M/S Associate Dwelling P Ltd vs M K Abimanyu
2022 Latest Caselaw 4853 Kant

                            1



     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

           DATED THIS THE 16TH DAY OF MARCH, 2022

                          BEFORE

        THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

              CRIMINAL PETITION No.6836 OF 2020

                            C/W

              CRIMINAL PETITION No.6789 OF 2020

              CRIMINAL PETITION No.6837 OF 2020


IN CRIMINAL PETITION No.6836 OF 2020

BETWEEN:

1.   M/S ASSOCIATE DWELLING (P) LTD
     A COMPANY INCORPORATED UNDER
     THE COMPANIES ACT, 1956
     HAVING ITS REGISTERED OFFICE
     AT NO.302, 3RD FLOOR,
     DEVATHA PLAZA
     RESIDENCY ROAD
     BENGALURU - 560 025
     REPRESENTED BY ITS
     MANAGING DIRECTOR SRI P.K.RAJESH
     AND DIRECTOR
     MRS. SREEPRIYA RAJESH.

2.   SRI P.K.RAJESH
     MANAGING DIRECTOR
     M/S ASSOCIATE DWELLING (P) LTD
     A COMPANY INCORPORATED UNDER
     THE COMPANIES ACT, 1956
     HAVING ITS REGISTERED OFFICE AT
                             2



       NO.302, 3RD FLOOR, DEVATHA PLAZA
       RESIDENCY ROAD
       BENGALURU - 560 025.

3.     SMT.SREEPRIYA RAJESH
       DIRECTOR
       M/S ASSOCIATE DWELLING (P) LTD
       A COMPANY INCORPORATED UNDER
       THE COMPANIES ACT, 1956
       HAVING ITS REGISTERED OFFICE AT
       NO.302, 3RD FLOOR, DEVATHA PLAZA
       RESIDENCY ROAD
       BENGALURU - 560 025.
                                           ... PETITIONERS

(BY SRI SHIVARUDRAPPA SHETKAR, ADVOCATE)

AND:

SRI M.K.ABHIMANYU
AGED ABOUT 50 YEARS,
RESIDING AT NO.401
FLOT NO.269,
LA MAISON DE RAUSE APARTMENT,
DEFENCE COLONY, 100 FEET ROAD
OPPOSITE TO G.G.HOSPITAL
INDIRANAGAR
BENGALURU - 560 038.

                                           ... RESPONDENT

(BY SRI JOSE SABASTIAN, ADVOCATE)

     THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO SET ASIDE THE ORDER DATED 07.11.2019
ISSUING    SUMMONS    TO    THE    PETITIONERS   AND  ALL
CONSEQUENTIAL PROCEEDINGS, ON THE FILE OF XIX
ADDL.C.M.M.,   BENGALURU     IN   C.C.NO.24107/2019, VIDE
ANNEXURE-A.
                           3



IN CRIMINAL PETITION No.6789 OF 2020

BETWEEN:

1.   M/S ASSOCIATE DWELLING (P) LTD
     A COMPANY INCORPORATED UNDER
     THE COMPANIES ACT, 1956
     HAVING ITS REGISTERED OFFICE
     AT NO.302, 3RD FLOOR,
     DEVATHA PLAZA, RESIDENCY ROAD
     BENGALURU - 560 025
     REPRESENTED BY ITS
     MANAGING DIRECTOR SRI P.K.RAJESH
     AND DIRECTOR
     MRS. SREEPRIYA RAJESH.

2.   SRI P.K.RAJESH
     MANAGING DIRECTOR
     M/S ASSOCIATE DWELLING (P) LTD
     A COMPANY INCORPORATED UNDER
     THE COMPANIES ACT, 1956
     HAVING ITS REGISTERED OFFICE AT
     NO.302, 3RD FLOOR, DEVATHA PLAZA
     RESIDENCY ROAD
     BENGALURU - 560 025.

