Blackburn Metals vs M/S. Zep Engineering Works And Ors
2021 Latest Caselaw 14556 Bom

                                  2. Cri.Appln.APL-1768-2019.doc




     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
           CRIMINAL APPELLATE JURISDICTION

     Criminal Application (APL) No. 1768 / 2019


Blackburn Metals
A partnership firm, through its partner,
Abhijeet Ambrish Kapadia,
Age : 30 years, Occupation : Business,
Having its office at :
8, Roop Maya CHS. Ltd., Plot No.7,
Sector-6, Above IDBI Bank, Airoli,
Thane - 400078.                      .. Applicant

            Versus.

1.   M/s. Zep Engineering Works

2.   Mukund Vinayak Shukla

     Having its office at K-27, MIDC,
     Ambad, Nashik - 422010.

3.   Sameer Mukund Burkule

4.   Sunita Mukund Burkule

     Residing at 6, Pushpanjali CHS Ltd.
     Rajiv Nagar, CIDCO,
     Nashik - 422009.

5.   The State of Maharashtra              ..     Respondents



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                              ****
Mr. Karl Rustomkhan, Advocate for the Applicant.
Mr. Sachin Gite, Advocate for Respondent No.2.
Ms. Ketki Gadkari, Advocate for Respondent No.3.
Mr. S.S. Hulke, APP for State/ Respondent No.5.
                              ****

                CORAM            :     SANDEEP K. SHINDE J.
                RESERVED ON      :     16th SEPTEMBER, 2021.
                PRONOUNCED ON :        06th OCTOBER, 2021.


Judgment : -

1.   Rule.

2.   Rule made returnable forthwith.                Heard, finally

with the consent of the parties.


3.   This application under Section 482 of the Code

of   Criminal      Procedure,     1973       (Code       for       short)

challenges   the    order   dated     23rd     October,        2019       in

Criminal Revision Application No.79/2019 passed by

the Court of Sessions Judge, Thane.


4.   Facts      essential       for      decision           of       this



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application, are as follows;

.      Applicant is a partnership firm engaged in the

business of trading and supplying of metal products

from its office at Thane.             Respondent No.1 is also a

partnership         firm    engaged     in     the        business         of

manufacturing of sheet metal pressed components, of

which Respondent Nos. 2 to 4 are partners.                                 The

Applicant      and    the    Respondent       No.1     had      business

dealings since 2013, over the years. Respondent No.1

through Respondent Nos. 2 to 4, received the goods

sold    by    the     Applicants'      firm     and       acknowledged

receipt of the same.         As on 17th October, 2018, a sum

of Rs. 26,68,206/- was due to the Applicants by the

Respondent No.1 towards goods sold and delivered to

them.        Subsequently     in   discharge         of    said      dues,

Respondent No.1 issued a cheque dated 25th September,

2018, in a sum of Rs. 25,47,982/- in favour of the

Applicant.      The cheque was returned unpaid.                      After

which, notices were exchanged, followed by complaint

bearing S.C.C. No.10767/2018, filed in the Court of

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Magistrate at Thane under Section 138 read with 141

of the Negotiable Instruments Act, 1881 (Act for

short). Pursuant to complaint and upon verification,

statement of the Applicant being recorded on 22nd

November, 2018, learned Magistrate issued process on

16th January, 2019.    This order reads as under;

         ORDER BELOW EXH. IN S.C.C. NO.10767/2018
1)   I    have   personally   verified     the      complainant
through Aadhar Card.   On perusal of the complaint,
documents filed along with it and after taking into
consideration the statement of the complainant on
oath and hearing learned advocate of the complainant
at length. I am satisfied that there is sufficient
ground for proceeding against the accused.  Hence,
the order.
ORDER :

Issue process against the accused for the offence punishable under Section 138 r/w 141 of N.I. Act returnable on 30/01/2019.

5. The Respondent Nos. 1 to 4 challenged the order,

issue process in Criminal Revision Application No.

79/2019 before the learned Sessions Court at Thane.

