Anuj Trading Co. vs Electrolux Kelvinator Ltd.
2007 Latest Caselaw 288 Del

JUDGMENT

Mukundakam Sharma, C.J.

1. The present appeal has been preferred by the appellant / plaintiff being aggrieved by the order dated 9th September, 2005 whereby the interim applications IA No. 6912/2003 and 2098/2005 were disposed of holding that prayer (a) and (b) of IA No. 6912/2003 cannot be granted at the present stage because the appellant is yet to prove that he had handed over 16 cheques to the defendant / respondent and that cheque No. 804340 has been forged later on by inserting figures therein. It was also held that prayer (c) also cannot be granted. Consequently, both the aforesaid applications were disposed of by the aforesaid order.

2. In the suit it was pleaded by the appellant that it was appointed as the sole distributor by the respondent / defendant by agreement dated September, 1999. It could not be disputed that a settlement took place between the parties in respect of the account for the period September, 1999 to 24.11.2001, which envisaged that the appellant / plaintiff would be liable to pay Rs. 84.44 lacs to the respondent / defendant. The appellant issued ten cheques of Rs. 5 lacs each and two cheques were left blank to be filled in on 27.11.2001 after further clarification in respect of accounts. The aforesaid two cheques were subsequently filled in for a sum of Rs. 3,57,039/- and Rs. 2,14,235/-. According to the appellant it has been issuing blank cheques and that some of them were utilised by the defendant / respondent in consultation with the appellant but then there are still 16 cheques which are lying with the respondent / defendant.

3. The aforesaid statement of the appellant is disputed by the respondent / defendant, who has stated that there is only one cheque No. 804340, which on presentation, was dishonoured. Consequently, the respondent filed a complaint under Section 138 of the Negotiable Instruments Act, which is pending disposal before the Judicial Magistrate, Gurgaon. Consequent thereto, the appellant instituted the aforesaid suit as plaintiff for five reliefs extracted in the impugned order. By filing an application (IA No. 6912/2003), the appellant sought a direction to the respondent for return of the 16 cheques allegedly deposited with the respondent / defendant, and for cancellation of writings / additions made by them in cheque No. 804340, and also restraint order against the proceedings under Section 138 of the Negotiable Instruments Act. In the other IA No. 2098/2005, the appellant has made a specific prayer that the respondent / defendant be restrained from proceeding with the complaint filed under Section 138/141 of the Negotiable Instruments Act.

4. The learned Single Judge, who heard the said applications, held that prayer (a) and (b) of the application (IA No. 6912/2003) cannot be granted at the present stage because the plaintiff / appellant is yet to prove and establish that it has handed over 16 cheques to the respondent / defendant and cheque No. 804340 has been forged later on by inserting figures therein. It was also observed that the aforesaid stand is also the defense taken by the appellant in the proceeding under Section 138 of the Negotiable Instruments Act and, therefore, so long as the same is not proved and established in the suit, no such direction could be issued. So far prayer (c) is concerned, it was held that law in that regard is very clear as under the provisions of Section 41 of the Specific Relief Act, 1963, it is specifically provided that an injunction cannot be granted to restrain any person from instituting or prosecuting any proceeding in a criminal matter. In that context of the aforesaid findings it was held that no restraint order could be passed as sought by the appellant. 5.Counsel appearing for the appellant submitted before us that when on the same cause of action and the same transaction both criminal proceedings and connected civil suit are pending, the criminal proceedings should be stayed as there is every likelihood of prejudice being caused to the appellant. In support of the said contention, the counsel relied upon the decision of the Nagpur High Court in Madhao Bhagwant Deshmukh v. Emperor reported in AIR 1926 Nagpur 315. Our attention was also drawn to the decision of Palm Print Textiles (India) Ltd. and Anr. v. British Millerain Co. Ltd. .

6. A perusal of the aforesaid decision of the Division Bench of this Court would indicate that the said decision was rendered in the light of the facts which are clearly distinguishable from the facts of the present case. The said case decided by the Division Bench was concerned with an ex parte ad interim injunction and dealt with the issue as to whether such ad interim injunction should be issued considering the seriousness and dispute about existence of a basic contract. Therefore, the said decision cannot be said to be applicable to the facts of the present case.

