Gujarat High Court
Chetan Devjibhai Patel vs State Of Gujarat on 9 August, 2023
Bench: Sandeep N. Bhatt
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION NO. 3821 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4148 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4141 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3823 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4140 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3847 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4143 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4366 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3842 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3846 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3833 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3898 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 4146 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3828 of 2021
With
R/SPECIAL CRIMINAL APPLICATION NO. 3829 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
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4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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CHETAN DEVJIBHAI PATEL
Versus
STATE OF GUJARAT
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Appearance:
MR SALIL M THAKORE(5821) for the Applicant(s) No. 1
MR APURVA R KAPADIA(5012) for the Respondent(s) No. 2,3
MR DHAWAN JAYSWAL, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 09/08/2023
COMMON ORAL JUDGMENT
1. All these petitions are filed under Articles 226
and 227 of the Constitution of India read with Section
482 of the Code of Criminal Procedure, 1973 (`the Code'
for short) for quashing and setting aside the complaints
being Criminal Case Nos.48140 of 2019, 48190 of 2019,
48126 of 2019, 48166 of 2019, 48144 of 2019, 48130 of
2019, 57730 of 2019, 48145 of 2019, 48270 of 2019,
48193 of 2019, 57784 of 2019, 48146 of 2019, 48269 of
2019, 48136 of 2019 and 48324 of 2019, pending before
the learned Judicial Magistrate (First Class), Surat filed
under the provisions of Section 138 of the Negotiable
Instruments Act (`NI Act' for short) and all orders
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passed therein and all proceedings consequent to the
same.
2. As the common question of facts and law are
involved in these petitions, at the request of learned
advocates for the parties, they are heard together and
disposed of by this common oral judgment.
3. Rule returnable forthwith. Learned advocate
Learned APP Mr.Jayswal waives service of notice for
respondent no.1 and learned advocate Mr.Apurva
Kapadiya waives service of notice of rule for respondent
nos.2 and 3.
4. For the sake of convenience, the facts of
Special Criminal Application No.3821 of 2021 are
considered, as stated in the application, which are as
under:
4.1 The petitioner is the accused in the complaint
filed by respondent nos.2 and 3 and resident of Bella
Casaa Society. Respondent no.2 is a partnership firm
engaged in construction business and respondent no.3 is
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one of the partners of respondent no.2-firm. It is averred
in the application that The respondent no.2 launched a
residential project in the year 2013 under the name
Bella Casaa and on inquiring pursuant to the
advertisement, the respondent no.2 and its partners
assured the petitioner with respect to the project and the
amenities it would have; that in the year 2017, the
respondent no.2 executed a registered agreement to sell
one flat with allied rights to the petitioner for which the
petitioner paid part consideration to respondent no.2 and
the balance consideration was to be paid later; that as
security for future payments, the petitioner also gave a
blank cheque to respondent no.2; that in March, 2018,
the respondent no.2 executed a registered sale deed in
favour of the petitioner for sale of the flat, which
mentioned categorically that the petitioner has paid the
entire sale consideration to respondent no.2; that at the
time of taking over the possession of the flat, the
development/completion of various amenities was pending
and the project was incomplete. However, despite passage
of considerable time, respondent no.2 did not complete
the project as assured. Inspite of repeated requests by
the society members, the respondent no.2 did not
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complete the pending project work; that, as a last resort,
the society members issued a notice to respondent no.2
on 15.7.2019 listing 19 pending works and informed the
respondent no.2 that they would take legal against it by
approaching RERA. It is averred that in August, 2019,
as a counter blast to the actions taken by the society
members, respondent no.2 deposited blank cheques that
were given by the petitioner and other society members
to respondent no.2 at the time of execution of agreement
to sell and deposited the same by filling the amount and
the date. That the complaint was filed in November,
2019, under Section 138 of the NI Act against the
petitioner stating that on demanding late payment
charges from the petitioner, the petitioner issued a
cheque to respondent no.2 on 26.8.2019 towards late
payment charges and the same got dishonoured. It is
these complaints which are prayed to be quashed by way
of these petitions.
