Bombay High Court
Shri Praflla Purushottam Gadge vs Buldhana Urban Co-Op. Credit ... on 30 November, 2017
Bench: A.S. Chandurkar
apls145,180,181,182 &183.16
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
Criminal Application [APL] No. 145 of 2016
WITH
Criminal Application [APL] No. 180 of 2016
WITH
Criminal Application [APL] No. 181 of 2016
WITH
Criminal Application [APL] No. 182 of 2016
WITH
Criminal Application [APL] No. 183 of 2016
A. Criminal Application [APL] No. 145 of 2016 :
Shri Prafulla Purushottam Gadge,
aged about major,
occupation - Business,
resident of Dhantoli, Nagpur. ..... Applicant
Versus
Buldana Urban Co-operative Credit Society,
Ltd. Buldana (Multistate) bearing
Registration No.MSCS/CR/2672008 office at
Shankar Setu Hatatma Gore Path, Buldana
and Branch Office at Ramdaspeth Nagpur,
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apls145,180,181,182 &183.16
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through its duly authorized officer
Mr. Vishal S/o Sadanand Irshid, aged about
36 years,
resident of R/o Ramdaspeth Nagpur. ..... Non-applicant.
*****
Dr. Anjan De, Adv., for the Applicant.
Mr. G. S. Lahoti, Adv., for non-applicant.
*****
B. Criminal Application [APL] No. 180 of 2016 :
Shri Prafulla Purushottam Gadge,
aged about major,
occupation - Business,
resident of Dhantoli, Nagpur. ..... Applicant
Versus
Buldana Urban Co-operative Credit Society,
Ltd. Buldana (Multistate) bearing
Registration No.MSCS/CR/2672008 office at
Shankar Setu Hatatma Gore Path, Buldana
and Branch Office at Ramdaspeth Nagpur,
through its duly authorized officer
Mr. Vishal S/o Sadanand Irshid, aged about
36 years,
resident of R/o Ramdaspeth Nagpur. ..... Non-applicant.
*****
Dr. Anjan De, Adv., for the Applicant.
Mr. G. S. Lahoti, Adv., for non-applicant.
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apls145,180,181,182 &183.16
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*****
C. Criminal Application [APL] No. 181 of 2016 :
Shri Prafulla Purushottam Gadge,
aged about major,
occupation - Business,
resident of Dhantoli, Nagpur. ..... Applicant
Versus
Buldana Urban Co-operative Credit Society,
Ltd. Buldana (Multistate) bearing
Registration No.MSCS/CR/2672008 office at
Shankar Setu Hatatma Gore Path, Buldana
and Branch Office at Ramdaspeth Nagpur,
through its duly authorized officer
Mr. Vishal S/o Sadanand Irshid, aged about
36 years,
resident of R/o Ramdaspeth Nagpur. ..... Non-applicant.
*****
Dr. Anjan De, Adv., for the Applicant.
Mr. G. S. Lahoti, Adv., for non-applicant.
*****
D. Criminal Application [APL] No. 182 of 2016 :
Shri Prafulla Purushottam Gadge,
aged about major,
occupation - Business,
resident of Dhantoli, Nagpur. ..... Applicant
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apls145,180,181,182 &183.16
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Versus
Buldana Urban Co-operative Credit Society,
Ltd. Buldana (Multistate) bearing
Registration No.MSCS/CR/2672008 office at
Shankar Setu Hatatma Gore Path, Buldana
and Branch Office at Ramdaspeth Nagpur,
through its duly authorized officer
Mr. Vishal S/o Sadanand Irshid, aged about
36 years,
resident of R/o Ramdaspeth Nagpur. ..... Non-applicant.
*****
Dr. Anjan De, Adv., for the Applicant.
Mr. G. S. Lahoti, Adv., for non-applicant.
*****
E. Criminal Application [APL] No. 183 of 2016 :
Shri Prafulla Purushottam Gadge,
aged about major,
occupation - Business,
resident of Dhantoli, Nagpur. ..... Applicant
Versus
Buldana Urban Co-operative Credit Society,
Ltd. Buldana (Multistate) bearing
Registration No.MSCS/CR/2672008 office at
Shankar Setu Hatatma Gore Path, Buldana
and Branch Office at Ramdaspeth Nagpur,
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apls145,180,181,182 &183.16
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through its duly authorized officer
Mr. Vishal S/o Sadanand Irshid, aged about
36 years,
resident of R/o Ramdaspeth Nagpur. ..... Non-applicant.
*****
Dr. Anjan De, Adv., for the Applicant.
