M.K. Sagar vs State Of U.P And Another
2019 Latest Caselaw 3665 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.	
 
	Judgement Reserved on 15.03.2019
 
                               Judgement Delivered on 29.04.2019
 

 
In Chamber
 
Case :- APPLICATION U/S 482 No. - 11711 of 2005
 
Applicant :- M.K. Sagar
 
Opposite Party :- State Of U.P And Another
 
Counsel for Applicant :- Amit Misra,Viresh Misra
 
Counsel for Opposite Party :- Govt. Advocate,Dharam Veer Singh,V.K.Rai
 

 
Hon'ble Dinesh Kumar Singh-I,J.

1. This application under Section 482 Cr.P.C. has been moved with a prayer to quash the entire proceedings arising out of Complaint Case No. 1762 of 2003 under Section 138 N.I. Act, District, Agra.

2. In brief, the facts of the case are that one complaint was filed before the Court of A.C.J.M.-IX, Agra by O.P. No.2, Smt. Mohini Malik against one Sunil Chopra and Sri M.K. Sagar under Section 402, 406 I.P.C. and Section 138 N.I. Act, P.S. Sikandra, Agra in which it was alleged that her son, Rahul had started a business with accused no.1, Sunil Chopra to run a restaurant in which she had given Rs. 2,50,000/- by way of draft as security to accused no.2, M.K. Sagar ( present applicant). The accused no.1 later on terminated the partnership with the son of O.P. No.2/complainant on 1.04.2002 and in lieu of that, accused no.1 entered into a written agreement that he would return the said amount i.e. Rs. 2,50,000/- by way of account payee cheques 1 to 13 nos. being 255835 to 255847 of different dates which were issued on different dates i.e. from 28.05.2002 to 28.05.2003. It is further alleged that both accused were colluding with each-other and, therefore, when she deposited cheque no. 255853 dated 28.05.2002 of an amount of Rs. 21,666/- in her account, the same was dishonoured due to lack of amount. When the said cheque was returned on 18.06.2002, she got notices sent to both the accused which they deliberately refused to receive. Thereafter, O.P. No.2 again deposited cheque nos. 255836, 255837 and 255838 in her account on 20.09.2002 expecting that they would be honoured but on 20.09.2002, they were again returned dishonoured due to lack of amount in the account. Again the O.P. No.2 sent notices to the accused persons through her advocate which was again deliberately refused to receive and returned to the O.P. No.2 in October, 2002, hence, she moved the present complaint to get the said accused summoned under Section 138 N.I. Act and under Sections 406 and 420 of I.P.C. The trial court after having examined the O.P. No.2 under Section 200 Cr.P.C., her son, Rahul under Section 202 Cr.P.C. and one Narendra Kumar under Section 202 Cr.P.C., summoned both the accused, i.e. Sunil Chopra and M.K. Sagar (applicant) to face trial under Section 138 N.I. Act. It is this order which has been challenged before this Court on the ground that the applicant had nothing to do with the present case. It is further stated that M/s Sagar was a private limited company, whose directors were Pradeep Kumar Sagar and Rajiv Sagar, photocopy of form no.32 is annexed as annexure no. 1. The said company had a fully equipped restaurant by the name of Mr. Cook. For the purpose of catering, M/s Sagar and Sagar Private Limited gave an advertisement and in response to that M/s Jahanvi Caterers contacted M/s Sagar and Sagar and an agreement was made between them on 4.11.2001 whereby M/s Jahanvi Caterers was appointed as restaurant contractors for the preparation and supply of food-stuff at Restaurant, Mr. Cook (Unit of M/s Sagar), the agreement dated 4.10.2001 is annexed as annexure 2. It is further mentioned that clause 13 of the said agreement would indicate that initially the agreement was valid for a period of two years from the date of its coming into force and could not renewed for the period of five years after the expiry of initial period of two years. As per clause 28 and 29 of the said agreement, the Jahanvi Caterers were to deposit in cash or by paying interest free security an amount of Rs. 2,50,000/- which was to be refunded to Jahanvi Caterers at the expiry of present agreement after deduction of dues, if any. It was also in the terms and conditions of that contract that during currency of this, if Caterers wish to dissolve this agreement, they could do so by paying 21% on the basis of sale which works out to Rs. 6,500/- per day to M/s Sagar and Sagar for the remaining period of contract for two years. It is further mentioned that M/s Jahanvi Caterers is a partnership firm consisting of two partners i.e. Rahul Malik S/o O.P. No. 2 and Sunil Chopra, the applicant had absolutely nothing to do with the said partnership. The partnership deed is annexed as annexure-3. Further it is mentioned that Jahanvi Caterers abandoned the restaurant on 9.09.2002 and, hence, the amount of penalty due to non functioning of the restaurant became due as per the agreement, for a sum of Rs. 4,44,990/- + other charges and the total sum which became due was Rs. 5,33,039/- from Jahanvi Caterers and M/s Sagar vide letter dated 19.11.2002 demanded the said amount from Jahanvi Caterers. It is further mentioned that after this demand was made, with malafide intention, with a view to not to paying this amount, mother of Rahul Malik i.e. O.P. No.2 filed the complaint against the applicant and one Sunil Chopra under Section 420 I.P.C. and 138 N.I. Act which is annexed as annexure-5 wherein on statement of complainant i.e. O.P. No.2 under Section 200 Cr.P.C. and that of Rahul Malik and Narendra Kumar under Section 202 Cr.P.C. which are annexed as annexure-6, the magistrate summoned the applicant vide order dated 13.02.2003. It is further mentioned that the applicant had no knowledge or information about filing of such complaint and issuance of process against him rather came to know about this only when N.B.W. was issued against him whereafter he made inquiries and came to know that the partnership firm M/s Jahanvi Caterers was dissolved as Rahul Malik decided to retire from the firm at his will and the continuing partner i.e. Sunil Chopra undertook all the liabilities/assets on behalf of firms. The retiring partner was entitled to get back the amount of security which was furnished with M/s Jahanvi Caterers on instalment basis of Rs. 20,000/- per month together with interest. In this consideration, Sunil Chopra, other accused issued cheques to Rahul Malik (son of O.P. No.2) dissolving deed of partnership dated 5.04.2002 which is annexed as annexure-8. It is further mentioned that after the dissolution of the partnership, the declaration was made by Sunil Chopra to the effect that he was responsible to pay Rs. 2,50,000/- to Smt. Mohini Malik (wife of D.K. Malik), O.P. No.2 through retiring partner (her son) with interest as mentioned in the deed as a result of which, 13 post dated cheques were issued from the Account No. 9859 of Syndicate Bank in favour of Smt. Mohini Malik, the details of the cheques as mentioned in the declaration are annexed as annexure no.9. It is further mentioned that the applicant was in no way liable as he was not connected with partnership of M/s Jahanvi Caterers or its dissolution and the terms and conditions of the agreement negotiated and settled between the two partners. He was neither the applicant nor the party to the agreement dated 4.10.2001 between M/s Jahanvi Caterers and M/s Sagar & Sagar nor any cheque was issued by the applicant to O.P. No.2. The alleged cheques have been issued by Sri Sunil Chopra in pursuance of the declaration made earlier on 29.04.2002, therefore, liability, if any, to pay the amount of said cheque is that of Sri Sunil Chopra and not of applicant. Additionally it was also mentioned that the complaint would go to show that a cheque was deposited in bank on 28.05.2002 for which a notice was purported to have been issued on 18.06.2002 through counsel by O.P. No.2. It is further mentioned that allegedly the cheques were again deposited in the bank on 20.09.2002 and they were returned to O.P. No.2 but no date of notice has been mentioned in para 4 of the complaint, however, the complaint was filed on 28.11.2002 much after the period of limitation provided under Section 138 of N.I. Act. As a matter of fact, the notice was sent on 25.09.2002, true copies of which was annexed as annexure-10, therefore, it was also argued that O.P. No.2 had not discharged her preliminary burden under N.I. Act. Learned Magistrate has failed to consider that there was no allegation against the applicant in complaint or the statement made. Further it is mentioned that the clause 10 of the agreement would show that in case of any dispute, the parties or their representatives were to have the matter referred to the arbitrators as per Arbitration Law that too in Delhi Courts. It is further stated that a Revision was preferred agaisnt the said judgement before the Sessions Judge, Agra against the summoning order passed by the Magistrate but the same was dismissed on 26.07.2005 on the ground that it was not maintainable in view of Supreme Court decision in which it was observed that against issuance of process under Section 204 Cr.P.C., a petition under Section 482 Cr.P.C. would lie before the High Court. Copy of the said order is annexed as annexure-11. It is further mentioned that no notice under Section 138 N.I. Act was served upon the applicant prior to filing the complaint, hence the present Criminal proceedings are nothing but an abuse of process of court against the applicant.

