NEUTRAL CITATION
R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION NO. 3821 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4148 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4141 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3823 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4140 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3847 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4143 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4366 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3842 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3846 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3833 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3898 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4146 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3828 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3829 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
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NEUTRAL CITATION
R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023
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4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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CHETAN DEVJIBHAI PATEL
Versus
STATE OF GUJARAT
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Appearance:
MR SALIL M THAKORE(5821) for the Applicant(s) No. 1
MR APURVA R KAPADIA(5012) for the Respondent(s) No. 2,3
MR DHAWAN JAYSWAL, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 09/08/2023
COMMON ORAL JUDGMENT
1. All these petitions are filed under Articles 226 and 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973 (`the Code' for short) for quashing and setting aside the complaints being Criminal Case Nos.48140 of 2019, 48190 of 2019, 48126 of 2019, 48166 of 2019, 48144 of 2019, 48130 of 2019, 57730 of 2019, 48145 of 2019, 48270 of 2019, 48193 of 2019, 57784 of 2019, 48146 of 2019, 48269 of 2019, 48136 of 2019 and 48324 of 2019, pending before the learned Judicial Magistrate (First Class), Surat filed under the provisions of Section 138 of the Negotiable Instruments Act (`NI Act' for short) and all orders Page 2 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined passed therein and all proceedings consequent to the same.
2. As the common question of facts and law are involved in these petitions, at the request of learned advocates for the parties, they are heard together and disposed of by this common oral judgment.
3. Rule returnable forthwith. Learned advocate Learned APP Mr.Jayswal waives service of notice for respondent no.1 and learned advocate Mr.Apurva Kapadiya waives service of notice of rule for respondent nos.2 and 3.
4. For the sake of convenience, the facts of Special Criminal Application No.3821 of 2021 are considered, as stated in the application, which are as under:
4.1 The petitioner is the accused in the complaint filed by respondent nos.2 and 3 and resident of Bella Casaa Society. Respondent no.2 is a partnership firm engaged in construction business and respondent no.3 is Page 3 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined one of the partners of respondent no.2-firm. It is averred in the application that The respondent no.2 launched a residential project in the year 2013 under the name Bella Casaa and on inquiring pursuant to the advertisement, the respondent no.2 and its partners assured the petitioner with respect to the project and the amenities it would have; that in the year 2017, the respondent no.2 executed a registered agreement to sell one flat with allied rights to the petitioner for which the petitioner paid part consideration to respondent no.2 and the balance consideration was to be paid later; that as security for future payments, the petitioner also gave a blank cheque to respondent no.2; that in March, 2018, the respondent no.2 executed a registered sale deed in favour of the petitioner for sale of the flat, which mentioned categorically that the petitioner has paid the entire sale consideration to respondent no.2; that at the time of taking over the possession of the flat, the development/completion of various amenities was pending and the project was incomplete. However, despite passage of considerable time, respondent no.2 did not complete the project as assured. Inspite of repeated requests by the society members, the respondent no.2 did not Page 4 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined complete the pending project work; that, as a last resort, the society members issued a notice to respondent no.2 on 15.7.2019 listing 19 pending works and informed the respondent no.2 that they would take legal against it by approaching RERA. It is averred that in August, 2019, as a counter blast to the actions taken by the society members, respondent no.2 deposited blank cheques that were given by the petitioner and other society members to respondent no.2 at the time of execution of agreement to sell and deposited the same by filling the amount and the date. That the complaint was filed in November, 2019, under Section 138 of the NI Act against the petitioner stating that on demanding late payment charges from the petitioner, the petitioner issued a cheque to respondent no.2 on 26.8.2019 towards late payment charges and the same got dishonoured. It is these complaints which are prayed to be quashed by way of these petitions.