Mr. G. S. Lahoti, Adv., for non-applicant.
*****
CORAM : A.S. CHANDURKAR, J.
Date on which arguments
were concluded : 15th November, 2017
Date on which judgment
is pronounced : 30th November, 2017
J U D G M E N T:
01. Admit. Heard finally with consent of counsel for the parties.
02. All these applications filed under Section 482 of the Code of
Criminal Procedure, 1973 [for short, "the Code"] raise a challenge to
the order passed by the learned Judicial Magistrate First Class issuing
Process in the Complaints filed by the non-applicant herein under
Section 138 of the Negotiable Instruments Act, 1881 [for short, "the
apls145,180,181,182 &183.16
Act of 1881"]. The order issuing Process had been challenged before
the Sessions Court and the Revision Applications filed by the applicants
herein have been dismissed.
03. Facts in all the applications are almost similar. For sake of
convenience, the facts in Criminal Application [APL] No. 145 of 2016
are being referred to.
04. It is the case of the non-applicant-complainant that it is a
Society registered under the provisions of the Multi-State Co-operative
Societies Act, 2002 [for short, "the Act of 2002"]. The applicant -
accused was in need of financial assistance and hence had obtained
loan from the complainant. There being default in payment of the
amounts borrowed, the complainant filed arbitration proceedings
under Section 84 of the Act of 2002. An Award was passed by the
Arbitrator, after which the accused and the complainant executed an
agreement dated 26th March, 2012 by which the accused accepted the
liability to repay the borrowed amount. It was further agreed that the
accused would pay an amount of Rs. 46,00,000-00 by way of monthly
installments. A cheque drawn by the accused in favour of the
complainant was, however, dishonoured. The complainant, therefore,
followed the procedure prescribed under Chapter-XVII of the Act of
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1881 and thereafter filed Complaint under Section 138 of the Act of
1881. The learned Magistrate on 12th March, 2013 issued Process in
the Complaint.
05. The accused filed an application purportedly under Section
258 of the Code praying that the proceedings in the Complaint be
dropped in view of the fact that a remedy under Section 84 of the Act
of 2002 had been invoked and recovery proceedings in that regard
were pending. This application was rejected by the learned Magistrate
on the count that he had no jurisdiction to grant the prayer made in
the application. This order was challenged before the Sessions Court
which dismissed the Revision Application filed under Section 397 of the
Code. Being aggrieved, the present proceedings have been filed.
06. Dr. A. De, the learned counsel for the applicants in support
of the applications, submitted that the learned Magistrate had no
jurisdiction to entertain the complaint filed under Section 138 of the
Act of 1881. The complainant having invoked the remedy as provided
under Section 84 (1) of the Act of 2002 and the Arbitrator thereafter
having passed an Award, the only remedy available to the complainant
was to have the Award executed. As per Clause (E) of the Agreement
dated 26th March, 2012, the accused had issued a cheque. This
apls145,180,181,182 &183.16
payment was made in terms of the agreement entered into pursuant
to the Award passed by the Arbitrator. Failure to abide by the
agreement would amount to a dispute and as per provisions of Section
84 (1) of the Act of 2002, a dispute between a Multi-State Co-operative
Society and its member was required to be referred to arbitration.
Section 84(1) of the Act of 2002 started with non-obstante clause and,
therefore, the Act of 2002 having come into force after the provisions
of Chapter-XVII of the Act of 1881, were already in force said
provisions had an overriding effect over the provisions of Section 138
of the Act of 1881. It was submitted that the expression "any other
law for the time being in force" would include the Act of 1881 and,
therefore, the complaint as filed under said provision was not
maintainable. On this count, the order issuing Process was liable to be
quashed. Moreover, the remedy for breach of the Agreement dated
26th March, 2012 could be invoked and the present proceedings filed
under Section 138 of the Act, 1881 could not be utilized as a mode of
execution of that agreement. In support of his submissions, the
learned counsel placed reliance on the judgment of the Honourable
Supreme Court in Maktool Singh Vs State of Punjab [1999 (3) SCC
321].