5. Heard learned advocates for the parties.
5.1 Learned advocate Mr.Thakore for the petitioner
submits that the sale deed as well as the questionnaire
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categorically record that the petitioner has paid the
entire sale consideration to respondent no.2 and that the
respondent no.2 shall not raise any dispute with respect
to non payment of consideration and upon the sale deed
being executed, the petitioner had absolutely no liability
left towards the respondent no.2. He submitted that
when, since months, the society members were having
disputes with respondent no.2 who was not completing
the remaining works and therefore it not believable that
the petitioner or other society members would issue
cheques in favour of the respondent no.2. He submitted
that the complaints are a counterblast against the steps
taken by the society members against respondent no.2,
particularly, the notice issued by them to approach
RERA. He further submitted that the even if the
allegations made in the complaint are taken at their face
value, they do not constitute or disclose the commission
of offence or case against the petitioner; that the
allegations do not make out any of the ingredients of
the offence alleged; that the allegations in the complaint
are vague and bereft of any particularly; that the blank
cheque was issued prior to the sale deed as security;
that the alleged dishonour is for a cheque given as a
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security and not with respect to any debt or liability.
He, therefore, submitted that the ingredients of Section
138 of the NI Act are not made out and therefore
prayed to allow these applications.
5.2 In support of his submissions, learned advocate
for the petitioners relied on the following citations:
(1) Dashrathbhai Trikambhai Patel V/s Hitesh Mahendrabhai
Patel & Anr., dated 11.10.2022 passed in Criminal Appeal
No.1497 of 2022 by the Hon'ble Apex Court.
(2) Eicher Tractor Limited and Others V/s Harihar Singh
and Another, reported in (2008)16 SCC 763.
(3) Madhavrao Jiwaji Rao Scindia and another etc. V/s
Sambhajirao Chandrojirao Angre and Others, reported in
AIR 1988 SC 709.
(4) Mohammad Wajid & Anr. V/s State of U.P. & Ors.,
dated 8.8.2023 passed in Criminal Appeal No.2340 of 2023
by the Hon'ble Apex Court.
6. Per contra, learned advocate Mr.Kapadia for
the respondent nos.2 and 3 has opposed these petitions
and submitted that this Court should not exercise its
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powers by interfering with the proceedings of recovery of
amount and the proceedings initiated under Section 138
of the Act are perfectly justified. He submitted that the
impugned complaints are not an abuse of process of law
and undated cheques were not issued towards the
security. They are given against legally enforceable debt
and the signature is not disputed. The complaint filed
under the provisions of RERA are completely different
proceedings and they cannot be connected with the
impugned complaints just to exempt themselves from the
said complaints. The cheques were given against the late
payment charges and they were deposited and were
dishonoured. He has further submitted that no reply is
given to the notice issued under Section 138 of the NI
Act and petitioners are admittedly signatories of
respective cheques. Therefore, he submitted that this
Court should not exercise inherent jurisdiction under
Section 482 of the Code, which should otherwise be
exercised sparingly. He, therefore, prayed to dismiss
these petitions.
6.1 In support of his submissions, learned senior
advocate Mr.Apurva Kapadia has relied on the following
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citations:
(1) Rajeshbhai Paulbhai Chauhan V/s State of Gujarat
decided on 14.9.2022 passed in Criminal Miscellaneous
Application No.14408 of 2017 by this Court.
(2) Rathish Babu Unnikrishnan V/s State (Govt. of NCT of
Delhi) and Another reported in 2022(0) AIJEL-SC 69169.
6.2 Learned APP Mr.Jayswal for respondent no.1-
state has submitted that the facts of this case are
subject matter of trial and this Court should not exercise
inherent powers under Section 482 of the Code, which
otherwise, should be exercised sparingly. He, therefore,
prayed to dismiss all these petitions.
7. I have considered the rival submissions and
perused the material on record.
8. At the outset, the provisions of Sections 138
and 141 of the NI Act are required to be seen, which
read as under:
"138. Dishonour of cheque for insufficiency, etc., of funds in
the account.
Where any cheque drawn by a person on an account
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maintained by him with a banker for payment of any
amount of money to another person from out of that account
for the discharge, in whole or in part, of any debt or other
liability, is returned by the bank unpaid, either because of
the amount of money standing to the credit of that account
is insufficient to honour the cheque or that it exceeds the
amount arranged to be paid from that account by an
agreement made with that bank, such person shall be
deemed to have committed an offence and shall without
prejudice to any other provisions of this Act, be punished
with imprisonment for "a term which may extend to two
year", or with fine which may extend to twice the amount
of the cheque, or with both:
Provided that nothing contained in this section shall apply
unless
(a) The cheque has been presented to the bank within a
period of six months from the date on which it is drawn or
within the period of its validity, whichever is earlier.