3.   SMT.SREEPRIYA RAJESH
     DIRECTOR
     M/S ASSOCIATE DWELLING (P) LTD
     A COMPANY INCORPORATED UNDER
     THE COMPANIES ACT, 1956
     HAVING ITS REGISTERED OFFICE AT
     NO.302, 3RD FLOOR, DEVATHA PLAZA
     RESIDENCY ROAD
     BENGALURU - 560 025.
                                           ... PETITIONERS
(BY SRI SHIVARUDRAPPA SHETKAR, ADVOCATE)
                             4



AND:

SRI M.K.ABHIMANYU
AGED ABOUT 50 YEARS,
RESIDING AT NO.401
FLOT NO.269,
LA MAISON DE RAUSE APARTMENT,
DEFENCE COLONY, 100 FEET ROAD
OPPOSITE TO G.G.HOSPITAL
INDIRANAGAR, BENGALURU - 560 038.
                                           ... RESPONDENT
(BY SRI JOSE SABASTIAN, ADVOCATE)

     THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO SET ASIDE THE ORDER DATED 04.10.2019
ISSUING    SUMMONS    TO    THE    PETITIONERS   AND  ALL
CONSEQUENTIAL PROCEEDINGS, ON THE FILE OF XIX
ADDL.C.M.M.,   BENGALURU     IN   C.C.NO.24103/2019, VIDE
ANNEXURE-A.

IN CRIMINAL PETITION No.6837 OF 2020

BETWEEN:

1.     M/S ASSOCIATE DWELLING (P) LTD
       A COMPANY INCORPORATED UNDER
       THE COMPANIES ACT, 1956
       HAVING ITS REGISTERED OFFICE
       AT NO.302, 3RD FLOOR,
       DEVATHA PLAZA
       RESIDENCY ROAD
       BENGALURU - 560 025
       REPRESENTED BY ITS
       MANAGING DIRECTOR SRI P.K.RAJESH
       AND DIRECTOR
       MRS. SREEPRIYA RAJESH.

2.     SRI P.K.RAJESH
       MANAGING DIRECTOR
       M/S ASSOCIATE DWELLING (P) LTD
                             5



       A COMPANY INCORPORATED UNDER
       THE COMPANIES ACT, 1956
       HAVING ITS REGISTERED OFFICE AT
       NO.302, 3RD FLOOR, DEVATHA PLAZA
       RESIDENCY ROAD
       BENGALURU - 560 025.

3.     SMT.SREEPRIYA RAJESH
       DIRECTOR
       M/S ASSOCIATE DWELLING (P) LTD
       A COMPANY INCORPORATED UNDER
       THE COMPANIES ACT, 1956
       HAVING ITS REGISTERED OFFICE AT
       NO.302, 3RD FLOOR, DEVATHA PLAZA
       RESIDENCY ROAD
       BENGALURU - 560 025.
                                           ... PETITIONERS

(BY SRI SHIVARUDRAPPA SHETKAR, ADVOCATE)

AND:

SRI M.K.ABHIMANYU
AGED ABOUT 50 YEARS,
RESIDING AT NO.401
FLOT NO.269,
LA MAISON DE RAUSE APARTMENT,
DEFENCE COLONY, 100 FEET ROAD
OPPOSITE TO G.G.HOSPITAL
INDIRANAGAR
BENGALURU - 560 038.
                                           ... RESPONDENT

(BY SRI JOSE SABASTIAN, ADVOCATE)

     THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO SET ASIDE THE ORDER DATED 07.11.2019
ISSUING    SUMMONS    TO    THE    PETITIONERS  AND   ALL
CONSEQUENTIAL PROCEEDINGS, ON THE FILE OF XIX
                                     6



ADDL.C.M.M.,      BENGALURU             IN    C.C.NO.24106/2019,           VIDE
ANNEXURE-A.

     THESE CRIMINAL PETITIONS COMING ON FOR ADMISSION
THIS DAY, THE COURT MADE THE FOLLOWING:

                                    ORDER

These criminal petitions arise out of three different

transactions between the same parties. Therefore, these petitions

are taken up together and considered in this common order.

