Citation : 2025 Latest Caselaw 758 P&H
Judgement Date : 13 January, 2025
Neutral Citation No:=2025:PHHC:003094
CRM M-6696 of 2022 (O&M) and connected cases -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
1. CRM M- 6696 of 2022
Date of Decision:-13.01.2025
Gaurav Gupta ... Petitioner
Versus
Sumita Jain ... Respondent
2. CRM M-17311 of 2021
Gaurav Gupta ...Petitioner
Versus
Sumita Jain ... Respondent
3. CRM M-39878 of 2021
Gaurav Gupta ...Petitioner
Versus
Sumita Jain ... Respondent
4 CRM M-39975 of 2021
Gaurav Gupta ...Petitioner
Versus
Sumita Jain ... Respondent
5. CRM M-50868 of 2021
Gaurav Gupta ...Petitioner
Versus
Sumita Jain ... Respondent
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6. CRM M-40044 of 2021
Gaurav Gupta ...Petitioner
Versus
Sumita Jain ... Respondent
7. CRM M-40086 of 2021
Gaurav Gupta ...Petitioner
Versus
Sumita Jain ... Respondent
8. CRM M-50866 of 2021
Gaurav Gupta ...Petitioner
Versus
Sumita Jain ... Respondent
9. CRM M-6706 of 2022
Gaurav Gupta ... Petitioner
Versus
Sumita Jain ... Respondent
10. CRM M-6725 of 2022
Gaurav Gupta ... Petitioner
Versus
Sumita Jain ... Respondent
11. CRM M- 21122 of 2023
Gaurav Gupta ... Petitioner
Versus
M/s Mahabir Parsad Lakmi Chand ... Respondent
CORAM : HON'BLE MR. JUSTICE N.S.SHEKHAWAT
Present : Mr. Ranjit Singh Kalra, Advocate
for the petitioner (s) in CRM M-39878-2021,
CRM-M-39975-2021, CRM-M-40044-2021,
CRM-M-40086-2021 and CRM M-17311-2021.
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Mr. Abhinav Aggarwal, Advocate
for the petitioner (s) in CRM M-50866-2021,
CRM M-21122-2023, CRM M-50868-2021,
CRM M-6696-2022, CRM M-6725-2022 and
CRM M-6706-2022.
Mr. Ketan Antil, Advocate, for the respondent.
N.S.SHEKHAWAT, J. (Oral)
1. This order shall dispose off above mentioned 11
petitions, i.e., CRM M-17311-2021, CRM M-39878 of 2021, CRM
M-39975 of 2021, CRM M-50868 of 2021, CRM M-40044 of 2021,
CRM M-40086 of 2021, CRM M-50866 of 2021,
CRM M-6706-2022, CRM M-6725-2022 and CRM M-6696-2022
titled as "Gaurav Gupta Vs. Sumita Jain", and
CRM M-21122-2023 titled as "Gaurav Gupta Vs. M/s Mahabir
Parsad Lakmi Chand", whereby, the petitioners have prayed for
quashing of the complaints filed under Section 138 of the Negotiable
Instruments Act 1881 as well as summoning orders passed by the
Court of Sub Divisional Judicial Magistrate, Ganaur, Sonepat and all
subsequent proceedings arising therefrom. Since, the litigation in all
the complaints is between the same parties and common questions of
law and facts are involved in all the petitions; consequently, all the
petitions are taken up together and are being disposed off
simultaneously by way of common judgment. For the facility of
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reference, the facts have been culled out from the petition, i.e.,
CRM M-6696 of 2022 titled as "Gaurav Gupta Vs. Sumita Jain".
2. A complaint under Section 138 read with Section 142 of
the Negotiable Instruments Act 1881 (hereinafter to be referred as 'the
Act') and read with Section 420 IPC was filed by the
respondent/complainant against the petitioner/accused, his father late
Shri Surinder Kumar Gupta and their firm M/s SSG Foods,
Gharaunda, District Karnal. The respondent/complainant alleged that
she was a commission agent at Ganaur and was running her firm by
the name of M/s Mahabir Parsad Lakmi Chand. The accused M/s SSG
Foods is a Rice Mill and the petitioner/accused had placed an order
for supply of paddy/rice from time to time. From 01.10.2018 to
31.03.2019, M/s SSG Foods, i.e., the accused/firm purchased a paddy
of worth Rs.3,65,75,940.80/-, on which M/s SSG Foods made a
payment of Rs.3,32,00,000/- and the remaining amount of
Rs.33,75,940.80/- was carried forward to the next financial year.