5. Heard learned advocates for the parties. 5.1 Learned advocate Mr.Thakore for the petitioner submits that the sale deed as well as the questionnaire Page 5 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined categorically record that the petitioner has paid the entire sale consideration to respondent no.2 and that the respondent no.2 shall not raise any dispute with respect to non payment of consideration and upon the sale deed being executed, the petitioner had absolutely no liability left towards the respondent no.2. He submitted that when, since months, the society members were having disputes with respondent no.2 who was not completing the remaining works and therefore it not believable that the petitioner or other society members would issue cheques in favour of the respondent no.2. He submitted that the complaints are a counterblast against the steps taken by the society members against respondent no.2, particularly, the notice issued by them to approach RERA. He further submitted that the even if the allegations made in the complaint are taken at their face value, they do not constitute or disclose the commission of offence or case against the petitioner; that the allegations do not make out any of the ingredients of the offence alleged; that the allegations in the complaint are vague and bereft of any particularly; that the blank cheque was issued prior to the sale deed as security; that the alleged dishonour is for a cheque given as a Page 6 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined security and not with respect to any debt or liability. He, therefore, submitted that the ingredients of Section 138 of the NI Act are not made out and therefore prayed to allow these applications.
5.2 In support of his submissions, learned advocate for the petitioners relied on the following citations:
(1) Dashrathbhai Trikambhai Patel V/s Hitesh Mahendrabhai Patel & Anr., dated 11.10.2022 passed in Criminal Appeal No.1497 of 2022 by the Hon'ble Apex Court.
(2) Eicher Tractor Limited and Others V/s Harihar Singh and Another, reported in (2008)16 SCC 763.
(3) Madhavrao Jiwaji Rao Scindia and another etc. V/s Sambhajirao Chandrojirao Angre and Others, reported in AIR 1988 SC 709.
(4) Mohammad Wajid & Anr. V/s State of U.P. & Ors., dated 8.8.2023 passed in Criminal Appeal No.2340 of 2023 by the Hon'ble Apex Court.
6. Per contra, learned advocate Mr.Kapadia for the respondent nos.2 and 3 has opposed these petitions and submitted that this Court should not exercise its Page 7 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined powers by interfering with the proceedings of recovery of amount and the proceedings initiated under Section 138 of the Act are perfectly justified. He submitted that the impugned complaints are not an abuse of process of law and undated cheques were not issued towards the security. They are given against legally enforceable debt and the signature is not disputed. The complaint filed under the provisions of RERA are completely different proceedings and they cannot be connected with the impugned complaints just to exempt themselves from the said complaints. The cheques were given against the late payment charges and they were deposited and were dishonoured. He has further submitted that no reply is given to the notice issued under Section 138 of the NI Act and petitioners are admittedly signatories of respective cheques. Therefore, he submitted that this Court should not exercise inherent jurisdiction under Section 482 of the Code, which should otherwise be exercised sparingly. He, therefore, prayed to dismiss these petitions.
6.1 In support of his submissions, learned senior advocate Mr.Apurva Kapadia has relied on the following Page 8 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined citations:
(1) Rajeshbhai Paulbhai Chauhan V/s State of Gujarat decided on 14.9.2022 passed in Criminal Miscellaneous Application No.14408 of 2017 by this Court.
(2) Rathish Babu Unnikrishnan V/s State (Govt. of NCT of Delhi) and Another reported in 2022(0) AIJEL-SC 69169.
6.2 Learned APP Mr.Jayswal for respondent no.1- state has submitted that the facts of this case are subject matter of trial and this Court should not exercise inherent powers under Section 482 of the Code, which otherwise, should be exercised sparingly. He, therefore, prayed to dismiss all these petitions.
7. I have considered the rival submissions and perused the material on record.
8. At the outset, the provisions of Sections 138 and 141 of the NI Act are required to be seen, which read as under:
"138. Dishonour of cheque for insufficiency, etc., of funds in the account.
Where any cheque drawn by a person on an account Page 9 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined 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, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall without prejudice to any other provisions of this Act, be punished with imprisonment for "a term which may extend to two year", or with fine which may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless
(a) The cheque has been 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, whichever is earlier.
