Gujarat High Court
Sabu Vayal Mutteathu Varghese vs State Of Gujarat on 6 February, 2025
NEUTRAL CITATION
R/SCR.A/12926/2024 ORDER DATED: 06/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 12926 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12929 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12933 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12935 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12939 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12940 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12941 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12948 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12949 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12966 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12969 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12970 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12971 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12972 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12974 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12975 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 12976 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 13030 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 13105 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 13107 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 13108 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 13109 of 2024
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Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025
NEUTRAL CITATION
R/SCR.A/12926/2024 ORDER DATED: 06/02/2025
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R/SPECIAL CRIMINAL APPLICATION NO. 13111 of 2024
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R/SPECIAL CRIMINAL APPLICATION NO. 13112 of 2024
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SABU VAYAL MUTTEATHU VARGHESE
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR. VIPUL B SUNDESHA(6689) for the Applicant(s) No. 1
NOTICE SERVED for the Respondent(s) No. 2
MS MAITHILI MEHTA, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 06/02/2025
COMMON ORAL ORDER
1. All these petitions are filed under Articles 226 and 227 of the Constitution of India read with Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (`BNSS' for short) for quashing and setting aside the complaints being Criminal Case Nos.524/2019, 61/2019, 520/2019, 519/2019, 69/2019, 59/2019, 68/2019, 521/2019, 60/2019, 63/2019, 526/2019, 73/2019, 522/2019, 77/2019, 525/2019, 62/2019, 528/2019, 64/2019, 65/2019, 66/2019, 527/2019, 518/2019, 79/2019 and 523/2019, respectively, pending before the learned Additional Chief Judicial Magistrate, Bardoli-Surat 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 petitions, the company is same and the Page 2 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025 NEUTRAL CITATION R/SCR.A/12926/2024 ORDER DATED: 06/02/2025 undefined director is the same, 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 Ms.Mehta waives service of notice of rule for respondent no.1. Though served, none appears for respondent no.2-complainant.
4. For the sake of convenience, the facts of Special Criminal Application No.12926 of 2024 are considered, as stated in the petition, which are as under:
4.1 It is averred in the petition that respondent no.2-
complainant has filed the complaint inter alia stating that the complainant is proprietorship firm and doing business of plywood; that the accused approached the complainant- company for sale of various size of plywood and as per the request of the accused, the complainant sold goods-plywood and the goods were delivered from time to time to the accused; that as a capacity of director of the company, the accused no.2 issued the cheque, which was presented for payment, however, it was dishonoured with an endorsement `payment stop by drawer'; therefore, the respondent no.2 issued a statutory demand notice under Section 138(B) of the NI Act against all accused persons and it was served to Page 3 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025 NEUTRAL CITATION R/SCR.A/12926/2024 ORDER DATED: 06/02/2025 undefined accused nos. 1 to 3 and present applicant refused to accept the notice and as the amount was not paid by the accused persons, the impugned complaint was filed under the provisions of Section 138 of the NI Act, which is prayed to be quashed by way of these petitions.
5. Heard learned advocates for the parties. 5.1 Learned advocate for the petitioners submitted that on 11.9.2007, a company namely Opal Asia (India) Private Limited came to be incorporated under the Companies Act for purpose of running the different businesses i.e. shipping, import-export and others; that the applicant joined the company as Director with effect from 1.8.2014 and on 16.12.2016, the applicant resigned and retired from the directorship of the said company; that the cheques in question were issued much after his resignation and therefore, the applicant is not responsible to be prosecuted for the cheque issued on behalf of the company after the resignation as director and therefore the present petitions are filed for quashing of the impugned criminal cases. 5.2 In support of his submissions, learned advocate for the petitioner has relied on the following citations: Page 4 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025
NEUTRAL CITATION R/SCR.A/12926/2024 ORDER DATED: 06/02/2025 undefined (1) Adhiraj Singh V/s Yograj Singh and Others decided on 2.12.2024 in S.L.P.(Cri.) Nos.16051-16052 of 2023.
(2) Rajesh Viren Shah V/s Redington (India) Limited decided on 14.2.2024 in Special Leave Petition (Cri.) No.6905 of 2022.
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 perfectly justified.
7. Though served, none appears for the respondent no.2-complainant.
8. I have considered the submissions made at the bar and perused the material on record.
9. 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 maintained by him with a banker for payment of any amount of money to another person from out of that account Page 5 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025 NEUTRAL CITATION R/SCR.A/12926/2024 ORDER DATED: 06/02/2025 undefined 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 be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.Page 6 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025
NEUTRAL CITATION R/SCR.A/12926/2024 ORDER DATED: 06/02/2025 undefined 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 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 Page 7 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025 NEUTRAL CITATION R/SCR.A/12926/2024 ORDER DATED: 06/02/2025 undefined 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,
(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."
10. In the present case, the statutory notice issued by the complainant was served on the accused nos.1 to 3 and it was was refused by the applicant-accused no.4 and therefore no reply is given to the same. The complainant filed the impugned complaints thereafter and summons was issued by the learned trial Court, where the applicant appeared. When the notice was issued to the petitioner, he refused to accept the same and he did not give reply to the same. He could have filed reply to the statutory notice itself and could have pointed out all these facts at the notice stage itself as a foundation, which he is stating at this stage. A bald statement at this stage would not help the petitioner to come out of the allegations in the criminal case. The same has to be proved by leading unimpeachable and uncontrovertible Page 8 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025 NEUTRAL CITATION R/SCR.A/12926/2024 ORDER DATED: 06/02/2025 undefined evidence, for which, full-fledged trial is required. Without testing the defence in a full-fledged trial, quashing of the criminal cases at this stage would not be just and proper and, therefore, this Court cannot exercise the powers under Section 528 of the BNSS, 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 44 to 46, which read as under:
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 Page 9 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025 NEUTRAL CITATION R/SCR.A/12926/2024 ORDER DATED: 06/02/2025 undefined 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 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.
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 made in the complaint and that he is really not concerned Page 10 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025 NEUTRAL CITATION R/SCR.A/12926/2024 ORDER DATED: 06/02/2025 undefined 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."
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 considering that no reply to notice under Section 138 of the NI Act was given by the applicant 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 528 of the BNSS and quash the impugned complaints. Let the trial Page 11 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025 NEUTRAL CITATION R/SCR.A/12926/2024 ORDER DATED: 06/02/2025 undefined Court decide all the 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.
15. Resultantly, all these petitions are dismissed. Notice/Rule is discharged. Interim relief, if any, stands vacated.
(SANDEEP N. BHATT,J) SRILATHA Page 12 of 12 Uploaded by U. SRILATHA(HC00185) on Fri Feb 07 2025 Downloaded on : Sat Feb 08 02:20:44 IST 2025