2. The petitioners in all these petitions call in question

proceedings in C.C.Nos.24107 of 2019, 24106 of 2019 & 24103 of

2019 respectively, pending before the XIX Additional Chief

Metropolitan Magistrate, Bengaluru City, in taking cognizance of the

offence punishable under Section 138 of the Negotiable Instruments

Act, 1981 ('the Act' for short) and issuing summons against the

petitioners.

3. Heard Sri Shivarudrappa Shetkar, learned counsel for the

petitioners, Sri Jose Sebastian, learned counsel for the respondent

in all the three cases.

4. Brief facts leading to the filing of these petitions, as borne

out from the pleadings, are as follows:

The petitioners and the respondent enter into a Joint

Development Agreement ('JDA' for short) on 28-01-2015 and

Supplementary Agreement ('SA' for short) on 06-02-2015. Several

conditions of the JDA/SA bind the parties to the said agreements

and certain cheques were issued for different amounts at different

points in time in furtherance of the said agreements. Those

cheques were all honoured. Three particular cheques issued again

in furtherance of the JDA/SA resulted in them being dishonoured.

The dishonouring of cheques led to initiation of legal proceedings

against the petitioners by the respondent. Complaints invoking

Section 200 of the Cr.P.C. were registered against the petitioners

by the respondent on 05-10-2019 and 04-10-2019. The learned

Magistrate took cognizance of the offence and issued summons to

the petitioners on 07-11-2019 in all these cases. It is at that

juncture the petitioners have knocked the doors of this Court with

the present petitions.

5. The learned counsel appearing for the petitioners would

vehemently argue and contend that the cheques that were

dishonoured were issued for a particular purpose to be presented

after a particular event. The event not yet coming about, the

cheques not yet matured for their presentation. Pre-matured

cheques presented for realization were dishonoured in terms of the

conditions in the agreements and the Court could not have taken

cognizance and issues summons in the teeth of glaring facts in the

JDA/SA. In support of his contentions, the learned counsel placed

reliance on the judgments in SUNIL TODI & ORS. v. STATE OF

GUJARAT & ANOTHER1, SRIPATI SINGH v. STATE OF

JHARKHAND & ANOTHER2, SAMPELLY SATYANARAYANA RAO

v. INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY

LIMITED3, HMT WATCHES LIMITED v. M.A.ABIDA AND

ANOTHER4 and INDUS AIRWAYS PRIVATE LIMITED AND

OTHERS v. MAGNUM AVIATION PRIVATE LIMITED AND

ANOTHER5.

2021 SCC Online SC 1174

2021 SCC Online SC 1002

(2016) 10 SCC 458

(2015) 11 SCC 776

(2014) 12 SCC 539

6. On the other hand, the learned counsel representing the

respondent would submit that the cheques were in fact handed over

for a legally recoverable debt and the presumption under the Act

operates once the cheques are issued for such legally recoverable

debt. It is a matter for trial in which the petitioners will have to

come out clean as the cheques are admittedly dishonoured. He

would place reliance upon the judgments in ICDS LIMITED v.

BEENA SHABEER AND ANOTHER6, SRIPATI SINGH v. STATE

OF JHARKHAND & ANOTHER7 and SAMPELLY

SATYANARAYANA RAO v. INDIAN RENEWABLE ENERGY

DEVELOPMENT AGENCY LIMITED8.

7. I have given my anxious consideration to the submissions

made by the respective learned counsel and perused the material

on record.

8. Before embarking upon consideration of registration of

crime against the petitioners, it is germane to notice the SA, its

conditions and the initiation of legal proceedings against the

(2016) 6 SCC 426

(2021) SCC Online SC 1002

(2016) 10 SCC 458

petitioners. The SA between the parties took place on 06.02.2015.

As observed hereinbefore, there were several payments made by

way of cheques that were part of the conditions stipulated in the

JDA/SA and those were honoured. This fact is not in dispute.

