Delhi High Court
Enchants Jewellary Ltd. And Ors. vs State Bank Of India on 30 November, 2005
Author: J Singh
Bench: J Singh
ORDER
J.P. Singh, J.
1. This petition under Section 482 of the Code of Criminal Procedure has been filed for quashing criminal complaint under Section 138 read with Sections 141 and 142 of the Negotiable Instruments Act, 1881 as also summoning order dated 17.1.2003. The matter is pending in the court of Metropolitan Magistrate, New Delhi.
2. I have heard Mr. Sunil Sethi, learned counsel for the petitioner, on the point of admission, and have going through the copies of the documents placed on the file.
3. Briefly, the facts are that the petitioner No. 1/accused company deals in jewellery business. The petitioner No. 2 is the Chairman of the company. The petitioner No. 3 and 4 were employed as Secretary and Manager (Accounts), respectively in the company. The petitioner company conceived a project for manufacturing jewellery and approached a subsidary of complainant State Bank of India for loan. It is alleged that the Bank defaulted in its obligations and disbursed only Rs. 200 lakh of the sanctioned 525 lakh. Due to inadequacy of the amount, the project failed.
4. The bank filed a recovery suit in the Debt Recovery Tribunal. The petitioner company raised objections. The company was granted time to repay the bank loan in 35 quarterly installment with simple interest @ 9% p.a. The petitioner company challenged even the said order before Debt Recovery Appellate Tribunal, Mumbai. Meanwhile, negotiations continued. The petitioner company then offered a lump sum of Rs. 7.00 crore as a settlement amount and Director of the company gave a cheque in the sum of Rs. 35.00 lakh as an installment which was allegedly given as a token for compromise proposal. But the bank presented the cheque which was dishonoured and after issuing legal notice, the Bank filed a criminal complaint under Section 138, 141 and 142 of the Negotiable Instruments Act, 1881.
5. It is alleged that though the petitioners held important positions at the time of the alleged offence, they were not responsible for the conduct of the business or day to day management of the company. Hence, they cannot be held liable for the alleged offence. Therefore, quashing of the complaint and proceedings emanating there from is sought.
6. The above facts, prima facie, show that there is no denial of the fact that the petitioner has to pay back the loan (Rs.7.00 crore) taken from the State Bank of India and the cheque given in the sum of Rs. 25.00 lakh was to show its bona fide for entering into a complete compromise. The propounded condition that the cheque was not to be honoured if the negotiations failed in absurd on the face of it. The facts of the case prima facie show how easily these people squander public money. Prima facie, the petitioners have been rightly summoned by the learned Metropolitan Magistrate. Needless to say that the petitioners will be given opportunity to cross-examine the respondent's witnesses and will be allowed to give their defense. The result will depend on all the facts and circumstances that come before the trial court as evidence. I may mention here that the Negotiable Instruments Act, 1881 was amended in 2002. The objects and reasons for the said amendments are as under:
Amendment Act 55 of 2002 - Statement of Objects and Reasons - Negotiable Instruments Act, 1881 was amended by the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 wherein a new Chapter XVII was incorporated for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. These provisions were incorporated with a view to encourage the culture of use of cheques and enhancing the credibility of the instrument. The existing provisions in the Negotiable Instruments Act, 1881, namely, section 138 to 142 in Chapter XVII have been found deficient in dealing with dishonour of cheques. Not only the punishment provided in the Act has proved to be inadequate, the procedure prescribed for the Courts to deal with such matters has been found to be cumbersome. The Courts are unable to dispose of such cases expeditiously in a time bound manner in view of the procedure contained in the Act.
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5. The proposed amendments in the Act are aimed at early disposal of cases relating to dishonour of cheques, enhancing punishment for offenders, introducing electronic imagine of a truncated cheque and a cheque in the electronic form as well as exempting an official nominee director from prosecution under the Negotiable Instrument Act, 1881 .
The above provisions leave no doubt that as a result of the amendments, the matters under Section 138 of the Negotiable Instruments Act are to be tried as summary cases and in Sub-section 3 of Section 143 of the Act, there is another direction that trials shall be concluded as expeditiously as possible and an endeavor shall be made to conclude the trial within six months from the date of filing of the complaint.
7. I am of the view that if right at the threshold, the matter is stayed or there is interference from this court under Section 482 Cr.P.C., against every order passed by the Magistrate then the very purpose of the amendments will stand defeated. The provisions of the Act are not meant to remain only on the statute book without any practical application. Since the matter is to be decided expeditiously, there is no reason why the petitioners cannot present their defense to the trial court as early as possible and get themselves discharged or acquired, rather than rushing to the High Court on one or another pretext. I am of the opinion that only motive of the petitioners is to stall the proceedings in the trial court which will be against the spirit and intent of the Negotiable Instruments Act.
8. Considering all the facts and circumstance of this case, I do not find any justification for interference under Section 482 of Cr.P.C. The petition is, therefore, dismissed.