Again in the financial year 01.04.2019 to 31.03.2020, the accused
paid Rs.6,81,24,000/- out of total amount of Rs.11,02,32,431.80/-
leaving the total outstanding amount of Rs.4,21,08,431.80/-. The
accused also borrowed a sum of Rs.1,34.26 lacs from the complainant
as the accused were in dire need of money as their business was about
to shut down due to scarcity of money. In order to discharge their
liability, accused issued cheques bearing No. 077936 dated
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28.02.2020 of Rs. 25 lacs and cheque bearing No. 082844 dated
30.03.2020 for a sum of Rs. 25 lacs, both drawn on Oriental Bank of
Commerce at Gharaunda, District Karnal, in the name of the
complainant-company with the assurance that the same would be
encashed on its representation. The complainant presented the
cheques with her banker, but both the cheques were dishonoured and
returned to the complainant with the remarks "Funds Insufficient" and
"Payment stopped by the drawer", vide return memos dated
14.05.2020. Despite issuance of notice, the accused did not make
payment equal to the amount of dishonoured cheques and the
complainant filed complaint (Annexure P-4) before the Court of Sub
Divisional Judicial Magistrate, Ganaur, Sonepat. Vide the impugned
summoning order dated 20.10.2020, the petitioner and two other
accused were ordered to be summoned under Section 138 of the Act.
Challenging the validity of the summoning order dated 20.10.2020
(Annexure P-5), the petitioner has filed the present petition before this
Court.
3. Learned counsel for the petitioner submitted that the
petitioner has been illegally arrayed as an accused in the present case
as a proprietor/partner of the firm M/s SSG Foods, Gharaunda.
While referring to the registration certificate dated 07.09.2018
(Annexure P-1), learned counsel for the petitioner submitted that
M/s SSG Foods, Gharaunda, is a sole proprietorship firm, having its
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sole proprietor Surinder Kumar Gupta and he had already been
arrayed as an accused in the complaint. This clearly shows that the
petitioner had no role to play and has been falsely involved. Still
further, Surinder Kumar Gupta was the sole proprietor and he had
already expired on 03.08.2020. Learned counsel further referred to
both the cheques (Annexure P-2) and submitted that both the cheques
were issued by the sole proprietorship firm, i.e., M/s SSG Foods,
Gharaunda, and one cheque is having the signatures of Surinder
Kumar Gupta as its proprietor, whereas another cheque is having the
signatures of the present petitioner, as proprietor of M/s SSG Foods,
Gharaunda. Consequently, even if it is presumed that the petitioner
had signed a second cheque, then also no offence is made out against
the petitioner. As per the settled law, in the cases of dishonour of a
cheque issued by the proprietorship firm, the prosecution can be
launched only against its proprietor and not against the signatory of
the cheque. Still further, a person cannot be prosecuted only on the
ground that he was drawer of the cheque. Moreover, in the case of
dishonour of cheques issued by a proprietary concern, no employee of
the proprietary concern can be prosecuted and the liability under
Section 138 of the Act is only attracted against the proprietor of the
cheque. Still further, even if, the drawer of the cheque had expired, no
proceedings could be initiated against the legal heirs of the proprietor
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and only drawer of the cheque could be arrayed as a accused under
Section 138 of the Act.
4. On the other hand, learned counsel for the respondent
submitted that the respondent/complainant had always been dealing
with the present petitioner as well as his father Surinder Kumar
Gupta, who always claimed to be proprietor/partner of a firm
M/s SSG Foods Gharaunda. Even, in the complaint, it has been
repeatedly stated that the petitioner and his father had placed the order
for supply of paddy and they were running the business of M/s SSG
Foods Gharaunda. Even, in the entire complaint, specific allegations
with regard to the role and affairs of the firm M/s SSG Foods
Gharaunda have been levelled against the petitioner and he was
responsible for the conduct of business of the firm. Even, the money
was borrowed by the present petitioner and he and his father, were
running the day to day affairs of the firm. Learned counsel further
contended that since Surinder Kumar Gupta, father of the petitioner
was not maintaining good health, the petitioner had been solely
running the daily affairs of M/s SSG Foods Gharaunda and even prior
and after the death of Surinder Kumar Gupta, the petitioner was
incharge of the affairs and was solely conducting the business of
M/s SSG Foods Gharaunda. Even, his father expired on 03.08.2020.
