Allahabad High Court
M/S. Ganesh Anhydride Ltd. And ... vs Addl. Chief Judicial Magistrate ... on 3 July, 2019
Bench: Sudhir Agarwal
HIGH COURT OF JUDICATURE AT ALLAHABAD
AFR
Reserved on 23.04.2019
Delivered on 03.07.2019
Court No. - 34
Case :- APPLICATION U/S 482 No. - 14529 of 2004
Applicant :- M/S. Ganesh Anhydride Ltd. And Others
Opposite Party :- Addl. Chief Judicial Magistrate And Another
Counsel for Applicant :- Vijai Prakash
Counsel for Opposite Party :- A.G.A.,Vipin Saxena
Hon'ble Sudhir Agarwal,J.
1. This application under Section 482 Cr.P.C. has been filed by M/s Ganesh Anhydride Ltd. and nine others with a prayer to quash Complaint Case No. 805 of 2004 pending in the Court of Additional Chief Judicial Magistrate, Ghaziabad under Sections 138, 141, 142 of Negotiable Instruments Act, 1981 (hereinafter referred to as "Act, 1981") read with Section 420 IPC and also to set aside summoning order dated 21.03.2002 as also bailable warrant dated 14.12.2004.
2. Facts in brief giving rise to present application are that M/s Morgan Securities and Credit Pvt. Ltd. (hereinafter referred to as "Complainant") has its registered office at 53, Friends Colony, East, New Delhi. It is a Company incorporated under the provisions of Companies Act, 1956 (hereinafter referred to as "Act, 1956"). Similarly, applicant-M/s Ganesh Anhydride Ltd. (hereinafter referred to as "Accused-1") is also a Company registered and incorporated under the provisions of Act, 1956 and Accused-2 to 10 are Managing Director, Directors and other persons, incharge, and responsible for conduct of business of Accused-1. Accused-3, Ramesh Pilani, approached Complainant for financial assistance to meet working capital requirement of Accused-1 by way of Inter Corporate Deposit (hereinafter referred to as "ICD") Facility for an aggregate amount of Rs. 100 lacs, in one or more trenches, with a promise that Accused-1 stood guarantor and repay the money/ amount taken from Complainant as per the agreement executed between parties. Deed of Corporate Guarantee was executed on 07.03.2000 between Accused-1 and Complainant. Complainant-Company placed two ICD each of Rs. 50 lacs dated 14.02.2000 for a period of 91 days and dated 07.03.2000 for a period of 90 days. ICD of Rs. 50 lacks placed on 14.02.2000 was repaid to Complainant but ICD placed on 07.03.2000 due for repayment on 05.06.2000 remained unpaid. Notices and reminders were given by Complainant. As per agreement (Corporate Guarantee Agreement) Accused-1 had undertaken to make payment without delay, demur or protest on first demand of the payment of any or all of the obligations that may become payable at any point of time, if borrower, i.e., Accused-1 refuses, defaults, denied, disputes or fails to pay the lender. After giving credit on account of sale of shares pledged to Complainant, a sum of Rs. 37,95,055/- was due on 31.12.2001 in respect whereof arbitration proceedings were initiated. Accused-1 issued a Cheque No. 713308 for a sum of Rs. 1 crore drawn on State Bank of India, Commercial Branch, Mumbai in favour of Complainant as a further security for realization of loan amount. Notice was given by Complainant on several occasions and lastly on 10.11.2001 to repay outstanding due else Complainant shall be compelled to proceed to present Cheque dated 05.12.2001 given for Rs. 1 crore by Accused-1. Ultimately Complainant presented aforesaid cheque for realization to its Banker but it was dishonoured with Bank's remark "insufficient fund". It is said that this is a violation of provisions of Section 138 of Act, 1981 and consequently complaint was filed. Magistrate taken cognizance of matter, issued summons and this has been challenged before this Court.
3. Sri Vijai Prakash, learned counsel appearing for applicants submitted that there was no legally enforceable debt or liability and, therefore, complaint under Section 138 of Act, 1981 was not maintainable. He placed reliance on Supreme Court's decision in Indus Airways Pvt. Ltd. and others vs. Magnum Aviation Pvt. Ltd. and another, 2014(12) SCC 539 and Sampelly Satyanarayana Rao vs. Indian Renewable Energy Development Agency Ltd., 2016(10) SCC 458. He submitted that as per the own case set up by Complainant, outstanding dues upto 31.12.2001 was Rs. 37,95,055/- but Complainant presented the cheque of Rs. 1 crore which was given as a guarantee and larger amount was not a "debt due" or "liability" for discharge, hence even if the cheque was dishonoured no proceedings under Section 138 could have been initiated against applicants.
4. From the facts discussed above it is evident that ICD of Rs. 1 crore under the agreement was given by Complainant through two transactions of Rs. 50 lacs each. There was a default on the part of accused. For ensuring payment of outstanding dues in case of any default there was an agreement between parties to realize the same through cheque of Rs. 1 crore given by Accused-1 to Complainant as a Corporate Guarantor. It is true that outstanding dues were about 30 lacs and odd but since only one cheque of Rs. 1 crore was given by Accused-1, Complainant had no occasion as also option to present any other cheque except the aforesaid one.
5. The fact remains that cheque included the amount of Rs. 30 lacs and odd which admittedly can be termed as "due debt" or "liability" for discharge thereof the said cheque was utilized. If Accused-1 had given cheque of a higher amount, it could have been utilized by Drawer for realization of outstanding dues, i.e., for discharge of debt or liability and the mere fact that cheque contains higher amount, will not dilute the liability of drawee to the extent of amount which was for discharge of "due debt" or "liability" stood dishonoured.
6. Therefore, outrightly it cannot be said that non encashment of cheque to the extent it was for discharge of due debt and liability would not come within the purview of Section 138 of Act, 1981 and hence contention that entire proceedings are illegal and without jurisdiction cannot be accepted.
7. In the two judgments relied by applicants there was a clear case of advance payment of which there was no supply since contract frustrated for one or the other reason hence Court held that a cheque issued as advance payment, unless liability or debt has accrued, cannot be construed to have been issued for discharge of any debt and liability. The facts of present case are different, hence both authorities are not applicable to present case.
8. In the circumstances, I find no merit in this application. Dismissed accordingly. Interim order, if any, stands vacated.
Order Date :-03.07.2019
AK
