Telangana High Court
Mirza Ghousia vs The State Of Telangana And Another on 19 October, 2022
Bench: K.Surender
HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
*****
Criminal Petitioner No.5126 OF 2019
Between:
Mirza Ghousia ... Petitioner
And
The State of Telangana
Rep. by Public Prosecutor and another. ... Respondents
DATE OF JUDGMENT PRONOUNCED: 19.10.2022
Submitted for approval.
THE HON'BLE SRI JUSTICE K.SURENDER
1 Whether Reporters of Local
newspapers may be allowed to Yes/No
see the Judgments?
2 Whether the copies of judgment
may be marked to Law Yes/No
Reporters/Journals
3 Whether Their
Ladyship/Lordship wish to see Yes/No
the fair copy of the Judgment?
__________________
K.SURENDER, J
2
* THE HON'BLE SRI JUSTICE K.SURENDER
+ CRL.P. No. 5126 of 2019
% Dated 19.09.2022
# Mirza Ghousia ... Petitioner
And
$ The State of Telangana
Rep. by Public Prosecutor and another ..Respondents
! Counsel for the Petitioner: Sri Asadulla Shareef
^ Counsel for the Respondent: Public Prosecutor.
>HEAD NOTE:
? Cases referred
1
(1995) 5 SCC 482
2 (1981) 2 SCC 246
3 AIR 1966 Madras 13
4 (1986) AIR 1571
3
THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION NO. 5126 OF 2019
ORDER:
1. This petition is filed to quash the proceedings against the
petitioner in CC No.302 of 2016 on the file of XXIV Special
Magistrate, Hyderabad.
2. The petitioner is accused in the complaint filed by the 2nd
respondent for the offence under Section 138 of the Negotiable
Instruments Act.
3. The case of the complainant is that the petitioner was an
employee of the complainant company and entered into an
agreement dated 15.10.2015 as she was selected for training in the
field of medical coding at the cost of the complainant company,
which was estimated at Rs.1.00 lakh. The complainant company
agreed to train the petitioner/accused in the field of medical coding
and bound herself to serve the complainant company for a period of
24 months from the date completion of said training programme. In
the event of the petitioner/accused resigning from the service
before the expiry of 24 months, the petitioner/accused agreed to
pay Rs.1.00 lakh towards compensatory damages. The said cheque
in question was taken as security at the time of entering into
agreement on 15.10.2015.
4. For the reason of the petitioner stopping from attending her
duties from 07.03.2016, the complainant requested her to report to
duty by addressing letter dated 10.03.2016. Since the letter was
ignored, the complainant company again addressed another letter
dated 13.04.2016 to pay an amount of Rs.1.00 lakh together with
interest and since the petitioner ignored the said letter also, cheque
was presented on 08.08.2016 and on the very same day, it was
returned for the reason of 'insufficient funds'.
5. The respondent/complainant to substantiate their claim as
legally enforceable debt of the cheque amount, has produced an
agreement dated 15.10.2015 and at the time of the said agreement,
the subject cheque was handed over to complainant company by
undertaking in the said agreement that the petitioner is liable to
the company a sum of Rs.1.00 lakh by way of compensatory
damages and it further states that employee/petitioner shall not
raise any dispute regarding the quantum of damages to be paid to
the company.
6. The said agreement is one sided agreement which entitles the
complainant company to recover an amount of Rs.1.00 lakh in the
event of termination of the employment within 24 months. The said
agreement, though entered into and signed by the
petitioner/accused, it cannot be held to be a valid agreement. The
said agreement empowers the company to take action against the
employee, who is the petitioner/accused herein. However, under no
circumstances it entitles the petitioner/employee/accused to seek
any remedy against the company in the event of the company
taking any action which would be inappropriate to the employee. It
is not as though that no remedy would be available if an employer
does any act in violation of the rights of an employee.
7. In Life Insurance Corporation of India v. Consumer Education
and Research Centre and others1, the Hon'ble Supreme Court has held
that "if a contract or a clause in a contract is found unreasonable or unfair
or irrational one must look to the relative bargaining power of the
contracting parties. In dotted line contracts there would be no occasion for
a weaker party to bargain or to assume to have equal bargaining power.
He has either to accept or leave the services or goods in terms of the dotted
line contract. His option would be either to accept the unreasonable or
unfair terms or forego the service forever. With a view to have the services
of the goods, the party enters into a contract with unreasonable or unfair
(1995) 5 SCC 482
terms contained therein and he would be left with no option but to sign the
contract".
8. In Superintendence Company of India (P) Ltd v. Sh. Krishan
Murgai2, Hon'ble Supreme Court held that "It is well settled that
employees covenants should be carefully scrutinized because there is
inequality of bargaining power between the parties; indeed no bargaining
power may occur because the employee is presented with a standard form
of contract to accepts or reject. At the time of the agreement, the employee
may have given little thought to the restriction because of his eagerness for
a job; such contracts "tempt improvident persons, for the sake of present
gain, to deprive themselves of the power to make future acquisitions, and
expose them to imposition and oppression."
9. In Lilly White v. Mannuswami3, it was observed that the terms of
the contract would be declared to be unreasonable if it is contradictory to
the purpose of entering into the contract or violates the public policy.
Over time and again, courts have refused to enforce unfair and
unreasonable contracts or clauses in contracts that are arbitrary and an
abuse of position due to the inequality in bargaining power. In case it
can be shown that the party was not in a disadvantaged position and
(1981) 2 SCC 246
AIR 1966 Madras 13
was not prevented from bargaining the terms, the contract will be
upheld.
10. In the case of Central Inland Water Transport Corporation
limited vs Brojo Nath Ganguly4 In this case, It was held that Contract
which are unconscionable, unfair, unreasonable and opposed to public
policy are void. Contractual terms of the employmentis stereotyped form
on "take it or leave it" basis detrimental to the employees, even if
accepted by the employees, liable to be declared void and inoperative on
these grounds.
11. In the present case, it is not made clear as to how the
employee/accused is outstanding amount of Rs.1.00 lakh. It is
mentioned in the agreement Ex.P1 that in the event of termination
of employment for any reason, the employee accused would be
liable.
12. Admittedly, the cheque was given initially towards security
and the company has failed to substantiate as to how the
petitioner/accused is due the amount of Rs.1.00 lakh. Specific
details have to be provided by the complainant/employer to show
that the outstanding amount either falls within the definition of
'debt or 'other liability'. Only because there is an agreement, which
was signed by the petitioner/accused by giving blank cheque
(1986) AIR 1571
stating that in the event of leaving the company, an amount of
Rs.1.00 lakh would be paid, would not amount to debt or other
liability as required under Section 138 of the Negotiable
Instruments Act.
13. For the said reasons, (i) the complainant failed to prove that
the amount of Rs.1.00 lakh covered by the cheque is outstanding
falling within the definition of debt or other liability, (ii) the
complaint also fails also for the reason of the liability arising out of
an invalid agreement.
14. In the result, the proceedings against the petitioner CC
No.302 of 2016 on the file of XXIV Special Magistrate, Hyderabad
are hereby quashed.
15. Accordingly, the Criminal Petition is allowed.
_________________
K.SURENDER, J
Date: 19.10.2022
Note: LR copy to be marked.
B/o.kvs
THE HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION No.5126 of 2019
Dt.19.10.2022
kvs