7. On the other hand, counsel appearing for the respondent has drawn our attention to the fact that the proceedings under Section 138 of the Negotiable Instruments Act against the appellant were instituted by the respondent, which are pending consideration and that after institution of the said proceeding and during the pendency of the said proceedings, the aforesaid suit was instituted. It was submitted before us that the restraint order which is sought by the appellant restraining the respondent from proceeding with the 138 proceedings cannot be granted as it is settled position of law that both the proceedings, one under Section 138 of the Negotiable Instruments Act as also the suit could be proceeded with simultaneously.

8. We have given our anxious consideration to the submission of the counsel for the parties. In the case of Gurcharan Singh and Anr. v. Allied Motors Ltd. and Anr. reported in (2005) 10 SCC 626, the Supreme Court has held that the civil proceedings or arbitration proceedings for recovery and the criminal proceedings under Section 138 of the Negotiable Instruments Act are based on independent cause of action in which making of the award may be a defense to such a complaint but to what extent the defense would be valid, would have to depend upon the facts and circumstances of each case. It was also held that mere making of the award cannot be a ground to stall or stay the proceedings initiated under Section 138 of the Negotiable Instruments Act. In our considered opinion, the ratio of the aforesaid decision is squarely applicable to the facts of the present case. The subject matter of the 138 proceedings is the cheque which was dishonoured on presentation and consequent thereto the aforesaid complaint was filed on the basis of which 138 proceedings have been initiated and are pending for consideration. On the other hand, the appellant has subsequently filed a civil proceeding, but that cannot be a ground to stay the proceedings initiated and pending under Section 138 of the Negotiable Instruments Act as the said two proceedings are based on independent cause of action. Therefore, there is no ground to stay the criminal proceedings of complaint case and the learned Single Judge was justified in holding accordingly. In this connection, we may also refer to another decision of this Court in Capt. Atul Kumar Singh v. Ms. Jalveen Rosha . The aforesaid decision was also rendered on similar facts where suit was filed after institution of the criminal case against plaintiff under Section 138 of the Negotiable Instruments Act. In the said decision it was specifically held by a learned Single Judge of this Court that injunction sought by the plaintiff cannot be granted in view of the provisions of Section 41(b) of the Specific Relief Act. In the said case also the dishonoured cheques were the foundation of the criminal case instituted by the defendant against the plaintiff. In the light of the said facts it was held by the learned Single Judge that in a suit for declaration the court may determine the position as it stood on the date of the plaint. In the said case also the position was that the cheques were already used by the defendant much prior to the institution of the suit. Facts are almost identical and similar and, therefore, the ratio of the aforesaid decision is also squarely applicable to the facts of the present case.

9. The learned Single Judge held that reliefs claimed in the suit are in substance for an injunction restraining the defendant from prosecuting the criminal case instituted against the plaintiff and, therefore, Section 41(b) of the Specific Relief Act would come into play and would stand on the way of the court exercising jurisdiction to grant injunction. It was held that the injunction sought by the plaintiff cannot be granted since it would have the effect of preventing the defendant from prosecuting the criminal case against the plaintiff/appellant.

10. Reference also can be made to another decision in Aristo Printers Pvt. Ltd. v. Purbanchal Trade Centre, Guwahati reported in I (1992) BC 205. In the said case, the provisions of clause (a), (b) and (d) of Section 41 of the Specific Relief Act, 1963 came up for consideration. The Division Bench of the Guwahati High Court interpreted the aforesaid provisions and in that context it was held that the lower court in which the civil suit is pending and the criminal court in which the appellant may choose to file a criminal complaint are not in the same hierarchy of Court and that the criminal court is not subordinate to civil court and, therefore, clause (b), which bars an injunction being granted to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought, would clearly apply to the facts of the case. It was also held in the said decision that since what is sought to be restrained in institution of any proceedings in criminal matter, the bar under clause (d) would also be attracted.

11. In our considered opinion, no restraint order could have been passed by the learned Single Judge staying the proceedings initiated against the appellant under Section 138 of the Negotiable Instruments Act as that would amount to an order passed in violation of the law laid down in the aforesaid decisions. 12.We find no infirmity in the order passed by the learned Single Judge. This appeal is dismissed.