(b) The payee or the holder induce course of the cheque, as
the case may be, makes a demand for the payment of the
said amount of money by giving a notice, in writing, to the
drawer, of the cheque, "within thirty days" of the receipt of
information by him from the bank regarding the return of
the cheques as unpaid, and
(c) The drawer of such cheque fails to make the payment of
the said amount of money to the payee or, as the case may
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be, to the holder in due course of the cheque, within fifteen
days of the receipt of the said notice.
Explanation: For the purpose of this section, "debt or other
liability"
means a legally enforceable debt or other liability."
Section 138 of the Act provides that a drawer of a
cheque is deemed to have committed the offence if the
following ingredients are fulfilled:
(i) A cheque drawn for the payment of any amount of
money to another person;
(ii) The cheque is drawn for the discharge of the `whole
or part' of any debt or other liability. `Debt or other
liability' means legally enforceable debt or other liability;
and
(iii) The cheque is returned by the bank unpaid because
of insufficient funds.
9. In the case on hand, the cheques issued by
the petitioner is not in dispute, the signature on the
cheques is not in dispute. The basic contention raised by
the petitioners is that the cheques were issued towards
the security even before the execution of the sale deeds,
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which is controverted and denied by the complainant to
the extent that it is his say that the said cheques were
issued towards the legally enforceable debt in the form
of late payment charges. It is also a matter of dispute
between the parties that these complaints are a
counterblast to the proceedings of RERA initiated by the
petitioners. Be that as it may. In the impugned
complaints, the cheques are admitted to have been issued
and signed by the petitioners. It is towards legally
enforceable debt or security cannot be decided at the
stage of quashment of the complaints and needs a full
fledged trial and this Court cannot conduct a mini trial
at this stage.
10. The ratio of the judgments relied on by the
learned advocate for the petitioner are binding to this
Court, however, considering the facts of the present case,
these judgments are not helpful to the case of the
petitioner in respective petitions.
11. It is fruitful to refer to the judgment in the
case of S.Krishnamoorthy V/s Chellammal reported in
(2015)4 SCC 559, wherein the Hon'ble Apex Court has
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held in paragraphs nos.5,7 and 8 of which read as
under:
"5. The above defence of the respondent (accused) before the
High Court, in the petition filed under Section 482 of the
Code, is nothing but absolutely factual in nature, which is
neither admitted by the complainant, nor apparent on the
face of the record. Such type of disputed factual defences
could have been appreciated only by the trial court, after
the parties led their evidence. In our opinion, the High
Court committed grave error of law in examining the
allegations and counter allegations which are disputed and
factual in nature in a proceeding under Section 482 of the
Code.
7. In view of the above position of law, we have no option
but to set aside the order passed by the High Court as it
has entered into highly disputed questions of fact and
concluded that the material before it was sufficient to cause
reasonable suspicion in the case of the complainant. That is
not the ground on which powers under Section 482 of the
Code can be exercised by the High Court.
8. Therefore, the appeal is allowed. The impugned order
dated 5.8.2009 passed by the High Court of Judicature at
Madras in Criminal O.P. No. 7989 of 2009 is hereby set
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aside. The Criminal complaint (CC No. 120 of 2007) pending
before the Judicial Magistrate, Dharapuram, shall stand
revived. The trial court shall proceed in accordance with
law."
12. In the case of Rathish Babu Unnikrishnan
(supra), it is held by the Hon'ble Apex Court in
paragraph nos.15, 16 and 17 as under:
"15. In the impugned judgment, the learned Judge had
rightly relied upon the opinion of Justice J.S.Khehar for a
Division Bench in Rajiv Thapar (supra), which succinctly
express the following relevant parameters to be considered
by the quashing Court, at the stage of issuing process,
committal, or framing of charges.
"28. The High Court, in exercise of its jurisdiction under
Section 482 of CrPC, must make a just and rightful choice.
This is not a stage of evaluating the truthfulness or
otherwise of the allegations levelled by the
prosecution/complainant against the accused. Likewise, it is
not a stage for determining how weighty the defences raised
on behalf of the accused are. Even if the accused is
successful in showing some suspicion or doubt, in the
allegations levelled by the prosecution/complainant, it would
be impermissible to discharge the accused before trial. This
is so because it would result in giving finality to the
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accusations levelled by the prosecution/complainant, without
allowing the prosecution or the complainant to adduce
evidence to substantiate the same."