3. O.P. No.2 has filed counter-affidavit wherein she has stated that her son, Rahul Malik was carrying business of restaurant after entering an agreement with Sunil Chopra and for the purpose of security, an amount of Rs. 2,50,000/- was given by her by draft drawn in favour of M/s Sagar and Sagar. The aforesaid partnership between Sunil Chopra and son of the complaint was dissolved on 1.04.2002 and as per the terms and conditions of the dissolution deed, the security amount of Rs. 2,50,000/- was liable to be returned with interest and in order to enable the same, the aforesaid draft of Rs. 2,50,000/- was handed over to M/s Sagar (applicant) who was real owner of the restaurant of Mr. Cook. His one son, Pradeep Sagar was director of Sagar and Sagar company on paper but all working of the firm as well as restaurant was being carried out by applicant. It is further mentioned that Sunil Chopra was one of the associates of applicant and in order to cheat the complainant, they had entered into a criminal conspiracy in furtherance of which, they had induced the complaint to give Rs. 2,50,000/- as security. Sunil Chopra being one of the associates of M.K. Sagar in pursuance of Criminal Conspiracy issued cheques, details of which have been mentioned in para-5 of the counter-affidavit. It is further mentioned that complainant deposited cheque no. 255835 dated 28.05.2002 of Rs. 21,666/- in her account in Bank of India, Sadar Bazar, Agra which was dishonoured by the bank with an endorsement of insufficient amount whereafter the complainant through her counsel gave a notice dated 18.06.2002 to the accused. Thereafter, cheque nos. 255836, 255837 and 255838 also deposited in the said bank but all the cheques were dishonoured on 20.09.2002 with the same endorsement of insufficient funds and, thereafter again, notice was given to the accused in the month of October, 2002 which was deliberately not received. Thereafter, the complainant initiated proceedings under Section 138 of N.I. Act and Section 420 and 406 I.P.C. by getting case registered as no. being 1762 of 2003, hence, there was no infirmity in the impugned summoning order passed against the applicant.