Clause 6 of the SA reads as follows:

"6. The second party Developer as agreed to pay the Remaining Balance of Rs.1,04,37,500/- (Rupees One Crore Four Lakhs Thirty Seven Thousand Five Hundreds only) of Refundable and Non Refundable Deposits Towards Joint development of Schedule 'A' and Schedule 'B' properties as follows:

a) Rs.35,00,000/- (Rupees Thirty Five Lakhs only) by way of Cheque bearing No.826477 Dated ...... Drawn on Karnataka Bank Limited, Nehru Nagar Branch, Bengaluru. Subject to First party getting the Schedule 'A' and Schedule 'B' properties converted for Residential purposes.

b) Rs.35,00,000/- (Rupees Thirty Five Lakhs only) by Way of Cheque bearing No.826478 dated ....... drawn on Karnataka Bank Limited, Nehru Nagar Branch, Bangalore upon plan sanction by the concerned Authorities.

c) The remaining last installment amount of Rs.

34,37,500/- (Rupees Thirty four Lakhs Thirty Seven Thousand Five Hundred only) by way of cheque bearing No.826479 Dated........... Drawn on Karnataka Bank Limited, Nehru Nagar Branch, Bengaluru. Upon signing of agreement pertaining to apportionment and Identification of First and Second party's share."

The afore-quoted clause in the SA clearly states that the second

party developer has agreed to pay the remaining balance of

Rs.1,04,37,500/- of refundable and non-refundable deposits

towards joint development properties in the manner that is

indicated in the aforesaid clauses. The first of the cheque was

subject to the 1st party i.e., the complainant getting the Schedules

'A' & 'B' properties converted for residential purposes. The next

cheque was to be drawn upon plan sanctioned by the concerned

authority and the third cheque shall be presented on signing of

agreement pertaining to apportionment and identification of first

and second parties share. It is not in dispute that Schedules 'A' &

'B' properties as agreed to in the SA are yet to be converted for

residential purposes.

9. The next action would be sanction of plan after such

conversion and the further action of apportionment after signing of

the agreement. Therefore, it is imperative that first of the

conditions is to be complied with i.e., conversion for residential

purposes before presenting the cheque for realization. The learned

counsel for the petitioners submits that the event is yet to come

about. The properties are yet to get converted and the learned

counsel for the respondent though admits that conversion has not

yet happened submits that it was a mistake in the agreement.

Conversion generally has to happen at the hands of land owner and

not the developer but admits that the agreement is styled in that

fashion.

10. The result of violation of clause 6 noticed supra is,

registration of crime as the cheques that were presented were

dishonoured. Therefore, any mistake that has crept in, according to

the submissions of the learned counsel for the respondent cannot

now be looked into unless there is novation or alteration of the

contract, mutually agreed between the parties. Clause 6 of the SA

standing as it is, the cheques had to be presented event on event

and every event was linked to the first clause of SA, which was the

conversion of properties into residential purpose. The conversion

not happening even as on date not being in dispute, the cheques so

issued could not have been deposited as they have not yet matured

to be legally recoverable debt.

11. The cheques, even if they are issued as security deposit

or otherwise, can be presented and such presentation of cheques

resulting in dishonor would attract proceedings under Section 138

of the Act. The present event of non-honour of cheques was itself

edged by certain conditions. Therefore, this is a peculiar case where

the cheques had to be presented after them getting matured or

ripen for their presentation.

12. The further facts narrated with regard to termination of

JDA/SA and the notice with regard to appointment of an Arbitrator

by the petitioners is not the concern of this Court at this juncture.

It is for the parties to resolve their dispute before the Arbitrator or

otherwise. The issue concerns, the proceedings under Section 138

of the Act. In the teeth of the afore-narrated facts and the

conditions, the proceedings instituted by the complainant against

the petitioners are inappropriate as cheques had not yet ripen for

their presentation and had not yet become a legally recoverable

debt or a liability.