Learned counsel further submitted that the fact that the petitioner was
incharge of the business of M/s SSG Foods Gharaunda is further
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corroborated from the fact that the in discharge of liability, the present
petitioner had issued an acknowledgement dated 02.06.2019
(Annexure R-1). Further, even from the cheques (Annexure R-2), it is
apparent that the present petitioner had singned one of the cheques as
the proprietor of M/s SSG Foods Gharaunda. Moreover, from the list
(Annexure R-2), it is also apparent that the petitioner had issued five
cheques in all in his capacity of proprietor of M/s SSG Foods
Gharaunda. Learned counsel further contended that the petitioner had
issued cheques, signining as proprietor of M/s SSG Foods Gharaunda
totaling to Rs. 1.1 crores whereas Surinder Kumar Gupta, his father
had signed/issued cheques worth Rs. 4.40 crores, who also signed as
proprietor. Thus, the cheques were issued by the petitioner and his late
father for the discharge/settlement of total liability of Rs. 5.50 crores
of M/s SSG Foods Gharaunda.
5. Learned counsel for the respondent/complainant further
submitted that the petitioner always claimed himself to be the
proprietor/partner of M/s SSG Foods Gharaunda and it was
categorically admitted by the petitioner in CRM M-31435 of 2020
titled as "Hari Krishan Gupta and others Vs. State of Haryana
and another" that his father had issued cheques to the respondent. He
also signed the cheques (Annexure R-3). Thus, the petitioner cannot
be permitted to state that the petitioner was not the proprietor of the
M/s SSG Foods Gharaunda. Still further, the fact that the petitioner is
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proprietor of M/s SSG Foods Gharaunda is established from the
perusal of the judgment dated 28.10.2020 in Civil Suit No. 217 of
2020, in which the petitioner had contested the suit in the capacity of
a legal representative of his deceased father, i.e., Surinder Kumar
Gupta as well as the authorized signatory/person of M/s SSG Foods
Gharaunda. Even, he was incharge of day to day affairs as well as
proprietorship of M/s SSG Foods Gharaunda, thus, he cannot escape
the liability for the cheques issued in discharge of liability of
M/s SSG Foods Gharaunda by taking advantage of technicalities of
law.
6. Learned counsel further contended that the petitioner had
not approached this Court with clean hands and the inherent
jurisdiction under Section 482 Cr.P.C. could not be exercised in
favour of a person, who approaches the Court by strategically and
selectively disclosing only a certain set of facts favouring him. In the
present case, the petitioner had repeatedly signed various documents,
by admitting himself to be the proprietor of M/s SSG Foods
Gharaunda and now he is estopped from raising any such argument
before this Court. Still further, the petitioner had entered into a
memorandum of understanding (Annexure R-4) with the respondent,
wherein, he acknowleded his liability towards the respondent to the
tune of Rs. 5.50 crores. The said memorandum of understanding is
dated 02.03.2022, i.e., much after filing of the present petition, where
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he was claiming that he is not the properitor of the firm M/s SSG
Foods Gharaunda. Thus, the petitions deserve to be dismissed by this
Court.
7. I have heard learned counsel for the parties and perused
the record.
8. The provisions of Section 138 and Section 141 of the
Act are reproduced as under:-
"Section 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 provision 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-
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(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."
"Section 141. Offences by companies.
(1) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly."
Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence.
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Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation - For the purposes of this Section.-
(a) "company " means any body corporate and includes a firm or other association of individuals; and
(b) "director", in relation to a firm means a partner in the firm."