16. The proposition of law as set out above makes it
abundantly clear that the Court should be slow to grant the
relief of quashing a complaint at a pre-trial stage, when the
factual controversy is in the realm of possibility particularly
because of the legal presumption, as in this matter. What is
also of note is that the factual defence without having to
adduce any evidence need to be of an unimpeachable
quality, so as to altogether disprove the allegations made in
the complaint.
17. The consequences of scuttling the criminal process at a
pre-trial stage can be grave and irreparable. Quashing
proceedings at preliminary stages will result in finality
without the parties having had an opportunity to adduce
evidence and the consequence then is that the proper forum
i.e., the trial Court is ousted from weightage the material
evidence. If this is allowed, the accused may be given an
un-merited advantage in the criminal process. Also because
of the legal presumption, when the cheque and the signature
are not disputed by the appellant, the balance of
convenience at this stage is in favour of the
complainant/prosecution, as the accused will have due
opportunity to adduce defence evidence during the trial, to
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rebut the presumption."
13. At this stage, it is also fruitful to refer to the
judgment rendered by the Hon'ble Apex Court in the
case of S.P.Mani and Mohan Dairy V/s Dr.Snehalatha
Elangovan reported in 2022 SCC Online SC 1238, more
particularly, paragraphs 43 to 45, which read as under:
"43. In the case on hand, we find clear and specific
averments not only in the complaint but also in the
statutory notice issued to the respondent. There are specific
averments that the cheque was issued with the consent of
the respondent herein and within her knowledge. In our
view, this was sufficient to put the respondent herein to
trial for the alleged offence. We are saying so because the
case of the respondent that at the time of issuance of the
cheque or at the time of the commission of offence, she was
in no manner concerned with the firm or she was not in-
charge or responsible for day-to-day affairs of the firm
cannot be on the basis of mere bald assertion in this
regard. The same is not sufficient. To make good her case,
the respondent herein is expected to lead umimpeachable
and incontrovertible evidence. Nothing of the sort was
adduced by the respondent before the High Court to get the
proceedings quashed. The High Court had practically no
legal basis to say that the averments made in the complaint
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are not sufficient to fasten the vicarious liability upon the
respondent by virtue of Section 141 of the NI Act.
44. We may also examine this appeal from a different angle.
It is not in dispute, as noted above, that no reply was
given by the respondent to the statutory notice served upon
her by the appellant. In the proceedings of the present type,
it is essential for the person to whom statutory notice is
issued under Section 138 of the NI Act to give an
appropriate reply. The person concerned is expected to
clarify his or her stance. If the person concerned has some
unimpeachable and incontrovertible material to establish that
he or she has no role to play in the affairs of the company/
firm, then such material should be highlighted in the reply
to the notice as a foundation. If any such foundation is laid,
the picture would be more clear before the eyes of the
complainant. The complainant would come to know as to
why the person to whom he has issued notice says that he
is not responsible for the dishonour of the cheque. Had the
respondent herein given appropriate reply highlighting
whatever she has sought to highlight before us then
probably the complainant would have undertaken further
enquiry and would have tried to find out what was the
legal status of the firm on the date of the commission of
the offence and what was the status of the respondent in
the firm. The object of notice before the filing of the
complaint is not just to give a chance to the drawer of the
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cheque to rectify his omission to make his stance clear so
far as his liability under Section 138 of the NI Act is
concerned.
45. Once the necessary averments are made in the statutory
notice issued by the complainant in regard to the vicarious
liability of the partners and upon receipt of such notice, if
the partner keeps quiet and does not say anything in reply
to the same, then the complainant has all the reasons to
believe that what he has stated in the notice has been
accepted by the noticee. In such circumstances what more is
expected of the complainant to say in the complaint."
14. In view of above discussion as well as settled
position of law and after considering the facts as alleged
in the complaint filed under Section 138 of the NI Act
and that none of the petitioners of respective petitions
had given reply to notice issued under section 138 of NI
Act and that petitioners are signatories of cheques and
circumstances of the present case, I am of the opinion
that this is not a fit case to exercise the inherent
powers under Section 482 of the Code and quash the
impugned complaints as there are disputed question of
facts, which are required to be adjudicated by leading
evidence in trial. Let the trial Court decide all the
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contentions raised by the parties after giving proper
opportunity to the parties in the proceedings of trial of
respective criminal cases, in accordance with law and as
expeditiously as possible.
15. Resultantly, all these petitions are dismissed.
Rule is discharged.
(SANDEEP N. BHATT,J)
SRILATHA