13. It is now germane to consider the judgments relied on by

the respective learned counsel. In the judgment of SUNIL TODI

(supra), the Apex Court while following entire spectrum of law with

regard to the proceedings under the Act, has held as follows:

"30. Thus, the term debt also includes a sum of money promised to be paid on a future day by reason of a present obligation. A post-dated cheque issued after the debt has been incurred would be covered by the definition of 'debt'. However, if the sum payable depends on a contingent event, then it takes the color of a debt only after the contingency has occurred. Therefore, in the present case, a debt was incurred after the second respondent began supply of power for which payment was not made because of the non-acceptance of the LCs'. The issue to be determined is whether Section 138 only covers a situation where there is an outstanding debt at the time of the drawing of the cheque or includes drawing of a cheque for a debt that is incurred before the cheque is encashed."

(Emphasis supplied)

Though the Apex Court in the aforesaid judgment considers entire

spectrum of law and holds that the cheques given as security or for

deposit also would incur proceedings under Section 138 of the Act,

what is also held as extracted hereinabove is, if the sum payable on

a contingent event then it takes the colour of debt only after the

contingency has occurred. Therefore, the contingency in the case

on hand had not yet occurred for the complainant to present the

cheques. The Apex Court again in SRIPATI SINGH (supra)

following earlier judgments holds as follows:

"19. In the background of the factual and legal position taken note supra, in the instant facts, the appellant cannot be non−suited for proceeding with the complaint filed under Section 138 of N.I. Act merely due to the fact that the cheques presented and dishonoured are shown to have been issued as security, as indicated in the loan agreement. In our opinion, such contention would arise only in a circumstance where the debt has not become recoverable and the cheque issued as security has not matured to be presented for recovery of the amount, if the due date agreed for payment of debt has not arrived. In the instant facts, as noted, the repayment as agreed by the respondent No.2 is during June/July 2015. The cheque has been presented by the appellant for realisation on 20.10.2015. As on the date of presentation of the cheque for realisation the repayment of the amount as agreed under the loan agreement had matured and the amount had become

due and payable. Therefore, to contend that the cheque should be held as security even after the amount had become due and payable is not sustainable. Further, on the cheques being dishonoured the appellant had got issued a legal notice dated 21.11.2015 wherein inter−alia it has been stated as follows:−

"You request to my client for loan and after accepting your word my client give you loan and advanced loan and against that you issue different cheque all together valued Rs. One crore and my client was also assured by you will clear the loan within June/July 2015 and after that on 26.10.2015 my client produce the cheque for encashment in H.D.F.C. Bank all cheque bearing No.402771 valued Rs. 25 Lakh, 402770 valued Rs.25 lakh, 402769 valued Rs. 50 lakh, (total rupees one crore) and above numbered cheques was returned with endorsement "In sufficient fund". Then my client feel that you have not fulfil the assurance."

(Emphasis supplied)

The Apex Court holds that the contention with regard to cheque

being dishonoured and its justification or otherwise, would arise in a

circumstance where the debt has not become recoverable and the

cheque issued as security has not matured to be presented for

recovery of the amount. If the due date as per the terms of

agreement for payment has not yet arrived, it does not become a

matured event to initiate proceedings under the Act; same is the

case at hand, as explained hereinabove. The Apex Court in the

case of INDUS AIRWAYS (supra) has delineated the concept of

debt of a legally enforceable debt and not otherwise and holds as

follows:

"7. Section 138 of the N.I. Act is as follows:

138. Dishonour of cheque for insufficiency, etc., of funds in the account. - Where any cheque drawn by a person on an account 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 be extended to two years, 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 in due 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 cheque 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 be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Explanation. - For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability.

.... ..... .... ...... ..... .....

15. The above reasoning of the Delhi High Court is clearly flawed inasmuch as it failed to keep in mind the fine distinction between civil liability and criminal liability under Section 138 of the N.I.Act. If at the time of entering into a contract, it is one of the conditions of the contract that the purchaser has to pay the amount in advance and there is breach of such condition then purchaser may have to make good the loss that might have occasioned to the seller but that does not create a criminal liability under Section 138. For a criminal liability to be made out under Section 138, there should be legally enforceable debt or other liability subsisting on the date of drawal of the cheque. We are unable to accept the view of the Delhi High Court that the

issuance of cheque towards advance payment at the time of signing such contract has to be considered as subsisting liability and dishonour of such cheque amounts to an offence under Section 138 of the N.I. Act. The Delhi High Court has traveled beyond the scope of Section 138 of the N.I. Act by holding that the purpose of enacting Section 138 of the N.I. Act would stand defeated if after placing orders and giving advance payments, the instructions for stop payments are issued and orders are cancelled. In what we have discussed above, if a cheque is issued as an advance payment for purchase of the goods and for any reason purchase order is not carried to its logical conclusion either because of its cancellation or otherwise and material or goods for which purchase order was placed is not supplied by the supplier, in our considered view, the cheque cannot be said to have been drawn for an existing debt or liability.