9. As per the provisions of Section 138 of the Act, the
drawer of the cheque shall be deemed to have committed the offence,
when the cheque drawn by him is returned unpaid on certain grounds
mentioned in the Act. Thereafter, certain conditions precedent and the
conditions subsequent are also provided by the statute. Upon
fulfillment of these requirements, the commission of offence of
"dishonour of cheque" is stated to be complete. By virtue of
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provisions of Section 141 of the Act, the guilt for the offence and the
liability to be prosecuted and punished is extended to every person,
who, at the time of offence was committed, was incharge of and was
responsible to the company for the conduct of its business,
irrespective of the fact whether such person was a director, manager,
secretary or other officer of the company. Such responsible person, in
order to be exonerated in terms of the first proviso to prove that the
offence was committed without his knowledge and despite his due
diligence. The important feature in sub-Section 1 of the Act is control
of a responsible person over the affairs of the company rather than his
holding of an office or his designation. While the liability under
sub-Section 2 arises out of holding an office and consent, connivance
or neglect of the persons, covered by sub-section (1) and (2) are liable
to be prosecuted and also punished upon the prove of their being
either incharge of and responsible to the company in the conduct of its
business or of their holding of the office and having been guilty of
consent, connivance or neglect, in the matter of commission of the
offence by the company. The persons covered by Section (1) may
escape the punishment only if he proves that the offence was
committed without his knowledge or despite his due diligence. While
interpenetrating the provisions of Sections 138 and 141 of the Act in
Criminal Appeal No. 1586 of 2022 [arising out of Special Leave
Appeal (Criminal) No. 9811 of 2021] titled as S.P. Mani and
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Mohan Dairy Vs. Dr. Snehalatha Elangovan decided on
16.09.2022, the Hon'ble Supreme Court has held as follows:-
"33. Thus, the legal principles discernible from the aforesaid decision of this Court may be summarised as under:-
(a) Vicarious liability can be fastened on those who are incharge of and responsible to the company or firm for the conduct of its business. For the purpose of Section 141, the firm comes within the ambit of a company;
(b) It is not necessary to reproduce the language of Section 141 verbatim in the complaint since the complaint is required to be read as a whole;
(c) If the substance of the allegations made in the complaint fulfil the requirements of Section 141, the complaint has to proceed in regards the law.
(d) In construing a complaint a hyper-technical approach should not be adopted so as to quash the same.
(e) The laudable object of preventing bouncing of cheques and sustaining the credibility of commercial transactions resulting in the enactment of Sections 138 and 141 respectively should be kept in mind by the Court concerned.
(f) These provisions create a statutory presumption of dishonesty exposing a person to criminal liability if payment is not made within the statutory period even after the issue of notice.
(g) The power of quashing should be exercised very sparingly and where, read as a whole, the factual
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foundation for the offence has been laid in the complaint, it should not be quashed.
(h) The Court concerned would owe a duty to discharge the accused if taking everything stated in the complaint is correct and construing the allegations made therein liberally in favour of the complainant, the ingredients of the offence are altogether lacking".
xxxx xxxxx xxxx xxx
47. Our final conclusions may be summarised as under:-
a.) The primary responsibility of the complainant is to make specific averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no legal requirement for the complainant to show that the accused partner of the firm was aware about each and every transaction. On the other hand, the first proviso to subsection (1) of Section 141 of the Act clearly lays down that if the accused is able to prove to the satisfaction of the Court that the offence was committed without his/her knowledge or he/she had exercised due diligence to prevent the commission of such offence, he/she will not be liable of punishment.
b.) The complainant is supposed to know only generally as to who were in charge of the affairs of the company or firm, as the case may be. The other administrative matters would be within the special knowledge of the company or the firm and those who are in charge of it. In such circumstances, the complainant is expected to allege that the persons named in the complaint are in
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charge of the affairs of the company/firm. It is only the Directors of the company or the partners of the firm, as the case may be, who have the special knowledge about the role they had played in the company or the partners in a firm to show before the court that at the relevant point of time they were not in charge of the affairs of the company. Advertence to Sections 138 and Section 141 respectively of the NI Act shows that on the other elements of an offence under Section 138 being satisfied, the burden is on the Board of Directors or the officers in charge of the affairs of the company/partners of a firm to show that they were not liable to be convicted. The existence of any special circumstance that makes them not liable is something that is peculiarly within their knowledge and it is for them to establish at the trial to show that at the relevant time they were not in charge of the affairs of the company or the firm.
c.) Needless to say, the final judgement and order would depend on the evidence adduced. Criminal liability is attracted only on those, who at the time of commission of the offence, were in charge of and were responsible for the conduct of the business of the firm. But vicarious criminal liability can be inferred against the partners of a firm when it is specifically averred in the complaint about the status of the partners `qua? the firm. This would make them liable to face the prosecution but it does not lead to automatic conviction. Hence, they are not adversely prejudiced if they are eventually found to be not guilty, as a necessary consequence thereof would be acquittal.
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d.) If any Director wants the process to be quashed by filing a petition under Section 482 of the Code on the ground that only a bald averment is made in the complaint and that he/she is really not concerned with the issuance of the cheque, he/she must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his/her contention. He/she must make out a case that making him/her stand the trial would be an abuse of process of Court".
