Madras High Court

M.Murugan vs Sri Gokulam Chit & Finance Company ... on 27 June, 2022

                                                           Crl.OP.No.16398, 16425, 16426, and 16430 of 2020

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                      DATED:27.06.2022

                                                          CORAM:

                            THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN

                             Crl.O.P.Nos.16398, 16425, 16426 and 16430 of 2020
                                                     and
                     Crl.MP.Nos. 6309, 6310, 6337, 6338, 6339, 6340,6341 and 6342 of 2020



                     M.Murugan                                                 ... Petitioner
                                                                              (in all Crl.OPs)
                                                             Vs.


                     Sri Gokulam Chit & Finance Company Pvt Ltd.,
                     Udumalaipet Branch,
                     Represented by it's Commercial Manager,
                     and also Power Agent,
                     Mr.V.Prabhu                                   ... Respondent

(in all Crl.OPs)

COMMON PRAYER: Criminal Original Petition is filed under Section 482 of the Code of Criminal Procedure, to call for the records of STC.Nos. 682, 687, 685 and 686 of 2019 on the file of the Judicial Magistrate Court-I, Udumalaipet and quash the same.

                                     For Petitioner       : Mr.D.Nellaiappan
                                                              (in all Crl.OPs)
                                     For Respondent       : Mr.L.Rajasekar
                                                            (in all Crl.OPs)



https://www.mhc.tn.gov.in/judis

Crl.OP.No.16398, 16425, 16426, and 16430 of 2020

COMMON O R D E R

These Criminal Original Petitions have been filed to quash the

proceedings in STC.Nos.682, 687, 685 and 686 of 2019 on the file of

the Judicial Magistrate Court-I, Udumalaipet, thereby taken cognizance

for the offences under Sections 138 of Negotiable Instruments Act

(herein after referred as NI Act) as against the petitioner.

2. The respondent lodged a complaint alleging that the

respondent is running a Chit company viz., Sri Gokulam Chit & Finance

Company Pvt Ltd. The petitioner is the subscriber of the Chits under

ticket Nos.KDM/04, KDM/15, KDM/05 and KDM/05 in groups

G2H/3582, G2J/1224, G2J/1210 and G2H/3582 conducted by the

respondent. The value of the chits are Rs.5,00,000/-, Rs.10,00,000/-,

Rs.10,00,000/- and Rs.5,00,000/- and the monthly chit amounts are

Rs.25,000/-, Rs.50,000/- Rs.50,000/- and Rs.25,000/- and period of chits

are 20 months. The petitioner joined the chits on 27.05.2013, 19.01.2013,

29.12.2012 and 27.05.2013. The petitioner was a successful bidder in

the auctions on 27.08.2013, 27.08.2013, 25.04.2013 and 27.08.2013 and

https://www.mhc.tn.gov.in/judis Crl.OP.No.16398, 16425, 16426, and 16430 of 2020

received a sum of Rs.3,72,837/-, 7,45,674/-, Rs.7,45,674/- and

Rs.3,72,837/- as prize money. As a security for the due repayment of the

future subscriptions, the petitioner executed promissory notes in favour

of the respondent. The chits came to an end on 27.12.2014, 19.08.2014,

29.07.2014 and 27.12.2014. However, the petitioner has paid only a sum

of Rs.1,04,600/-, Rs.4,50,000/-, Rs.5,00,000/- and 1,02,700/- towards

the chit amount and the petitioner is liable to pay the balance sum of

Rs.3,95,400/-, Rs.5,50,000/- Rs.5,00,000/- and Rs.3,97,300/- as on

27.12.2014, 19.08.2014, 29.07.2014 and 27.12.2014 and a sum of

Rs.4,19,124/-, Rs.6,27,000/-, Rs.5,80,000/- and Rs.4,21,138/- towards

interest till June 2019. Totally a sum of Rs.8,14,524/-, Rs.11,77,000/-,

Rs.10,80,000/- and Rs.8,18,438/-. Therefore, the respondent caused

notices on 10.07.2019, 11.07.2019, 10.07.2019 and 10.07.2019 and on

receipt of the same he is said to have gone to the respondent's company

in person on 09.08.2018 and 08.08.2018 and requested the respondent to

reduce the interest. The respondent agreed the said requests and accepted

for the total balance of Rs.7,09,743/-, Rs.10,20,250/-, Rs.9,35,000/- and

Rs.7,13,180/- respectively. The respondent's company has accepted the

https://www.mhc.tn.gov.in/judis Crl.OP.No.16398, 16425, 16426, and 16430 of 2020

said amount and issued the cheque for the said amount. It was presented

for collection and the same was returned as dishonoured for the

reason“ insufficient funds” and thereafter, the respondent caused

statutory notice and filed the present complaint.

3. The learned counsel for the petitioner would submit that at the

time of payment of prize money, the respondent also received signatures

in the blank stamp papers and the petitioner also executed promissory

notes in favour of the respondent. The alleged cheque was issued for

security purpose and the petitioner never issued any cheque on any

demand, since there was no legallly enforceable debt.

4. A perusal of the records reveals that admittedly the petitioner

received prize money of Rs.3,72,837/- Rs.7,45,674/-, Rs.7,45,674/- and

Rs.3,72,837/- respectively. At the time of receiving prize money, the

petitioner executed promissory notes in favour of the respondent.