16. In our opinion, the view taken by Andhra Pradesh High Court in Swastik Coaters (P) (1997 Cri LJ 1942 (AP), the Madras High Court in Balaji Seafoods [(1999) 1 CTC 6 (Mad)], the Gujarat High Court in Shanku Concretes (2000 Cri LJ 1988 (Guj) and the Kerala High Court in Ullas (2006 Cri LJ 4330 (Ker) is the correct view and accords with the scheme of Section 138 of the N.I. Act. The view taken by Delhi High Court is plainly wrong and does not deserve acceptance."

The case in INDUS AIRWAYS (supra) was issuance of cheque for

supply of goods. While dealing with cases arising out of the Act, in

exercise of jurisdiction of this Court under Section 482 of Cr.P.C.,

the Apex Court in the case of HMT WATCHES (supra), following

the earlier judgments has held as follows:

"11. In Suryalakshmi Cotton Mills Limited v. Rajvir Industries Limited and others[1], this Court has made following observations explaining the parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure: -

"17. The parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure is now well settled. Although it is of wide amplitude, a great deal of caution is also required in its exercise. What is required is application of the well-known legal principles involved in the matter.

xxx xxx xxx

22. Ordinarily, a defence of an accused although appears to be plausible should not be taken into consideration for exercise of the said jurisdiction. Yet again, the High Court at that stage would not ordinarily enter into a disputed question of fact. It, however, does not mean that documents of unimpeachable character should not be taken into consideration at any cost for the purpose of finding out as to whether continuance of the criminal [pic]proceedings would amount to an abuse of process of court or that the complaint petition is filed for causing mere harassment to the accused. While we are not oblivious of the fact that although a large number of disputes should ordinarily be determined only by the civil courts, but criminal cases are filed only for achieving the ultimate goal, namely, to force the accused to pay the amount due to the complainant immediately. The courts on the one hand

should not encourage such a practice; but, on the other, cannot also travel beyond its jurisdiction to interfere with the proceeding which is otherwise genuine. The courts cannot also lose sight of the fact that in certain matters, both civil proceedings and criminal proceedings would be maintainable."

(Emphasis supplied)

Thus, the law with regard to such interference in the proceedings

under the Act is that, if documents of unimpeachable character are

shown to the Court, the Court has to take that into consideration,

as further proceedings should lead to a ground of harassment to

the accused. It is the same view of the Apex Court in the case of

SAMPELLY SATYANARAYA RAO (supra), wherein it is held as

follows:

"14. In HMT Watches Ltd. v. M.A. Abida [HMT Watches Ltd. v. M.A. Abida, (2015) 11 SCC 776 :

(2015) 4 SCC (Cri) 552] , relied upon on behalf of the respondent, this Court dealt with the contention that the proceedings under Section 138 were liable to be quashed as the cheques were given as "security" as per defence of the accused. Negativing the contention, this Court held: (SCC pp. 779-80, paras 10-12)

"10. Having heard the learned counsel for the parties, we are of the view that the accused (Respondent 1) challenged the proceedings of criminal complaint cases before the High Court, taking factual defences. Whether the cheques

were given as security or not, or whether there was outstanding liability or not is a question of fact which could have been determined only by the trial court after recording evidence of the parties. In our opinion, the High Court should not have expressed its view [M.A. Abida v. HMT Watches Ltd., 2014 SCC OnLine Ker 3842 : (2014) 2 KLJ 40] on the disputed questions of fact in a petition under Section 482 of the Code of Criminal Procedure, to come to a conclusion that the offence is not made out. The High Court has erred in law in going into the factual aspects of the matter which were not admitted between the parties. The High Court further erred in observing that Section 138(b) of the NI Act stood uncomplied with, even though Respondent 1 (accused) had admitted that he replied to the notice issued by the complainant. Also, the fact, as to whether the signatory of demand notice was authorised by the complainant company or not, could not have been examined by the High Court in its jurisdiction under Section 482 of the Code of Criminal Procedure when such plea was controverted by the complainant before it.

