M/S Kamal Enterprises vs State Of U.P. And Another
2023 Latest Caselaw 14789 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?Neutral Citation No. - 2023:AHC:102371
 
Court No. - 68
 

 
Case :- APPLICATION U/S 482 No. - 12410 of 2023
 

 
Applicant :- M/S Kamal Enterprises and another
 
Opposite Party :- State of U.P. and Another
 
Counsel for Applicant :- Gulab Chandra,Rupesh Kumar Singh
 
Counsel for Opposite Party :- G.A.
 

 
Hon'ble Mrs. Manju Rani Chauhan,J.

1. Heard Mr. Gulab Chandra, learned counsel for the applicant, Mr. K.P. Pathak, learned AGA for the State and perused the records.

2. The present application under Section 482 Cr.P.C. has been filed to quash the summoning order dated 20.12.2022 as well as the entire proceedings of Complaint Case No.19750 of 2022(M/s A.K. Constructions vs. M/s Kamal Enterprises and another), under Section 138 of Negotiable Instruments Act, 1881, pending in the Court of Civil Judge (Junior Division)/Judicial Magistrate, Court No.10, Varanasi.

3. Brief facts of the case are that:-

i) The opposite party no.2 filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act') against the applicants stating therein that the opposite party no.2 is a registered partnership firm having a business of developer, contractor and sub-constructor with the name and style of M/s A.K. Constructions Company. The applicant no.2 is proprietor of Firm known as M/s Kamal Enterprises having a business of registered BMC Contractor. In the year 2019, the applicants had entered into three "MOUs" (MEMORANDUM OF UNDERSTANDING) dated 15.03.2019, 13.09.2019 and 13.09.2019 with the opposite party no.2 and as per the terms and conditions of the aforesaid MOUs, the opposite party no.2 had to provide a financial assistance of Rs.9,00,00,000/- to the applicants for the works mentioned in the said MOUs, but the opposite party no.2 had paid Rs.9,94,00,000/- to the applicants' firm through R.T.G.S. in its account nos. 002613100000212 (Bharat Co. Opp. Bank) and 016820110000430 (Bank of India) on different dates and Rs.21,00,000/- in cash, instead of Rs.9,00,00,000/-, which was excess to the amount required under the said MOUs as financial assistance. For the excess amount paid by the opposite party no.2 to the applicants, they had issued several post dated cheques including the cheques Nos.606564, 932975 and 932976 as a security with an assurance that when the aforesaid amount becomes due, the cheques would be presented for encashment.

ii) The aforesaid amount falls due in the month of September, 2021 but the same has not been returned by the applicants to the opposite party no.2 in any manner, therefore, the opposite party no.2 has presented the said cheques, i.e. (i) Cheuqe No.606564 dated 09.05.2022 amounting to Rs.10,00,000/- (ii) Cheque No.932975 dated 10.05.2022 amounting to Rs.10,00,000/- and (iii) Cheque No.932976 dated 10.05.2022 amounting to Rs.10,00,000/- before the concerned Bank for encashment, but the same was dishonoured due to "payment stopped by the drawer" on 23.06.2022. Thereafter, opposite party no.2 sent a legal notice to the applicants on 21.07.2022 through registered post, which has been served upon the applicants on 25.07.2022. After the notice neither any amount was paid nor reply was submitted by the applicants, therefore, the present compliant has been filed on 30.08.2022. Subsequently, the learned Magistrate after recording the statement under Sections 200 and 202 Cr.P.C. summoned the applicants vide order dated 20.12.2022, under Section 138 of the Act.

4. Learned counsel for the applicants submits that the applicants is innocent and has been falsely implicated in the present case. Relying upon the judgment of Apex Court in the case of Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel & Anr. reported in (2023) 1 SCC 578, learned counsel for the applicants submits that there was no debt or liability at the time of presentation of cheques, therefore, no offence under Section 138 N.I. Act is made out against the applicant. He further submits that when a part payment of the debt is made after the cheque was drawn but before the cheque is encashed, such payment must be endorsed on the cheque as prescribed under Section 56 of the N.I. Act. He further submits that the present case has been instituted with mala fide intentions, in order to harass and extract money from the applicant. Thus, the summoning order as well as the entire proceedings is liable to be quashed.

