NEUTRAL CITATION
R/CR.MA/17458/2018 ORDER DATED: 25/09/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 17458 of 2018
With
R/CRIMINAL MISC.APPLICATION NO. 17459 of 2018
With
R/CRIMINAL MISC.APPLICATION NO. 17551 of 2018
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ANKITBHAI SURESHBHAI LOTIYA
Versus
STATE OF GUJARAT & 1 other(s)
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Appearance:
MR PRATIK Y JASANI(5325) for the Applicant(s) No. 1
JEET Y RAJYAGURU(8039) for the Respondent(s) No. 2
MR CHINTAN DAVE, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 25/09/2023
ORAL ORDER
1. 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 No.3095 of 2018, 3094 of 2018 and 3096 of 2018 pending before the Court of the learned Chief Judicial Magistrate, Rajkot filed under the provisions of the Negotiable Instruments Act (`NI Act' for short).
2. The impugned complaints are filed by the respondent no.2-complainant for the dishonour of the cheques issued by the applicant. The legal notice was given to which Page 1 of 9 Downloaded on : Fri Sep 29 20:36:08 IST 2023 NEUTRAL CITATION R/CR.MA/17458/2018 ORDER DATED: 25/09/2023 undefined the applicant replied and as the amount was not paid within the stipulated time limit, the impugned complaints were filed, which are prayed to be quashed by way of these applications.
4. Heard learned advocate Mr.Jasani for the applicant, learned APP for the respondent no.1-state and learned advocate Mr.Rajyaguru for the respondent no.2- complainant.
4.1 Learned advocate for the applicant submitted that the impugned complaints against the applicant is abuse of process of law; that the cheques in question have been misused by Shri Dhirajlal Viradiya and his son Shri Sagarbhai Viradiya who had beaten the applicant and his father, for which FIR is filed by the applicant wherein the chargesheet is also filed after investigation. He submitted that as the cheques in question were misused by the accused named hereinabove, the applicant has no privity of contract with respondent no.2. He submitted that public notices were also issued for the misuse of the cheques in question and the debt as alleged in the impugned complaints is not a legally enforceable debt against the applicant. He submitted that the respondent no.2 has not given details about the dates on which the amount was lent; that there is no mention as to in whose presence the amount was given to the applicant; Page 2 of 9 Downloaded on : Fri Sep 29 20:36:08 IST 2023
NEUTRAL CITATION R/CR.MA/17458/2018 ORDER DATED: 25/09/2023 undefined that the respondent no.2 created the partnership firm in the name of Shreejikrupa Construction Company overnight and thereafter has deposited the said cheques in connivance with other directors of the company. He submitted that from September, 2016, the company in which the applicant is a director, i.e. Riddhi Siddhi Cotspin Pvt.Ltd. Has been classified as NPA for which the bank had issued public advertisement cautioning the public at large about the said aspect and the said company has not entered into any transaction with anyone after the said date and though the said fact was known to the respondent no.2, the respondent no.2 has misused the cheque in question with the help of Shri Dhirajlal Viradiya and others for pressurizing father of the applicant as he has filed an FIR against them. He, therefore, submitted that these applications be allowed and the impugned complaints be quashed and set aside.
5. 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 perfectly justified.
6. Learned advocate Mr.Rajyaguru for respondent no.2-complainant has submitted that the cheques are issued by the applicant, they bear the signature of the applicant, Page 3 of 9 Downloaded on : Fri Sep 29 20:36:08 IST 2023 NEUTRAL CITATION R/CR.MA/17458/2018 ORDER DATED: 25/09/2023 undefined the applicant is the director of the company from which account the cheque is issued. He, therefore, submitted that the ingredients of Section 138 of the NI Act are, prima facie, satisfied and therefore, this Court may dismiss these applications.
6. I have considered the rival submissions and perused the material on record.
7. At the outset, the provision of Section 138 of the NI Act is 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 with imprisonment for "a term which may extend to two Page 4 of 9 Downloaded on : Fri Sep 29 20:36:08 IST 2023 NEUTRAL CITATION R/CR.MA/17458/2018 ORDER DATED: 25/09/2023 undefined 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 in due 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."
8. In view of the above provision, if the facts of the present case are perused, the averments made in the applications and the submissions made by learned advocate for the applicant as noted hereinabove are all in the form of defence. Prima facie, the ingredients of Section 138 of NI Act are made out. The signature is not disputed, the amount is Page 5 of 9 Downloaded on : Fri Sep 29 20:36:08 IST 2023 NEUTRAL CITATION R/CR.MA/17458/2018 ORDER DATED: 25/09/2023 undefined not paid is not disputed. The cheque is stolen, it is misused, whether it is given against any legally enforceable debt, in what capacity the cheque is issued are all disputed facts, which needs to be tested at trial. The contentions put forward by the learned advocate for the applicant that the cheques were taken forcibly, the complaints are filed for the same and thereafter the cheques were deposited by creating a partnership firm overnight, are all points to be tested by a full fledged trial. This Court, at this stage of quashing of the complaints, has to take whether prima facie, the ingredients of Section 138 of the NI Act are satisfied, which in my opinion, on perusal of the cheques in question and the papers on record, are satisfied. 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.
9. At this stage, it is also fruitful to refer to the judgment rendered by the Hon'ble Apex Court in the case of Raj Kumar Khurana V/s State of (NCT of Delhi) and Another, reported in (2009)6 SCC 72, the head note of which reads as under:
"A.Negotiable Instruments Act, 1881 - S.138 - Cheque Page 6 of 9 Downloaded on : Fri Sep 29 20:36:08 IST 2023 NEUTRAL CITATION R/CR.MA/17458/2018 ORDER DATED: 25/09/2023 undefined dishonoured as cheque reported as lost - Whether constitutes an offence under S.138 - Held, S.138 creates a legal fiction of deemed commission of offence when a cheque is dishonoured either due to insufficiency of funds or the amount mentioned in the cheque exceeds the amount arranged to be paid from a particular account by an agreement with the bank - The fiction does not extend to lost cheque - Hence dishonour of cheque on this ground does not constitute an offence under S.138 - Interpretation of Statutes - Particular statutes and provisions - Penal provisions - penal provision creating legal fiction, held, must receive strict construction."
10. 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 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 Page 7 of 9 Downloaded on : Fri Sep 29 20:36:08 IST 2023 NEUTRAL CITATION R/CR.MA/17458/2018 ORDER DATED: 25/09/2023 undefined 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."
11. 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 circumstances of the present case and considering that the averments and submissions made are in the form of defence and that disputed questions are 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 Page 8 of 9 Downloaded on : Fri Sep 29 20:36:08 IST 2023 NEUTRAL CITATION R/CR.MA/17458/2018 ORDER DATED: 25/09/2023 undefined exercise the inherent powers under Section 482 of the Code and quash the impugned complaint. 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 Criminal Cases in accordance with law.
12. Resultantly, these applications are dismissed.
(SANDEEP N. BHATT,J) SRILATHA Page 9 of 9 Downloaded on : Fri Sep 29 20:36:08 IST 2023