NEUTRAL CITATION
R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 20534 of 2021
With
R/CRIMINAL MISC.APPLICATION NO. 20576 of 2021
With
R/CRIMINAL MISC.APPLICATION NO. 19642 of 2021
With
R/CRIMINAL MISC.APPLICATION NO. 1665 of 2020
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 ?
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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SHIVANI W/O MANISH VIJ
Versus
VIJAYBHAI LABHUBHAI AAL POA OF M/S. CERATUNE CERAMIC
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Appearance:
MR ANKUR Y OZA(2821) for the Applicant(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 1
MR DHAWAN JAYSWAL, APP for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 18/08/2023
COMMON ORAL JUDGMENT
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NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined
1. All these applications are filed under Section 482 of the Code of Criminal Procedure, 1973 (`the Code' for short) for quashing and setting aside the complaints being Criminal Case Nos.262 of 2020, 263 of 2020, 264 of 2020 and 311 of 2019 respectively, pending before the learned Judicial Magistrate, First Class, Thangadh, District Surendranagar under the provisions of the Negotiable Instruments Act (`NI Act' for short).
2. As the common question of facts and law are involved in these applications, at the request of learned advocates for the parties, they are heard together and disposed of by this common oral order.
3. Rule returnable forthwith. Learned APP Mr.Jayswal waives service of notice of rule for respondent no.2. Though served, none appears for respondent no.1-complainant.
4. For the sake of convenience, the facts of Criminal Miscellaneous Application No.20534 of 2021 are considered, as stated in the application, which are as under:
Page 2 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined 4.1 That the applicant was one of the directors of the company named M/s Waaman Products Pvt.Ltd.; she resigned from the post of director on 28.7.2018, which was accepted on 6.8.2018; the impugned complaint came to be filed by respondent no.1-complainant against M/s Waaman Products Pvt.Ltd. and others wherein the applicant is joined as accused no.3 as director of the said company for the dishonour of the cheques; it is these complaints which are prayed to be quashed by way of these applications.
5. Heard learned advocates for the parties.
5.1 Learned advocate for the applicants submitted that the applicant resigned from the post of director much before issuance of cheques; that the complainant was well within knowledge of the said fact at the time of commission of alleged offence; that the applicant played mischief with the court of learned Magistrate by placing on record the `Company Master Data' to represent that the applicant is a director of the company; that the respondent no.1 intentionally made Page 3 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined false statement on oath that the applicant is a director of the company and gave false evidence in form of `Company Master Data' that the respondent no.1 partnership firm and other partners had abducted the husband of the applicant when he came to Thangadh to attend court proceedings of another complaint made by the respondent no.1 and extracted the entire cheque book of M/s Waaman Products Pvt.Ltd. Including the cheques which are subject matter of the applications; that the applicant is not the signatory of the cheques; that there is nothing in the complaint to specify that the applicant was responsible for the day-to-day affairs of the company;
that the ingredients of the provisions invoked under NI Act are not made out. He, therefore, prayed to allow these applications. In support of his submissions, learned advocate Mr.Oza for the applicant relied in the decision in the case of Harshendra Kumar D v.Rebatilata Koley & Ors., (2011) 3 SCC 351.
6. Per contra, learned APP for respondent no.1- state has objected these applications and submitted that this Court should not exercise its powers by interfering with the proceedings of recovery of amount and the proceedings initiated under Section 138 of the Act are Page 4 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined perfectly justified.
7. Though served, none appeared for respondent no.2-complainant.
7. I have considered the rival submissions and perused the material on record.
8. At the outset, the provisions of Sections 138, 141 and 142 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 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 Page 5 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined 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 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."
"141 Offences by companies. (1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was Page 6 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and proceeded against and punished accordingly: Provided that nothing contained in this subsection shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence:
Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter. (2) Notwithstanding anything contained in subsection (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attribute to, any neglect on the part of, any director, Manager, secretary, or other office of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation. For the purposes of this section, Page 7 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined
(a) "company" means any body corporate and includes a firm or other association of individuals; and
(b) "Director", in relating to a firm, means a partner in the firm."
142. Cognizance of offences.--
[(1)] Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),--
(a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;
(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138: 2 [Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period;]
(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138.].
[(2) The offence under section 138 shall be inquired into and tried only by a court within whose local jurisdiction,--
(a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, Page 8 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined is situated; or
(b) if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.