5. On the other hand, Mr. K.P. Pathak, learned AGA for the State, has submitted that the summoning order passed by the concerned Magistrate is legal and just in the eyes of the law and at this stage, only a prima facie case is to be seen and the complaint cannot be thrown at the threshold. He further submits that the judgment relied by the counsel for the applicants is not applicable in the present case as the legal notice was issued for the amount of Rs.30,00,000/- towards debt or liablity, which exists as per the MOUs entered into between the parties. He further submits that an amount of Rs.94 crores was given for assistance to the applicants by the opposite party no.2, which was to be returned as per the terms and conditions mentioned in the MOUs. When part of the amount was not returned, therefore, a legal notice was issued and after the aforesaid notice was received by the applicants, neither any payment was made nor any reply was submitted, therefore, the present complaint was filed. Hence, the present application is liable to be dismissed.

6. I have carefully considered the submissions advanced by learned counsel for the parties and have also gone through the material available on record.

7. Before proceedings further, it is apposite to give reference of some judgments of the Apex Court as well as this Court, wherein the Apex Court has laid down the guideline for quashing of criminal proceedings arising out of Section 138 of N.I. Act, which are as follows:-

i) C.C. Alavi Haji Vs. Palapetty Muhammed and Another, reported in (2007) 6 SCC 555;

ii) Ajeet Seeds Ltd. vs. K. Gopala Krishnaiah, reported in 2014 12 SCC 685;

iii) Bharat Barrel & Drum Manufacturing Company Vs. Amin Chand Pyarelal, reported in (1999) 3 SCC 35;

iv) Basalingappa Vs. Mudibasappa reported in (2019) 5 SCC 418;

v) Kishan Rao Vs. Shankargouda, (2018) 8 SCC 165;

vi) Ranjit vs. State of U.P. and another decided on 31.01.2020 passed in Application U/s 482 No. 47282 of 2019.

8. In view of the settled legal position, as noticed above, it is clear that at this stage, only a prima facie case is to be seen and the complaint cannot be thrown at the threshold and all the submissions made by learned counsel for the applicant is disputed questions of fact. In the complaint itself it has been mentioned that the said cheque was issued in lieu of payment said to be made in regard to business transaction, therefore, the applicants being holder of cheque and the signature appended on the cheque having not been denied by the Bank, presumption shall be drawn that cheque was issued for the discharge of any debt or other liability. Therefore, when the facts have to be established by way of evidence, this Court while exercising the powers under section 482 of Cr.P.C., cannot interfere with such proceedings.

9. It is well settled that for the purpose of quashing of a complaint, the High Court cannot look into the defence of the accused. The Court is only required to see whether on the basis of the averments made in the complaint and the relevant particulars produced by the complainant, there are grounds for proceeding against the accused. Inherent power of quashing criminal proceedings U/s 482 Cr.P.C. should be exercised very sparingly and with great circumspection. It does not confer on the court to act arbitrarily as per its own whims and caprice. At this stage, the Courts could not have gone into the merits and reached a conclusion that there are no existing debt or liability and quash the complaint. Therefore, the basic law is that the complaint under Section 138 of Negotiable Instrument Act cannot be quashed by High Court by taking recourse to Section 482 Cr.P.C, if disputed questions of facts are involved which need to be adjudicated after respective evidence is led by the parties before the trial court

10. On the basis of discussions made herein above, this Court finds that there is no illegality or infirmity in the summoning order dated 20.12.2022 passed by the concerned court below. Therefore, the prayer for quashing the impugned summoning order as well as the entire proceedings of the aforesaid case are refused, as I do not see any abuse of the court's process at this pre-trial stage.

11. In view of the aforesaid, the application is, accordingly, dismissed.

Order Date :- 11.5.2023

Jitendra/-