J.T. Thanawala And Ors. vs State And Anr.
2006 Latest Caselaw 1805 Del

JUDGMENT

A.K. Sikri, J.

1. These petitions arise out of the same transaction and are, therefore, heard and disposed of by this common order. Forthe sake of convenience, the facts of Crl.M.C. Nos. 4983-87/2006 are mentioned below:

2. The respondent No. 2 entered into an Asset Purchase Agreement dated 28.12.2002 with the petitioner No. 5 herein, GeepBatteries (India) Pvt. Ltd., forsale of its business of batteries, torches and flash light under the brand name 'GEEP'. They also entered into a supplementary agreement dated 19.9.2003 in respect of transfer of inventory, etc. Various post-dated cheques were issued to the respondent No. 2 on behalf of the petitioner No. 5. The total consideration involved in these two agreements was approximately Rs. 40 crores out of which Rs. 36 crores has admittedly been paid by the petitioner No. 5. Subsequently, certain disputes arose between the parties and the petitioner No. 5 issued 'Stop Payment' instructions to its bankers in respect of the remaining post-dated cheques. On the threats extended by the respondent No. 2 for cancellation of the agreement and disposing of the intellectual property assets, the petitioner No. 5 filed a petition before this Court under Section 9 of the Arbitration and Conciliation Act, 1996. Vide judgment and order dated 7.4.2005, this Court restrained the respondent No. 2 from disposing of the intellectual property assets, etc. This Court further permitted the respondent No. 2 to withdraw Rs. 1.5 crores deposited by the petitioner No. 5 in the Court. It may be noted here that the dispute was also referred to an Arbitral Tribunal. Despite the instructions given by the petitioner No. 5 to its bankers for 'Stop Payment', the respondent No. 2 kept on presenting the post-dated cheques and began filing complaints under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act'). On the complaints filed by the respondent No. 2, the learned trial Court issued summons for their personal appearance and imposed costs. Feeling aggrieved by those orders, these petitions are filed with various prayers.

3. Firstly, learned Counsel for the petitioners submits that the petitioners were granted permanent exemption from personal appearance in cases pending before other Courts below, details whereof are mentioned at para 5 (page 6) of the petition, and in certain cases bail was granted and costs were also imposed. It is the contention of learned Counsel for the petitioner that even in the arbitration proceedings neither of the parties filed claim or counter claim till date. It is stated that the matter is being adjourned before the Arbitral Tribunal for the past six dates solely because of the representations made by the parties that their dispute is likely to be settled.

4. Secondly, it is submitted that the learned trial Court completely overlooked the fact that the petitioner Nos. 1 to 4 are permanent residents of Thane, Maharasthra and that petitioner Nos. 1 and 3 are senior citizens. It is argued that even if the petitioners were given exemption from their personal appearance, there would be no hindrance to the proceedings before the learned trial Court as the petitioners were being represented by duly authorized Counsel.

5. Thirdly, learned Counsel argued that the instant proceedings are under Section 138 of the Act and that petitioners have not committed any serious offence for not being granted exemption. It is submitted that out of the total consideration amounting to Rs. 40 crores, admittedly, the petitioner No. 5 had made a payment of Rs. 36 crores to the respondent No. 2. 'Stop Payment' instructions for the balance amount were issued as certain disputes arose and the same are now being adjudicated by the Arbitral Tribunal.

6. Summing up all the contentions, the reliefs prayed for by the petitioners are as under:

(a) setting aside the summoning orders issued against the petitioners; and

(b) waiver of the costs imposed there under.

During the course of arguments, however, prayer was limited to grant of exemption from personal appearance and waiver of costs.

7. The aforesaid facts would clearly indicate that settlement talks are going on between the parties; the matter has also gone for arbitration and before the Arbitrators also parties are seeking adjournments in view of the settlement talks going on between them. Because of this reason, the complainants are taking adjournment before the trial Court in these cases and have no led their evidence. Proceedings are under Section 138 of the Negotiable Instruments Act, 1881 only and the petitioners are residents of Maharashtra. In the case of Mrs. Shivani Sadanand v. State and Anr. , in para 4, the Court stated the principle to be kept in mind and it reads as under:

Admittedly, petitioner is a permanent resident of Bombay. She has been summoned as an accused for the offence under Section 138 of N.I. Act which does not involve any moral turpitude. It is a summons trial case. Section 205, Cr.P.C. constitutes an exception to the general rule that the accused must be present in person in the course of inquiry for trial during the criminal case. This section empowers the Magistrate todispense with the personal appearance of the accused. Power under the section can be exercised not only when the summons are issued against the accused but also at the initial stage, Sub-section (1) of Section 205, Cr.P.C. undoubtedly gives very wide discretion to the Magistrate issuing summons to decide whether the accused should appear in person or should be permitted to appear through a Lawyer but such discretion must be exercised judiciously. It is a settled proposition of law that wherever discretion is vested with Court it has to be exercised judiciously keeping in view the attending circumstances. For the purpose of granting exemption from personal appearance, the Court is only to see whether it would prejudice the progress of the trial. There must be cogent and convincing reasons for rejection of such application. Exemption should not be refused if accused is likely to be put to avoidable hardship and harassment. The power to dispense with the personal attendance of the accused should be liberally exercised except in the criminal cases of serious nature involving moral turpitude or where the offence is punishable with a sentence of long imprisonment. The Court should examine the matter and see whether any useful purpose is likely to be served by requiring the personal appearance of the accused. Personal attendance of the accused to receive notice regarding the substance of accusation and the plea of guilty thereto or not can also be recorded in suitable cases in absentia as has been held by Apex Court as well as by this Court in several authoritative pronouncements.

8. Thus, exemption was allowed to the accused when it was found that she was a permanent resident of Bombay and the case did not involve any moral turpitude. In para 6 of the said judgment, a question was formulated which a Court is required to address itself by deciding as to whether exemption of this nature should be allowed or not. The question was formulated in the following manner:

the question which the Court addresses itself is whether any useful purpose would be served by requiring the personal attendance of the accused or the progress of the trial is likely to be hampered on account of his absence.

9. In view of the aforesaid position, when there are negotiations for settlement between the parties and because of this reason the complainant is also not leading evidence and is seeking adjournments, I do not understand as to what purpose is going to be served in enforcing the attendance of the petitioners herein in these proceedings. Above all, proceedings are under Section 138 of the Negotiable Instruments Act, 1881 and the petitioners are not accused of any serious offence under the IPC. Taking into consideration all these facts, I am of the view that the learned trial Court should have granted exemption to the petitioners from personal appearance through their Counsel.

10. Accordingly, these petitions and the applications are allowed and the order dated 29.4.2006 declining personal exemption and the orders of imposition of costs are set aside. It is directed that the petitioners would be entitled to exemption from personal appearance through Counsel before the learned trial Court. However, the trial Court shall be within its right to enforce the attendance of the petitioner on a particular date when deemed necessary.