Explanation.--For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account.] [142A. Validation for transfer of pending cases.-- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974) or any judgment, decree, order or direction of any court, all cases transferred to the court having jurisdiction under sub-section (2) of section 142, as amended by the Negotiable Instruments (Amendment) Ordinance, 2015 (Ord. 6 of 2015), shall be deemed to have been transferred under this Act, as if that sub-section had been in force at all material times. (2) Notwithstanding anything contained in sub-section (2) of section 142 or sub-section (1), where the payee or the holder in due course, as the case may be, has filed a complaint against the drawer of a cheque in the court having jurisdiction under sub-section (2) of section 142 or the case Page 9 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined has been transferred to that court under sub-section (1) and such complaint is pending in that court, all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court irrespective of whether those cheques were delivered for collection or presented for payment within the territorial jurisdiction of that court.
(3) If, on the date of the commencement of the Negotiable Instruments (Amendment) Act, 2015 (26 of 2015), more than one prosecution filed by the same payee or holder in due course, as the case may be, against the same drawer of cheques is pending before different courts, upon the said fact having been brought to the notice of the court, such court shall transfer the case to the court having jurisdiction under sub-section (2) of section 142, as amended by the Negotiable Instruments (Amendment) Ordinance, 2015 (Ord. 6 of 2015), before which the first case was filed and is pending, as if that sub-section had been in force at all material times.]
9. Now, if the facts of the present case are perused, it transpires from the material on record that the applicant has resigned as a director of the company much before the issuance of cheques, however, the complainant has produced the Company Master Data before the learned trial Court at the time of filing of Page 10 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined complaint to show that the applicant was a director of the company at the time of commission of alleged offences, which is a disputed fact; that the statutory notice was issued by the complainant on 21.2.2020 which was served on the applicant on 5.3.2020, however, the same was not replied by the applicant, which is an admitted fact, to clear her stand that she has resigned as a director of the company and she is not responsible for the day-to-day affairs of the company; the said contention is taken for the first time in this application which ought to have been taken at the time of giving reply to the notice itself. This Court cannot conduct mini trial or roving inquiry at the stage of exercising the powers under Section 482 of of the Code and therefore, this Court cannot exercise the powers under Section 482 of Code at this initial stage.
11. 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(13) Scale, page 543, more particularly, paragraphs 43 and 46, which read as under:
Page 11 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined "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 are not sufficient to fasten the vicarious liability upon the respondent by virtue of Section 141 of the NI Act.
46. When in view of the basic averment process is issued the complaint must proceed against the Directors or partners as the case may be. But if any Director or Partner wants the process to be quashed by filing a petition under Section 482 of the Code on the ground that only a bald averment is Page 12 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined made in the complaint and that he is really not concerned with the issuance of the cheque, he must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his contention. He must make out a case hat making him stand the trial would be an abuse of process of court. He cannot get the complaint quashed merely on the ground that apart from the basic averment no particulars are given in the complaint about his role, because ordinarily the basic averment would be sufficient to send him to trial and it could be argued that his further role could be brought out in the trial. Quashing of a complaint is a serious matter. Complaint cannot be quashed for the asking. For quashing of a complaint, it must be shown that no offence is made out at all against the Director or Partner."
12. It is also 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 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 Page 13 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined 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 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."
14. In view of above discussion as well as settled position of law and after considering the facts as alleged Page 14 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023 NEUTRAL CITATION R/CR.MA/20534/2021 JUDGMENT DATED: 18/08/2023 undefined in the complaint filed under Section 138 of the NI Act FIR and circumstances of the present case and considering the disputed question involved in the matters which are required to be tested by a proper trial of the matters, 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. Let the trial Court decide all the contentions raised by the parties after giving proper opportunity to the parties in the proceedings of trial of respective Criminal Case Nos.262 of 2020, 263 of 2020, 264 of 2020 and 311 of 2019 respectively, pending before the learned Judicial Magistrate, First Class, Thangadh, District Surendranagar, in accordance with law and as expeditiously as possible, preferably within a period of one year from today.
15. Resultantly, all these applications are dismissed. Rule is discharged. Interim relief, if any, stands vacated.
(SANDEEP N. BHATT,J) SRILATHA Page 15 of 15 Downloaded on : Sun Sep 17 01:40:32 IST 2023