11. In Suryalakshmi Cotton Mills Ltd. v. Rajvir Industries Ltd. [Suryalakshmi Cotton Mills Ltd. v. Rajvir Industries Ltd., (2008) 13 SCC 678 : (2009) 3 SCC (Cri) 824] , this Court has made the following observations explaining the parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure: (SCC pp. 685-87, paras 17 &

22)

'17. The parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure is now well settled. Although it

is of wide amplitude, a great deal of caution is also required in its exercise. What is required is application of the well- known legal principles involved in the matter.

***

22. Ordinarily, a defence of an accused although appears to be plausible, should not be taken into consideration for exercise of the said jurisdiction. Yet again, the High Court at that stage would not ordinarily enter into a disputed question of fact. It, however, does not mean that documents of unimpeachable character should not be taken into consideration at any cost for the purpose of finding out as to whether continuance of the criminal proceedings would amount to an abuse of process of court or that the complaint petition is filed for causing mere harassment to the accused. While we are not oblivious of the fact that although a large number of disputes should ordinarily be determined only by the civil courts, but criminal cases are filed only for achieving the ultimate goal, namely, to force the accused to pay the amount due to the complainant immediately. The courts on the one hand should not encourage such a practice; but, on the other, cannot also travel beyond its jurisdiction to interfere with the proceeding which is otherwise genuine. The courts cannot also lose sight of the fact that in certain matters, both civil proceedings and criminal proceedings would be maintainable.'

12. In Rallis India Ltd. v. Poduru Vidya Bhushan [Rallis India Ltd. v. Poduru Vidya Bhushan, (2011) 13 SCC 88 : (2012) 3 SCC (Civ) 269 : (2012) 1 SCC (Cri) 778] , this Court expressed its views on this point as under: (SCC p. 93, para 12)

'12. At the threshold, the High Court should not have interfered with the cognizance of the complaints having been taken by the trial court. The High Court could not have discharged the respondents of the said liability at the threshold. Unless the parties are given opportunity to lead evidence, it is not possible to come to a definite conclusion as to what was the date when the earlier partnership was dissolved and since what date the respondents ceased to be the partners of the firm.'"

Insofar the judgments relied on by the learned counsel

appearing for the respondent, the factual differences should not be

looked into by the Court while dealing with a petition under Section

482 of the Cr.P.C. There can be no qualm about the principles so

laid down. The Apex Court in the very judgments holds as to what

is a debt. A document if so unimpeachable is produced, the Court

has to look into the same to avoid future harassment to the

accused. Therefore, in the considered view of this Court, the

cheques that were presented had not yet ripened to be presented

as they were on a particular contingency to be presented or they

were subject to conditions before presentation. Those conditions

admittedly have not come about as on the date the cheques were

presented. Therefore, the contingency has not even arrived at.

Presenting the cheques and initiating proceedings for dishonor of

cheques under the Act only results in harassment to the accused

and esoteric satisfaction to the complainant.

14. For the aforesaid reasons, I pass the following:

ORDER

(i) Criminal Petition Nos.6836, 6837 and 6789 of 2020 are allowed.

(ii) The proceedings in C.C.Nos.24107 of 2019, 24106 of 2019 & 24103 of 2019 respectively pending before the XIX Additional Chief Metropolitan Magistrate, Bangalore stand quashed.

(iii) The quashment of these proceedings will not come in the way of any pending proceedings between the parties.

(iv) The observations made in the course of this order would also not come in the way of any other proceedings pending between the parties.

Sd/-

JUDGE

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