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6. The learned Sessions Court vide order 23rd

September, 2019 allowed the revision and set aside

the order issue process on the following grounds;

(i) At the material time, when the complaint was

filed, Complainant-firm was unregistered partnership

firm and therefore complaint was not maintainable

under Section 69(2) of the Indian Partnership Act,

1932.

(ii) At the material time, when the process was

issued, accused were residing at a place beyond the

area in which he exercises his jurisdiction and

therefore ought to have postponed the issue of

process and further, either inquired into the case

himself or direct the investigation to be made by a

police officer or by such other person as he thinks

fit for the purpose of deciding whether or not,

there was sufficient ground for proceeding.

(iii) The issue process order was passed without

examining the complaint upon oath, by simply relying

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on the verification below the complaint.

(iv) When the statutory notice issued by the

complainant-firm, was replied it was informed to the

Complainant that accused no. 4 - Ms. Sunita Mukund

Burkule was no way concerned with the partnership

firm, nor was responsible for day to day transaction

of the partnership firm. In spite of this fact, Ms.

Sunita Burkule was arraigned as an accused and order

issue process was passed mechanically by the learned

Magistrate.

7. Heard. Mr. Karl Rustomkhan for the Applicant;

Mr. Gite for Respondent No.2; Ms. Gadkari for

Respondent No.3 and Mr. Hulke, learned APP for

State.

8. Unregistered Partnership - maintainability of

complaint under Section 138 of the N.I. Act:

Whether prosecution under Section 138 of the Act is

hit by the bar created by Subsection 2 of Section

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69 of the Indian Partnership Act, 1932, was the

question referred to Division Bench of this Court in

the case of Narendra Amarnathji Kalda Vs.

Balbirsingh Motisingh Chawhan. It appears in the

case of Sai Accumaltor Industries, Sangamner Vs.

Sethi Brothers, Aurangabad, the learned Judge of

this Court was of the view that complaint filed by

unregistered firm under Section 138 of the Act, was

not tenable in law in view of the bar under Section

69(2) of the Indian Partnership Act, 1932; whereas a

diagonally opposite view was taken in the case of

Narendra Amarnathji Kalda (supra). On reference the

Division Bench after taking into consideration the

judgment in the case of A.V. Ramanaiah M. Shekhara

ALD (Cri) 2009 2 80, concluded that prosecution of

an accused under Section 138 of the Act is not hit

by the bar created by Subsection 2 of Section 69 of

the Indian Partnership Act. This judgment in

Narendra Amarnathji Kalda (supra) of the Division

Bench, as it appears, was not brought to the notice

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of the learned Additional Judge, Thane. May be for

this reason, he held otherwise, that the prosecution

under Section 138 of the Act was not maintainable at

the instance of unregistered partnership firm.

9. The second ground on which the learned Sessions

Judge set aside the order issue process was that the

learned Magistrate did not examine the Complainant

upon oath, but simply relied on the verification

appended to complaint. This reason is factually

incorrect in view of the verification dated 22nd

November, 2018, which reveals that the Complainant

was examined oath, as is evident from the order

issue process as reproduced herein above. Be that

as it may may, in the case of Rajesh Chalke Vs.

State of Maharashtra 2011(1) Mh.LJ (F.B.) 244, the

issue before Full Bench was whether in view of

provisions of Section 145 of N.I. Act, the

Magistrate, taking up a complaint under Section 138

of N.I. Act, alongwith documents in support thereof

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and verification made in the affidavit in support of

the complaint, is still obliged to examine on oath

the Complainant and his witnesses before issuing

process on the Complainant. Full Bench of this

Court after considering the object of Section 138 of

the N.I. Act vis-a-vis the provisions of Section 145

of N.I. Act and 200 of Cr.P.C. has held that:

"After addition of Section 145 of N.I. Act in the statute book, it is open to the Magistrate to issue process on the basis of the contents of the complaint, the documents in support thereof and the affidavit submitted by the complainant in support of the complaint. Once the complainant files an affidavit in support of the complaint before issuance of the process under Section 200, Cr.P.C., it is thereafter open to the Magistrate, if he thinks it fit, to call upon the complainant to remain present and to examine him as to the facts contained in the affidavit submitted by the complainant in support of his complaint. But then it is a matter of discretion and the Magistrate is not bound to call upon the complainant to remain present before the Court and to examine him upon oath for taking decision whether or not to issue process on the complaint under Section 138 of N.I. Act."

