Karnataka High Court
M/S Origin D- Fab Pvt Ltd vs Sri B N Ramachandra Reddy on 2 February, 2024
Author: K.Natarajan
Bench: K.Natarajan
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NC: 2024:KHC:4703
WP No. 10797 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE K.NATARAJAN
WRIT PETITION NO. 10797 OF 2022 (GM-RES)
BETWEEN:
1. M/S. ORIGIN D- FAB PVT LTD,
REGISTERED OFFICE AT NO.48
4TH B CROSS, NANDAGOKULA
INDUSTRIAL LAYOUT
NEAR MANJUSHREE GARMENTS
THIGALARAPALYA MAIN ROAD
BANGALORE - 560 058
REP BY ITS MANAGING DIRECTOR
MR. PADMARAJU G.
2. SRI. PADMARAJU G.
S/O LATE GOVINDARAJU,
AGED ABOUT 48 YEARS,
R/AT NO.77, 5TH CROSS
Digitally signed by
AASEEFA PARVEEN
OLD PENSION MAHOLA
Location: HIGH MYSORE ROAD BANGALORE - 560 018.
COURT OF
KARNATAKA ...PETITIONERS
(BY SRI. HARIKRISHNA S. HOLLA, ADVOCATE)
AND:
SRI B.N. RAMACHANDRA REDDY
S/O LATE V NARAYANAPPA
AGED ABOUT 47 YEARS
R/AT NO.2, KITES CLOSE BRADLEY
STOKE BRISTOL BS320BY
UNITED KINGDOM
REP BY HIS GPA HOLDER
-2-
NC: 2024:KHC:4703
WP No. 10797 of 2022
MR. B. N. NAGARAJA,
S/O LATE V NARAYANAPPA
AGED ABOUT 53 YEARS
NO.2, 6TH CROSS, DHANALAKSHMI
LAYOUT, VIRUPAKSHAPURA
BANGALORE - 560 097.
...RESPONDENT
(BY SRI. P.M. NARAYANA SWAMY, ADVOCATE)
THIS WP IS FILED UNDER ARTICLE 226 OF
CONSTITUTION OF INDIA READ WITH SECTION 482 OF CODE
OF CRIMINAL PROCEDURE PRAYING TO QUASH THE
PROCEEDINGS IN C.CNO.494/2021 BEFORE THE XV ACMM
COURT, BANGALORE ANNEXURE-F AS ILLEGAL.
THIS PETITION, COMING ON FOR ORDERS, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
This Writ Petition is filed by the petitioners/accused under
Article 226 of the Constitution of India read with Section
482 of Cr.P.C. for quashing of criminal proceedings in
C.C.No.494/2021 pending on the file of the XV ACMM
Court, Bengaluru, arising out of PCR No.10322/2020 filed by
the respondent for the offence punishable under Section 138 of
the Negotiable Instruments Act, 1881 (hereinafter referred to
as 'the N.I. Act' for short).
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2. Heard the arguments of the learned counsel for the
petitioners and the learned counsel for the respondent.
3. The case of the complainant before the Trial Court
is that the complainant is said to have invested huge amount
with the petitioner No.1/Company. Subsequently, a
Memorandum Of Understanding (hereinafter referred to as
'MOU' for short) was executed between the parties and to
discharge his liability/settlement, the petitioner is said to have
issued three cheques for a sum of Rs.82 lakhs, Rs.20 lakhs and
Rs.40 lakhs. The cheques issued by the petitioner for a sum of
Rs.82 lakhs and Rs.20 lakhs came to be dishonoured. Hence, a
complaint came to be filed before the Magistrate wherein the
learned Magistrate took cognizance of the offence punishable
under Section 138 of the N. I. Act., which is under challenge.
4. Learned counsel for the petitioners has seriously
contended that there is no legally liable debt payable by the
petitioner to the respondent. Both are the Directors of the
Company and the MOU is executed. The dispute is purely civil
in nature and the respondent cannot file a criminal case under
Section 138 of the N. I. Act and hence, continuation of the
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proceedings is abuse of process of law and liable to be
quashed.
5. Per contra, learned counsel for the respondent
submits that the respondent investigated the huge money with
the petitioner for investment in a Company, subsequently he
unable to continuing the business. Hence, there was a MOU of
business entered between the parties. Therefore, in order to
relieve from the business the petitioner issued three cheques
which were dishonoured and hence there is an offence under
Section 138 of the N.I. Act and contended that the case is
triable by the Magistrate. There is a cognizable case made out
against the petitioner for the offence punishable under Section
138 of the N.I.Act, which is legally liable to pay the debt by the
petitioner. Hence, prayed for dismissal of the petition.
6. Both the Counsels are relied upon by the Judgments
of the Hon'ble Supreme Court.
7. Having heard the arguments and perused the
records, especially the complaint filed by the respondent
wherein it has stated that the respondent and petitioner are
said to be started a business in the name and style of
'M/s.Origin Engineering Solutions'. The respondent is one of the
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Directors and he has invested huge amount in the Company.
Subsequently, the respondent said to be stay in abroad, he
unable to participate in the business and hence he wants to
relieve from the business and resigned from the post and the
MOU was executed between the parties on 13.01.2018. In the
said MOU, there was a mention of amount payable to the
respondent amounting to Rs.2,30,00,000/-. Out of which, the
loan amount obtained by the respondent was deduced for
Rs.85,00,000/- and remaining amount payable by the
petitioner was Rs.1,45,00,000/- towards the settlement of the
respondent from the business. Accordingly, Sl.No.2 and 3 of
the MOU is mentioned as under:
"2. The first party herein has issued a signed
and post-dated cheque to the second party herein, for
Rs.82,00,000/- (Rupees Eighty Two Lakhs Only),
bearing cheque No.794797 dated 15.01.2020, drawn
on State Bank of India., Papareddy Palya,
Nagarbhavi, Bengaluru - 560 072.
3. The first party herein has issued a signed and
post-dated cheque to the second party herein, for
Rs.20,00,000/- (Rupees Twenty Lakhs Only), bearing
Cheque No.794801, dated 15.06.d2020, drawn on
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State Bank of India, Papareddy Palya, Nagarbhavi,
Bengaluru - 560 072."
8. These two cheques have been presented for
encashment which were dishonourned. Hence, a complaint
came to be filed under Section 138 of the N.I. Act including
Section 200 of Cr.P.C. Though one more MOU was executed by
the parties for the purpose of payment of Rs.40,00,000/-
(Rupees Forty Lakhs only) which is a separate case said to be
filed by the respondent which is not before this Court.
9. Considering the MOU and the issuance was cheques
was categorically mentioned in the MOU, the cheque has been
issued by the petitioner towards the discharge of his legal
liability towards relieved the respondent from the post of
Director from a Company which is legally entitled by the
respondent. The cheques were mentioned in the MOU. The said
cheques were dishonoured. Therefore, Section 138 of the N.I.
Act clearly attracts. It cannot be said that it is civil in nature.
Therefore, the petitioners have not made out a case for
quashing the proceedings.
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Accordingly, this petition is liable to be dismissed and it is
dismissed.
Sd/-
JUDGE
DN/AP