4. The main argument made by learned Senior Counsel Viresh Mishra assisted by Sri S.K. Dubey that the cheques which are stated to have been dishonoured were never issued by the applicant nor did he have anything to do with M/s Sagar and Sagar and Jahanvi Caterers, therefore, he could not be made an accused in the present case under Section 138 N.I. Act. Further it was argued for multiple cheques allegedly issued by the co-accused, the applicant has been made an accused by the trial court illegally as for dishonour of each cheque, a separate proceeding were required to be initiated as and when the same had got dishonoured which is not the case here and, therefore, the entire proceedings initiated against him need to be quashed as they are nothing but an abuse of process of law and Court. 

5. After having heard both the sides, I find that there is some substance in the argument of learned counsel for the applicant.

6. It would be appropriate to refer here to the necessary ingredients of Section 138 N.I. Act which are as follows:-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 be extended to two years], 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 cheque 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 purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.

7. Further Section 142 of N.I. Act lays down as follows:-

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:

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, is situated; or

(b) if the cheque is presented for payment by 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.

8. The above sections have been interpreted by the Hon'ble Supreme Court in Aparna A. Shah Vs. Seth Developers A.I.R.  (2013) S.C. 3210 in which following ingredients are held to be necessary to be fulfilled for constituting an offence under Section 138 N.I. Act:

"(i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account;

(ii) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability;

(iii) that 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;

(iv) that cheque is returned by the bank unpaid, either because of the amount of money standing to the credit of the 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 the bank;

(v) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid;

(vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice.

Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act." 

9. It is apparent from the above interpretation made by the Hon'ble Apex Court that the offence under Section 138 N.I. Act shall be treated to have been committed only by a person who has actually drawn the cheque. In the case at hand, the main argument of the learned counsel for the applicant is that the cheque was not drawn by him rather the same was drawn by co-accused, Sunil Chopra with whom the son of O.P. No.2 was having partnership to run a business of supply food to the concerned, M/s Sagar and Sagar. The applicant was not any director even of that firm as is evident from the form no. 32 annexed by him, therefore, it does not appear that the applicant was having anything to do either with M/s Sagar and Sagar or with Jahanvi Caterers although the allegation made by the O.P. No.2 is that the actual person conducting the business of M/s Sagar and Sagar etc. was the applicant. On the basis of documents, it does not stand prima-facie proved by the complainant/O.P. No.2 that accused applicant had issued a cheque nor that he had anything to do with the business transactions in which the alleged amount of Rs. 2,50,000/- was paid by O.P. No.2 in order to establish the business of her son, therefore, it appears that the impugned order summoning the accused applicant was erroneous. Further it would be in the fitness of things to say that  had the trial court summoned the accused applicant for offences under other sections such as Section 420 and 406 I.P.C. for which the complaint was moved, the position would have different particularly in view of the fact that if the court had found that there was some role of the accused applicant of any kind of cheating which is being alleged to have been done with O.P. No.2, the said accused could have been summoned but that is not the case here as trial court has itself summoned the accused applicant only under Section 138 N.I. Act which offence could be made out only against the person who had issued the cheque and in the case at hand, the cheques in question were issued by co-accused, Sunil Chopra, hence, the proceedings against applicant are found to be nothing but abuse of process of Court which needs to be quashed.

10. In view of above analysis, I am not inclined to get into the other arguments which are made that dishonouring of multiple cheques required separate filing of cases having separate causes of action etc. nor with respect to sufficiency of service of notice upon the applicant as I find that simply because the applicant not being the person who has signed the cheques in question, he could not be made accused in the present case.

11. Hence, this application under Section 482 Cr.P.C. is allowed as against applicant and the proceedings against him stands quashed.

Order Date:- 29.04.2019

A.Mandhani