2. Cri.Appln.APL-1768-2019.doc

. Herein, Complainant was examined on oath;

learned Magistrate perused the documents; heard

Advocate for the Complainant and issued process.

Thus, the finding of the Revisional Court that order

'issue process' was passed simply relying on

verification was factually incorrect, and thus set

aside.

10. The next question is; in a case in which, the

accused is residing at a place beyond the area in

which learned Magistrate exercises his jurisdiction

'whether it would be mandatory to postpone issue of

process and hold inquiry or the investigation for

the purpose of deciding, whether or not there is

sufficient ground for proceeding.'

. In relation to this question, it would be

advantageous to refer to Section 202 of the Code,

which provides for postponing of issue of process.

The same reads as follows ;

2. Cri.Appln.APL-1768-2019.doc

"202. Postponement of issue of process : (1) Any Magistrate, on receipt of a complaint of an offence of which he is authorised to take cognizance or which has been made over to him under Section 192, may, if he thinks fit[and shall, in case where the accused is residing at a place beyond the area in which he exercises his jurisdiction,] postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for proceeding:

Provided that no such direction for investigation shall be made--

(a) where it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session; or

(b) where the complaint has not been made by a Court, unless the complainant and the witnesses present (if any) have been examined on oath under Section 200. (2) In an inquiry under sub-section (1), the Magistrate may, if he thinks fit, take evidence of witnesses on oath:

Provided that if it appears to the Magistrate that the offence complained of is triable exclusively by the Court of Session, he shall call upon the complainant to produce all his witnesses and examine them on oath. (3) If an investigation under sub-section (1) is made by a person not being a police officer, he shall have for that investigation all the powers conferred by this Code on an officer-in-charge of a police station

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except the power to arrest without warrant."

11. Mr. Karl Rustomkhan, learned Counsel for the

Applicant submitted simply because accused reside

beyond the jurisdiction of the Court, order issue

process would not vitiate if in a given case

requisite satisfaction is obtained/ derived from the

material on record. He drew my attention to order

'issue process' (reproduced hereinabove) to contend

that, learned Magistrate has issued process after

verifying the complaint; documents, produced with

it, and after hearing the advocate for the

Complainant. He therefore, submitted, after

application of mind, process was issued and it was

not issued mechanically. In support of the

contention, he relied on the judgments of this Court

in the case of (i) Bansilal S. Kabra Vs. Global

Trade Finance Ltd. (2010 ALL MR (Cri) 3168); (ii)

Dr. Rajul Ketan Raj Vs. Reliance Capital Ltd.

2016(5) Mh.L.J.58; (iii) Girish Dharmchand Chordiya

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vs. Neeta Sachin Chandak (Criminal Writ Petition No.

997/2017). He submitted that the object of the Act

will stand defeated if an inquiry under Subsection 1

of Section 202 of the Code is held to be mandatory

in the complaint under Section 138 of the Act. Mr.

Rustomkhan would largely rely on the judgment in the

case of Dr.Rajul Ketan Raj (supra), which in turn

relied on in the case of Bansilal S. Kabra (supra),

wherein similar view was taken with regard to

provision Subsection 202 of the Code. Besides, Mr.

Rustomkhan has taken me through the judgment of the

Hon'ble Apex Court in the case of Vijay Dhanuka Vs.

Najima Mamtaj, 2014 ALL MR (Cri.) 1924 (SC) to

contend, that although the Hon'ble Supreme Court in

the said decision has considered the issue relating

to compliance of Section 202 of the Code, qua the

prosecution under the Indian Penal Code is

mandatory; however this Court in the case of Dr.

Rajul Raj (supra) has drawn distinction between the

proceedings under Section 138 of the N.I. Act and

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the Prosecution under the IPC. In the case of Dr.