(b) The payee or the holder induce course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer, of the cheque, "within thirty days" of the receipt of information by him from the bank regarding the return of the cheques as unpaid, and
(c) The drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may Page 10 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other liability"
means a legally enforceable debt or other liability." Section 138 of the Act provides that a drawer of a cheque is deemed to have committed the offence if the following ingredients are fulfilled:
(i) A cheque drawn for the payment of any amount of money to another person;
(ii) The cheque is drawn for the discharge of the `whole or part' of any debt or other liability. `Debt or other liability' means legally enforceable debt or other liability; and
(iii) The cheque is returned by the bank unpaid because of insufficient funds.
9. In the case on hand, the cheques issued by the petitioner is not in dispute, the signature on the cheques is not in dispute. The basic contention raised by the petitioners is that the cheques were issued towards the security even before the execution of the sale deeds, Page 11 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined which is controverted and denied by the complainant to the extent that it is his say that the said cheques were issued towards the legally enforceable debt in the form of late payment charges. It is also a matter of dispute between the parties that these complaints are a counterblast to the proceedings of RERA initiated by the petitioners. Be that as it may. In the impugned complaints, the cheques are admitted to have been issued and signed by the petitioners. It is towards legally enforceable debt or security cannot be decided at the stage of quashment of the complaints and needs a full fledged trial and this Court cannot conduct a mini trial at this stage.
10. The ratio of the judgments relied on by the learned advocate for the petitioner are binding to this Court, however, considering the facts of the present case, these judgments are not helpful to the case of the petitioner in respective petitions.
11. It is fruitful to refer to the judgment in the case of S.Krishnamoorthy V/s Chellammal reported in (2015)4 SCC 559, wherein the Hon'ble Apex Court has Page 12 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined held in paragraphs nos.5,7 and 8 of which read as under:
"5. The above defence of the respondent (accused) before the High Court, in the petition filed under Section 482 of the Code, is nothing but absolutely factual in nature, which is neither admitted by the complainant, nor apparent on the face of the record. Such type of disputed factual defences could have been appreciated only by the trial court, after the parties led their evidence. In our opinion, the High Court committed grave error of law in examining the allegations and counter allegations which are disputed and factual in nature in a proceeding under Section 482 of the Code.
7. In view of the above position of law, we have no option but to set aside the order passed by the High Court as it has entered into highly disputed questions of fact and concluded that the material before it was sufficient to cause reasonable suspicion in the case of the complainant. That is not the ground on which powers under Section 482 of the Code can be exercised by the High Court.
8. Therefore, the appeal is allowed. The impugned order dated 5.8.2009 passed by the High Court of Judicature at Madras in Criminal O.P. No. 7989 of 2009 is hereby set Page 13 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined aside. The Criminal complaint (CC No. 120 of 2007) pending before the Judicial Magistrate, Dharapuram, shall stand revived. The trial court shall proceed in accordance with law."
12. In the case of Rathish Babu Unnikrishnan (supra), it is held by the Hon'ble Apex Court in paragraph nos.15, 16 and 17 as under:
"15. In the impugned judgment, the learned Judge had rightly relied upon the opinion of Justice J.S.Khehar for a Division Bench in Rajiv Thapar (supra), which succinctly express the following relevant parameters to be considered by the quashing Court, at the stage of issuing process, committal, or framing of charges.
"28. The High Court, in exercise of its jurisdiction under Section 482 of CrPC, must make a just and rightful choice.
This is not a stage of evaluating the truthfulness or otherwise of the allegations levelled by the prosecution/complainant against the accused. Likewise, it is not a stage for determining how weighty the defences raised on behalf of the accused are. Even if the accused is successful in showing some suspicion or doubt, in the allegations levelled by the prosecution/complainant, it would be impermissible to discharge the accused before trial. This is so because it would result in giving finality to the Page 14 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined accusations levelled by the prosecution/complainant, without allowing the prosecution or the complainant to adduce evidence to substantiate the same."
16. The proposition of law as set out above makes it abundantly clear that the Court should be slow to grant the relief of quashing a complaint at a pre-trial stage, when the factual controversy is in the realm of possibility particularly because of the legal presumption, as in this matter. What is also of note is that the factual defence without having to adduce any evidence need to be of an unimpeachable quality, so as to altogether disprove the allegations made in the complaint.
