1881. It was submitted that the expression "any other law for the time being in force" would include the Act of 1881 and, therefore, the complaint as filed under said provision was not maintainable. On this count, the order issuing Process was liable to be quashed. Moreover, the remedy for breach of the Agreement dated 26th March, 2012 could be invoked and the present proceedings filed under Section 138 of the Act, 1881 could not be utilized as a mode of execution of that agreement. In support of his submissions, the learned counsel placed reliance on the judgment of the Honourable Supreme Court in Maktool Singh Vs State of Punjab [1999 (3) SCC 321].
07. Shri G. Lahoti, learned counsel for the complainant, opposed ::: Uploaded on - 07/12/2017 ::: Downloaded on - 08/12/2017 01:01:37 ::: apls145,180,181,182 &183.16 9 the aforesaid submissions and supported the order passed by the learned Magistrate issuing Process. It was submitted that there was no bar to file a Complaint under Section 138 of the Act, 1881 as the cause of action for filing the same was independent of the proceedings under Section 84 (1) of the Act of 2002. What was provided under Section 84 (1) of the Act of2002 is the reference of a dispute. Under Section 138 of the Act of 1881, the offence was complete on the contingencies prescribed being satisfied. Merely because the Award passed by the Arbitrator was under challenge, the same would not preclude the payee of the cheque to invoke the right that was available under Section138 of the Act, 1881. The learned counsel referred to provisions of Section 142 of the Act of 1881 to urge that the expression used therein was "Court" and not "Arbitrator". There was no bar to invoke remedies available and, therefore, the complaint as filed under Section 138 of the Act of 1881 was maintainable. Reliance was placed on the judgment of the Punjab & Haryana High Court in Vijay Kumar v. The State of Punjab [1992 CR L J 1770].
08. I have heard the learned counsel for the parties at length and I have given due consideration to the respective submissions.
09. It is not in dispute that the complainant had filed arbitration ::: Uploaded on - 07/12/2017 ::: Downloaded on - 08/12/2017 01:01:37 ::: apls145,180,181,182 &183.16 10 proceedings against the accused under Section 84 (1) of the said Act. After the Award was passed by the Arbitrator, the accused after accepting his legal liability to clear the loan account executed an Agreement on 26th March, 2012. As per Clause (E) thereof, he had agreed to pay a sum of Rs. 46,00,000-00 by way of monthly installments. The cheque issued in that regard was dishonoured giving rise to filing of Complaints under Section 138 of the Act of 1881.
10. As per provisions of Section 84 (1) of the Act of 2002, any dispute touching the constitution, management or business of a Multi- State Co-operative Society arising between the Society and its member has to be referred to arbitration. As per said provisions, it is only the Arbitrator who has got jurisdiction to entertain such dispute and no other forum has got jurisdiction to do so. The expression "notwithstanding anything contained in any other law for the time being in force, if any dispute........." in Section 84(1) of the Act of 2002 would indicate that said provision has an overriding effect notwithstanding anything contained in any other law for the time being in force. In other words, the non-obstante clause has to be read in the context of "any dispute". This provision cannot be construed in a manner so as to give overriding effect to these provisions even with regard to proceedings other than "any dispute." Thus, if there is any ::: Uploaded on - 07/12/2017 ::: Downloaded on - 08/12/2017 01:01:37 ::: apls145,180,181,182 &183.16 11 other law for the time being in force prescribing the manner of resolving any dispute touching the constitution, management or business of a Multi-State Co-operative Society, the provisions of Section 84 (1) of the Act of 2002 would override the same. Said provision cannot be read in a manner to mean that even a complaint filed under Section 138 of the Act of 1881 cannot be entertained on account of said non-obstante clause. There is a fundamental distinction between a complaint filed under Section 138 of the Act of 1881 and a dispute arising under the said Act of 2002. It is well settled that a particular cause of action could give a right for invocation of civil remedy as well as remedy under Criminal Law. Once an offence is alleged to have been committed under Section 138 of the Act of 1881, the aggrieved person has got a statutory right to file a complaint under Section 138 of the Act of 1881. That right cannot be said to be taken away merely because some other civil remedy is also invoked by him.
I, therefore, find that provisions of Section 84 (1) of the Act of 2002 cannot be construed in the manner as sought to be contended by the accused. Merely because a dispute was filed under Section 84 (1) of the Act of 2002 and pursuant to the Award passed therein the accused issued a cheque which came to be dishonoured, it cannot be said that the complaint filed under Section 138 of the Act of 1881 itself was not maintainable. The judgment of the Honourable Supreme ::: Uploaded on - 07/12/2017 ::: Downloaded on - 08/12/2017 01:01:37 ::: apls145,180,181,182 &183.16 12 Court in Maktool Singh [supra] sought to be relied by the learned counsel for the applicants does not assist his contention. On the other hand, the judgment in Vijaykumar [supra] holding that reference of the dispute between the parties to an Arbitrator would not be a bar to initiate criminal proceedings on the same cause of action supports the stand of the non-applicant.
11. Perusal of the order passed by the Sessions Court indicates that it has rightly found that the complaint filed under Section 138 of the Act of 1881 was maintainable. The learned Magistrate was justified in issuing Process in the said proceedings. I, therefore, find that there is no case made out to quash the proceedings under Section 482 of the Code. It is clarified that this Court has only examined the validity of the order passed by the learned Magistrate issuing Process. The Complaints shall be decided on their own merits and it would be open for the accused to raise all legal defences as are permissible in law.
12. The Criminal Applications are accordingly dismissed.
At this stage the learned Counsel for the applicant seeks stay of the effect and operation of this order for a period of eight ::: Uploaded on - 07/12/2017 ::: Downloaded on - 08/12/2017 01:01:37 ::: apls145,180,181,182 &183.16 13 weeks. This request is opposed by the learned Counsel for the non- applicant. As interim relief was operating since 27 th June 2016, the same shall continue to operate for a period of six weeks from today and shall cease to operate at the end of aforesaid period.
Judge
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