Rajul Raj (supra), the learned Judge after

considering the scope of Section 138 and other

amended provision of the Act, has held that the

amended provisions could not achieve the desired

result, which necessitated the Parliament to make

changes in existing provisions and further

introduced Sections 143 to 147 by the Negotiable

Instruments (Amendment and Miscellaneous Provisions)

Act, 2002. Thus, held that the very object of the

Act will stand defeated if the inquiry under

Subsection 1 of Section 202 of the Code is held to

be mandatory in the complaint under Section 138 of

the Negotiable Instruments Act. The judgment in the

case of Dr. Rajul Ketan Raj (supra) was followed in

the case of Girish Dharmchand Chordiya (supra).

12. The next authority relied on by learned Counsel

for the Applicant is the order of the Hon'ble Apex

Court in Suo Motu Writ Petition (Cri) No. 2 / 2020

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decided on 16th April, 2021. Concerned with the large

number of cases filed under Section 138 of the

Negotiable Instruments Act, 1881 pending at various

levels, a Division Bench of the Hon'ble Apex Court

decided to examine the reasons for the delay in

disposal of these cases and the Registry was

directed to register a Suo Motu Writ Petition

(Criminal) captioned as "Expeditious Trial of Cases

under Section 138 of the Negotiable Instruments

Act." This order refers to scope of Section 202,

which was amended with effect from 23rd June, 2006

vide Act 25 of 2005. A reference was made to the

judgments in the case of Vijay Dhanuka (supra) and

Birla Corporation Limited vs. Adventz Investments

and Holdings Limited (2019) 16 SCC 610. In paragraph

No.10 of the order, the Hon'ble Apex Court has

noted, a divergence of opinion amongst the High

Courts relating to the applicability of Section 202

in respect of complaints filed under Section 138 of

the Act. The observations in the Paragraph No.10 of

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the order reads as under;

"Certain cases under Section 138 have been decided by the High Courts upholding the view that it is mandatory for the Magistrate to conduct an inquiry, as provided in Section 202 of the Code, before issuance of process in complaints filed under Section 138. Contrary views have been expressed in some other cases. It has been held that merely because the accused is residing outside the jurisdiction of the Court, it is not necessary for the Magistrate to postpone the issuance of process in each and every case. Further, it has also been held that not conducting inquiry under Section 202 of the Code would not vitiate the issuance of process, if requisite satisfaction can be obtained from materials available on record."

13. In Paragraph No. 11 of the order, the Hon'ble

Apex Court has held thus;

"in view of the judgments of this Court in Vijay Dhanuka (supra), Abhijit Pawar Vs. Hemant Madhukar Nimbalkar (2017) 3 SCC 528 and Birla Corporation Limited (supra), the inquiry to be held by the Magistrate before issuance of summons to the accused residing outside the jurisdiction of the Court cannot be dispensed with."

. However their Lordships were in agreement with

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the recommendation of learned Amicus Curiae that the

Magistrate should come to a conclusion after holding

an inquiry that there are sufficient grounds to

proceed against the accused.

14. In Paragraph No.12, Hon'ble Apex Court has

observed that:

"Another point that has been brought to ournotice relates to the interpretation of Section 202(2) which stipulates that the Magistrate shall take evidence of the witness on oath in an inquiry conducted under Section 202(1) for the purpose of issuance of process. Section 145 of the Act provides that the evidence of the complainant may be given by him on affidavit, which shall be read in evidence in any inquiry, trial or other proceeding, notwithstanding anything contained in the Code. Section 145(2) of the Act enables the court to summon and examine any person giving evidence on affidavit as to the facts contained therein, on an application of the prosecution or the accused. It is contended by the learned Amici Curiae that though there is no specific provision permitting the examination of witnesses on affidavit, Section 145 permits the complainant to be examined by way of an affidavit for the purpose of inquiry under Section