17. The consequences of scuttling the criminal process at a pre-trial stage can be grave and irreparable. Quashing proceedings at preliminary stages will result in finality without the parties having had an opportunity to adduce evidence and the consequence then is that the proper forum i.e., the trial Court is ousted from weightage the material evidence. If this is allowed, the accused may be given an un-merited advantage in the criminal process. Also because of the legal presumption, when the cheque and the signature are not disputed by the appellant, the balance of convenience at this stage is in favour of the complainant/prosecution, as the accused will have due opportunity to adduce defence evidence during the trial, to Page 15 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined rebut the presumption."
13. At this stage, it is also fruitful to refer to the judgment rendered by the Hon'ble Apex Court in the case of S.P.Mani and Mohan Dairy V/s Dr.Snehalatha Elangovan reported in 2022 SCC Online SC 1238, more particularly, paragraphs 43 to 45, which read as under:
"43. In the case on hand, we find clear and specific averments not only in the complaint but also in the statutory notice issued to the respondent. There are specific averments that the cheque was issued with the consent of the respondent herein and within her knowledge. In our view, this was sufficient to put the respondent herein to trial for the alleged offence. We are saying so because the case of the respondent that at the time of issuance of the cheque or at the time of the commission of offence, she was in no manner concerned with the firm or she was not in-
charge or responsible for day-to-day affairs of the firm cannot be on the basis of mere bald assertion in this regard. The same is not sufficient. To make good her case, the respondent herein is expected to lead umimpeachable and incontrovertible evidence. Nothing of the sort was adduced by the respondent before the High Court to get the proceedings quashed. The High Court had practically no legal basis to say that the averments made in the complaint Page 16 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined are not sufficient to fasten the vicarious liability upon the respondent by virtue of Section 141 of the NI Act.
44. We may also examine this appeal from a different angle. It is not in dispute, as noted above, that no reply was given by the respondent to the statutory notice served upon her by the appellant. In the proceedings of the present type, it is essential for the person to whom statutory notice is issued under Section 138 of the NI Act to give an appropriate reply. The person concerned is expected to clarify his or her stance. If the person concerned has some unimpeachable and incontrovertible material to establish that he or she has no role to play in the affairs of the company/ firm, then such material should be highlighted in the reply to the notice as a foundation. If any such foundation is laid, the picture would be more clear before the eyes of the complainant. The complainant would come to know as to why the person to whom he has issued notice says that he is not responsible for the dishonour of the cheque. Had the respondent herein given appropriate reply highlighting whatever she has sought to highlight before us then probably the complainant would have undertaken further enquiry and would have tried to find out what was the legal status of the firm on the date of the commission of the offence and what was the status of the respondent in the firm. The object of notice before the filing of the complaint is not just to give a chance to the drawer of the Page 17 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined cheque to rectify his omission to make his stance clear so far as his liability under Section 138 of the NI Act is concerned.
45. Once the necessary averments are made in the statutory notice issued by the complainant in regard to the vicarious liability of the partners and upon receipt of such notice, if the partner keeps quiet and does not say anything in reply to the same, then the complainant has all the reasons to believe that what he has stated in the notice has been accepted by the noticee. In such circumstances what more is expected of the complainant to say in the complaint."
14. In view of above discussion as well as settled position of law and after considering the facts as alleged in the complaint filed under Section 138 of the NI Act and that none of the petitioners of respective petitions had given reply to notice issued under section 138 of NI Act and that petitioners are signatories of cheques and circumstances of the present case, I am of the opinion that this is not a fit case to exercise the inherent powers under Section 482 of the Code and quash the impugned complaints as there are disputed question of facts, which are required to be adjudicated by leading evidence in trial. Let the trial Court decide all the Page 18 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023 NEUTRAL CITATION R/SCR.A/3821/2021 JUDGMENT DATED: 09/08/2023 undefined contentions raised by the parties after giving proper opportunity to the parties in the proceedings of trial of respective criminal cases, in accordance with law and as expeditiously as possible.
15. Resultantly, all these petitions are dismissed. Rule is discharged.
(SANDEEP N. BHATT,J) SRILATHA Page 19 of 19 Downloaded on : Sun Sep 17 00:50:53 IST 2023