07. Shri G. Lahoti, learned counsel for the complainant, opposed
apls145,180,181,182 &183.16
the aforesaid submissions and supported the order passed by the
learned Magistrate issuing Process. It was submitted that there was no
bar to file a Complaint under Section 138 of the Act, 1881 as the cause
of action for filing the same was independent of the proceedings under
Section 84 (1) of the Act of 2002. What was provided under Section
84 (1) of the Act of2002 is the reference of a dispute. Under Section
138 of the Act of 1881, the offence was complete on the contingencies
prescribed being satisfied. Merely because the Award passed by the
Arbitrator was under challenge, the same would not preclude the
payee of the cheque to invoke the right that was available under
Section138 of the Act, 1881. The learned counsel referred to provisions
of Section 142 of the Act of 1881 to urge that the expression used
therein was "Court" and not "Arbitrator". There was no bar to invoke
remedies available and, therefore, the complaint as filed under Section
138 of the Act of 1881 was maintainable. Reliance was placed on the
judgment of the Punjab & Haryana High Court in Vijay Kumar v. The
State of Punjab [1992 CR L J 1770].
08. I have heard the learned counsel for the parties at length
and I have given due consideration to the respective submissions.
09. It is not in dispute that the complainant had filed arbitration
apls145,180,181,182 &183.16
proceedings against the accused under Section 84 (1) of the said Act.
After the Award was passed by the Arbitrator, the accused after
accepting his legal liability to clear the loan account executed an
Agreement on 26th March, 2012. As per Clause (E) thereof, he had
agreed to pay a sum of Rs. 46,00,000-00 by way of monthly
installments. The cheque issued in that regard was dishonoured giving
rise to filing of Complaints under Section 138 of the Act of 1881.
10. As per provisions of Section 84 (1) of the Act of 2002, any
dispute touching the constitution, management or business of a Multi-
State Co-operative Society arising between the Society and its member
has to be referred to arbitration. As per said provisions, it is only the
Arbitrator who has got jurisdiction to entertain such dispute and no
other forum has got jurisdiction to do so. The expression
"notwithstanding anything contained in any other law for the time
being in force, if any dispute........." in Section 84(1) of the Act of 2002
would indicate that said provision has an overriding effect
notwithstanding anything contained in any other law for the time being
in force. In other words, the non-obstante clause has to be read in the
context of "any dispute". This provision cannot be construed in a
manner so as to give overriding effect to these provisions even with
regard to proceedings other than "any dispute." Thus, if there is any
apls145,180,181,182 &183.16
other law for the time being in force prescribing the manner of
resolving any dispute touching the constitution, management or
business of a Multi-State Co-operative Society, the provisions of
Section 84 (1) of the Act of 2002 would override the same. Said
provision cannot be read in a manner to mean that even a complaint
filed under Section 138 of the Act of 1881 cannot be entertained on
account of said non-obstante clause. There is a fundamental
distinction between a complaint filed under Section 138 of the Act of
1881 and a dispute arising under the said Act of 2002. It is well settled
that a particular cause of action could give a right for invocation of civil
remedy as well as remedy under Criminal Law. Once an offence is
alleged to have been committed under Section 138 of the Act of 1881,
the aggrieved person has got a statutory right to file a complaint under
Section 138 of the Act of 1881. That right cannot be said to be taken
away merely because some other civil remedy is also invoked by him.
I, therefore, find that provisions of Section 84 (1) of the Act
of 2002 cannot be construed in the manner as sought to be contended
by the accused. Merely because a dispute was filed under Section 84
(1) of the Act of 2002 and pursuant to the Award passed therein the
accused issued a cheque which came to be dishonoured, it cannot be
said that the complaint filed under Section 138 of the Act of 1881 itself
was not maintainable. The judgment of the Honourable Supreme
apls145,180,181,182 &183.16
Court in Maktool Singh [supra] sought to be relied by the learned
counsel for the applicants does not assist his contention. On the other
hand, the judgment in Vijaykumar [supra] holding that reference of the
dispute between the parties to an Arbitrator would not be a bar to
initiate criminal proceedings on the same cause of action supports the
stand of the non-applicant.
11. Perusal of the order passed by the Sessions Court indicates
that it has rightly found that the complaint filed under Section 138 of
the Act of 1881 was maintainable. The learned Magistrate was
justified in issuing Process in the said proceedings. I, therefore, find
that there is no case made out to quash the proceedings under Section
482 of the Code. It is clarified that this Court has only examined the
validity of the order passed by the learned Magistrate issuing Process.
The Complaints shall be decided on their own merits and it would be
open for the accused to raise all legal defences as are permissible in
law.
12. The Criminal Applications are accordingly dismissed.
At this stage the learned Counsel for the applicant seeks
stay of the effect and operation of this order for a period of eight
apls145,180,181,182 &183.16
weeks. This request is opposed by the learned Counsel for the non-
applicant. As interim relief was operating since 27 th June 2016, the
same shall continue to operate for a period of six weeks from today
and shall cease to operate at the end of aforesaid period.
Judge
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