202. He suggested that Section 202 (2) should be

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read along with Section 145 and in respect of complaints under Section 138, the examination of witnesses also should be permitted on affidavit. Only in exceptional cases, the Magistrate may examine the witnesses personally. Section 145 of the Act is an exception to Section 202 in respect of examination of the complainant by way of an affidavit. There is no specific provision in relation to examination of the witnesses also on affidavit in Section 145. It becomes clear that Section 145 had been inserted in the Act, with effect from the year 2003, with the laudable object of speeding up trials in complaints filed under Section 138. If the evidence of the complainant may be given by him on affidavit, there is no reason for insisting on the evidence of the witnesses to be taken on oath. On a holistic reading of Section 145 alongwith Section 202, we hold that Section 202(2) of the Code is inapplicable to complaints under Section 138 in respect of examination of witnesses on oath. The evidence of witnesses on behalf of the complainant shall be permitted on affidavit. If the Magistrate holds an inquiry himself, it is compulsory that he should examine witnesses. In suitable cases, the Magistrate can examine documents for proceedings under Section 202."

. The dictum is when Magistrate holds inquiry

himself, it is not compulsory that he should examine

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the witnesses and in suitable cases the Magistrate

can examine documents for satisfaction as to the

sufficiency of grounds for proceedings under Section

202.

(emphasis supplied)

15. In the case in hand, the learned Magistrate

while issuing the process, has personally verified

the complaint; perused the documents filed alongwith

it and after taking into consideration the statement

of Complainant on oath and upon hearing, learned

Advocate for the Complainant at length held that

there were sufficient grounds for proceeding against

the accused. I have reproduced the order issue of

process herein above. It shows that the learned

Magistrate has not only verified the complaint and

heard the Complainants' Advocates, but also perused

the documents filed alongwith the complaint for

obtaining satisfaction as to sufficiency of ground

for proceeding under Section 202.

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16. Thus, in consideration of the law laid down by

this Court making a distinction between the

complaint under Section 138 of the Act and

complaints for offences under IPC, in the case of

Rajul Ketan Raj (supra) and Girish Dharmchand

Chordiya (supra) and the order passed in Suo Motu

Writ Petition (Cri) No. 02/2020 and in particular

the observations made in Paragraph Nos. 10, 11 and

12 thereof, in my view herein order issue process

passed by the learned Magistrate cannot be faulted

with for want of inquiry contemplated under Section

202(1) of the Code. The complaint in question, was

filed alongwith requisite documents namely invoices;

delivery challans; transporters' receipts; copy of

cheque dated 25th September, 2018; copy of statutory

notice dated 17th October, 2018; copy of reply dated

31st October, 2018; copy of rejoinder reply dated 16th

November, 2018. Therefore, though the accused Nos.

1, 2 and 3 were residing at a place beyond the

territorial jurisdiction of the learned Magistrate,

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and although he did not postpone the issuance of

process, order issue process shows that learned

Magistrate has obtained requisite satisfaction, from

the documents available on record as to sufficiency

of the grounds for proceeding under Section 202

against the accused. In view of this matter and for

the aforestated reasons, impugned order in Criminal

Revision Application No. 79/2019 is quashed and set

aside.

17. In the course of arguments, Mr. Karl Rustomkhan,

learned Counsel for the Applicant submitted on

instructions, that the Complainant does not want to

proceed against Ms. Sunita Burkule - Accused No. 4

in the subject complaint, pending on the file of

Judicial Magistrate First Class, Thane. The

statement is accepted. In consequence, the process

issued against Accused No.4 - Ms. Sunita Burkule is

quashed and set aside. Having said that,

Petitioners shall pay cost Rs. 50,000/- to

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Respondent No.4, in view of the fact that she was

neither partner, nor signatory of disputed cheque.

Moreover, the Respondents in their notice reply

dated 31st October, 2018, brought this fact to the

notice of the Petitioner. Yet they proceeded

against her and impleaded her as party Respondent

and caused inconvinience to her.

18. As a result, the 'issue process' order passed by

the learned Magistrate on 16th January, 2019 is

upheld. Impugned order is quashed and set aside.

Rule is made absolute in the aforesaid terms.

Application is allowed and disposed of.

                                           (SANDEEP K. SHINDE, J.)



                                       Digitally signed
                            MOHAMMAD   by MOHAMMAD
                                       NAJEEB
                            NAJEEB     MOHAMMAD
                            MOHAMMAD   QAYYUM
                            QAYYUM     Date: 2021.10.06
                                       15:27:09 +0530




Najeeb..