Thereafter, the petitioner failed to pay the monthly chit amounts and as

such, the respondent also caused notice on 10.07.2019, 11.07.2019,

https://www.mhc.tn.gov.in/judis Crl.OP.No.16398, 16425, 16426, and 16430 of 2020

10.07.2019 and 10.07.2019 respectively , it was also received by the

petitioner. Thereafter, the petitioner has visited the respondent and

agreed for a sum of Rs.7,09,743/- Rs.10,20,250/-, Rs.9,35,000/- and

Rs.7,13,180/- respectively and issued four cheques respectively.

Therefore, the cheques were issued for the legally enforceable debt and

not for any security purpose. Even assuming that the cheques were issued

for security purpose at the time of presentation of the cheques, the

petitioner was in due only for Rs.7,09,743/- Rs.10,20,250/-,

Rs.9,35,000/- and Rs.7,13,180/- respectively . Therefore, it was

construed that the alleged cheque was issued for enforceable debt and the

petitioner is liable to be punished for the offence under Section 138 of

N.I.Act.

5. In view of the above, this Court finds no grounds to quash the

complaints lodged by the respondent and these petitions are liable to be

dismissed.

https://www.mhc.tn.gov.in/judis Crl.OP.No.16398, 16425, 16426, and 16430 of 2020

6. It is relevant to rely upon the judgment of the Hon'ble Supreme

Court of India passed in Crl.A.No.579 of 2019 dated 02.04.2019 in the

case of Devendra Prasad Singh Vs. State of Bihar & Anr., as follows:-

" 12.So far as the second ground is concerned, we are of the view that the High Court while hearing the application under Section 482 of the Cr.P.C. had no jurisdiction to appreciate the statement of the witnesses and record a finding that there were inconsistencies in their statements and, therefore, there was no prima facie case made out against respondent No.2. In our view, this could be done only in the trial while deciding the issues on the merits or/and by the Appellate Court while deciding the appeal arising out of the final order passed by the Trial Court but not in Section 482 Cr.P.C. Proceedings.

https://www.mhc.tn.gov.in/judis Crl.OP.No.16398, 16425, 16426, and 16430 of 2020

13.In view of the foregoing discussion, we allow the appeal, set aside the impugned order and restore the aforementioned complaint case to its original file for being proceeded with on merits in accordance with law.

7. Recently, the Hon'ble Supreme Court of India dealing in

respect of the very same issue in Crl.A.No.1572 of 2019 dated

17.10.2019 in the case of Central Bureau of Invstigation Vs. Arvind

Khanna, wherein, it has been held as follows:

“19. After perusing the impugned order and on hearing the submissions made by the learned senior counsels on both sides, we are of the view that the impugned order passed by the High Court is not sustainable. In a petition filed under Section 482 of Cr.P.C., the High Court has recorded findings on several disputed facts and allowed the petition.

Defence of the accused is to be tested after appreciating the evidence during trial. The very fact that the High Court, in this case, went into the most minute details, on the allegations

https://www.mhc.tn.gov.in/judis Crl.OP.No.16398, 16425, 16426, and 16430 of 2020

made by the appellant-C.B.I., and the defence put-forth by the respondent, led us to a conclusion that the High Court has exceeded its power, while exercising its inherent jurisdiction under Section 482 Cr.P.C.

20.In our view, the assessment made by the High Court at this stage, when the matter has been taken cognizance by the Competent Court, is completely incorrect and uncalled for.”

8. Further the Hon'ble Supreme Court of India also held in the

order dated 02.12.2019 in Crl.A.No.1817 of 2019 in the case of

M.Jayanthi Vs. K.R.Meenakshi & anr, as follows:

"9. It is too late in the day to seek reference to any authority for the proposition that while invoking the power under Section 482 Cr.P.C for quashing a complaint or a charge, the Court should not embark upon an enquiry into the validity of the evidence available. All that the Court should see is as to whether there are allegations in the complaint which form the basis for the ingredients that

https://www.mhc.tn.gov.in/judis Crl.OP.No.16398, 16425, 16426, and 16430 of 2020

constitute certain offences complained of. The Court may also be entitled to see (i) whether the preconditions requisite for taking cognizance have been complied with or not; and (ii) whether the allegations contained in the complaint, even if accepted in entirety, would not constitute the offence alleged. ..............

13. A look at the complaint filed by the appellant would show that the appellant had incorporated the ingredients necessary for prosecuting the respondents for the offences alleged. The question whether the appellant will be able to prove the allegations in a manner known to law would arise only at a later stage...................."

The above judgments are squarely applicable to this case and as such, the

points raised by the petitioner cannot be considered by this Court under

Section 482 Cr.P.C.

https://www.mhc.tn.gov.in/judis Crl.OP.No.16398, 16425, 16426, and 16430 of 2020

9. In view of the above discussion, this Court is not inclined to

quash the proceedings in STC.Nos. 682, 687, 685 and 686 of 2019 on

the file of the Judicial Magistrate Court-I, Udumalaipet . However, the

trial Court is directed to complete the trial within a period of seven

months from the date of receipt of copy of this Order.

10. Accordingly, these criminal original petitions are dismissed.

Consequently, connected miscellaneous petitions are also closed.

27.06.2022