10. In the present case also, it has been specifically pleaded
that the respondent/complainant had been dealing with the petitioner
as well as his father Surinder Kumar Gupta, who died after issuing the
cheques and was not even maintaining good health at the time of
issuance of cheques in question. Even, the petitioner had always been
projecting himself to be the proprietor/partner of the firm M/s SSG
Foods Gharaunda, which is also apparent from a written
acknowledgment dated 02.06.2019 (Annexure R-1), which was issued
by him, prior to issuance of the present cheques in the present case.
Still further, one cheque in the present case, i.e., cheque No. 082844
was issued by the petitioner on 30.03.2020 in his capacity as
proprietor of M/s SSG Foods Gharaunda. Apart from that, it is also
evident from (Annexure R-2) that the petitioner had issued total five
cheques in his capacity as proprietor of M/s SSG Foods Gharaunda.
Still further, even after filing of the present petition before this Court,
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the petitioner entered into a memorandum of understanding with the
present respondent/complainant, wherein, he acknowledged his
liability towards the respondent of Rs. 5.50 crores and had appended
his signatures on that. Thus, it is apparent that the complainant had
reasons to believe that the petitioner was incharge of the affairs of the
firm and he had always projected himself as the proprietor of
M/s SSG Foods Gharaunda and cannot be permitted to raise such
argument before this Court. The petitioner was apparently incharge
of and was responsible for the conduct of the business of the firm
M/s SSG Foods Gharaunda and both the parties may lead their
respective evidence before the trial Court in that direction.
11. In the present case, the petitioner had vehemently argued
that from the registration certificate (Annexure P-1), it can be easily
inferred that firm M/s SSG Foods Gharaunda was the sole
proprietorship firm and Mr. Surinder Kumar Gupta, i.e., the father of
the petitioner was the sole proprietor of the firm whereas on the other
hand, the respondent has clearly shown that there was sufficient
evidence on record to prove that the petitioner was also proprietor of
the firm M/s SSG Foods Gharaunda. Moreover, there was prima
facie evidence to show that the petitioner was incharge of and was
responsible for the conduct of the business of M/s SSG Foods
Gharaunda. In fact, the disputed questions of facts are involved in the
present case, which need to be adjudicated after the parties adduced
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evidence in the complaint under Section 138 of the Act. The law is
well settled that the legal presumption of the cheque having been
issued in the discharge of liability must also receive due weightage. In
a situation where the accused moves the Court for quashing of the
complaint even before the trial had formally commenced, the Court's
approach should be careful enough not to premarturely extingish the
case by disregarding the legal presumption which supports the
complaint. Even such presumption is in the nature of rebutable
presumption and the accused can always raise a defence, wherein, the
existence of a legal enforceable debt or liability can be contested.
While dealing with the parameters of invoking the inherent
jurisdiction of the Court, while quashing the criminal proceedings
under Section 482 Cr.P.C., the Hon'ble Supreme Court has held in the
matter of State of Haryana Vs. Bhajan Lal AIR 1992 SC 604 as
follows:-
"103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice."
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12. Still further, the Hon'ble Supreme Court of India has
held in the matter of Rajiv Thapar Vs. Madan Lal Kapoor (2013) 3
SCC 330 as follows:-
"28. The High Court, in exercise of its jurisdiction under section 482 CrPC, 1973 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 accusations levelled by the prosecution/complainant, without allowing the prosecution or the complainant to adduce evidence to substantiate the same."
13. In view of the above discussion, it is apparent that the
disputed questions of fact are involved in the present case and this
Court should be slow in granting the relief of quashing of complaint
at this pre trial stage as the consequence of quashing a criminal
process at a pre trial stage can be grave and irreparable. The quashing
proceedings at the initial stages will result in finality without the
parties have had an opportunity to adduce evidence and the
consequence is that the trial Court is ousted from weighing the
material evidence. If these petitions are allowed, the accused may be
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given an unmerited advantage in criminal process. Thus, at this stage,
this Court is not inclined to grant the relief of quashing of complaints
to the present petitioner. However, both the parties may lead their
respective evidence before the trial Court to prove their respective
claims.
14. Finding no merits, the petitions are ordered to be
dismissed.
15. I must add before parting that the observations have been
made in the above order only for the limited purpose for the disposal
of the quashing petitions and the trial Court is directed to decide the
case on merits, after appreciating the evidence led by both the parties.
16. All pending applications, if any, are disposed off,
accordingly.
13.01.2025 (N.S.SHEKHAWAT)
amit rana JUDGE
Whether reasoned/speaking : Yes/No
Whether reportable : Yes/No
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