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Lords Creative Infra Solutions Pvt. Ltd. & Another v/s State of Uttarakhand & Another

    Crl. Misc. Appln. No. 2255 of 2019
    Decided On, 21 July 2020
    At, High Court of Uttarakhand
    By, THE HONOURABLE MR. JUSTICE RAVINDRA MAITHANI
    For the Petitioners: S.K. Jain, Senior Advocate. For the Respondent: R2, Rajendra Dobhal, Senior Advocate, Shubhash Tyagi Bharadwaj, D.A.G.


Judgment Text
Ravindra Maithani, J.

1. Challenge in this petition under Section 482 of the Code of Criminal Procedure, 1973 (for short “the Code”) is to an order dated 21.1.2019 passed in Complaint Case No. 8523 of 2018, M/s. Tanuk Pharma India Limited v. M/s. Lords Creative Infra Solutions Pvt. Ltd. and Others, by the Court of learned IVth Additional Chief Judicial Magistrate, Dehradun, District Dehradun (for short “the Case”). By this impugned order, the petitioners have been summoned under Sections 138 of the Negotiable Instruments Act, 1881 (for short “the Act”).

2. Heard learned Counsel for the parties through video conferencing and perused the record.

3. Facts necessary for disposal of the instant petition are as hereunder:

The respondent No. 2 filed a complaint under Section 138 of the Act against the petitioners. According to the complaint, the parties entered into an agreement on 28.9.2016. In pursuance thereof, a cheque amounting to Rs. 1 crore was given by the respondent No. 2 to the petitioners. When the petitioners did not honour the terms of the agreement, they gave a cheque of Rs. 1 crore to the respondent No. 2, which on presentation was dishonoured. Notice was given, but the amount of cheque was not paid. Hence, the present complaint has been filed. After conducting enquiry, by the impugned order, the petitioners and one another have been summoned under Section 138 of the Act. Aggrieved by it the instant petition has been filed.

4. Learned Senior Counsel for the petitioners would raise the following points in his submission:

(i) The summoning order is bad in the eyes of law because to arrive at a conclusion that prima facie, case is made out, the agreement was never perused by the Court; without perusal of the agreement, it could not have been detected that any terms of the agreement was ever violated by the petitioners.

(ii) It was a case of ‘stop payment’ and not a case of dishonour of cheque, due to insufficient funds.

(iii) The cheque was given as a security. The petitioners wanted the security cheque back from respondent No. 2. When the cheque was not returned by the respondent No. 2, in fact, the petitioners complained it to the Senior Superintendent of Police, District Alwar, Rajasthan.

(iv) It has not been shown that the cheque was given for discharge of any debt or liability.

(v) The agreement was executed in the year 2016, and on that date itself, the cheque was given as post-dated cheque. It has been pleaded by the petitioners in their petition, which reflects that, in fact, on the date when cheque was given, there was no existing debt or liability. In support of his contention leaned Counsel for the petitioners placed reliance on the principles of law as laid down by the Hon’ble Supreme Court in the case of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited, VII (2016) SLT 25=IV (2016) DLT (Cri.) 235 (SC)=(2016) 10 SCC 458.

(vi) Since, there was no existing debt or liability, there is no question of presumption under Section 139 of the Act.

(vii) In the proceedings under Section 482 of the Code, the Court should consider the documents to find out as to whether continuance of the criminal proceedings would amount to an abuse of process of Court. In support of his argument, learned Counsel has placed reliance on the principle of law as reported in the case of HMT Watches Ltd. v. M.A. Abida and Another, II (2015) BC 267 (SC)=II (2015) CCR 97 (SC)=III (2015) SLT 93.=(2015) 11 SCC 776. In para 11 of the judgment in the case of HMT Watches Ltd. (supra) the principles laid down in the case of Suryalakshmi Cotton Mills Ltd. v. Rajvir Industries Ltd.,I (2008) CCR 93 (SC)=I (2008) DLT (Cri) 329 (SC)=(2008) 13 SCC 678, has been referred to, wherein, it was inter alia, held that “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 criminal proceedings would amount to an abuse of process of Court....”

5. On behalf of the respondent learned Senior Counsel would argue that the cheque is not post-dated; parties entered into an agreement on 28.9.2016 and on that date, it is the respondent No. 2, who had given a cheque of Rs. 1 crore to the petitioners. When the petitioners did not honour the terms of the agreement, they issued the cheque. Therefore, it is argued that the cheque was given for the discharge of existing liability. It is also argued that even, if the cheque was given as security, it would attract the provisions of Section 138 of the Act and presumption under Section 139 of the Act could be raised. In support of his argument reliance has been placed to the principles laid down in the case of HMT Watches Ltd. (supra) wherein, it was inter alia, held whether the cheque was given as security or not, is a question of fact ‘which could have been determined only by the Trial Court after recording evidence of the parties’.

6. Learned Senior Counsel for the respondent No. 2 would also argue that in the proceedings under Section 482 of the Code, the disputed question of facts cannot be gone into and they may be decided at the trial. In support of his contention, learned Counsel has placed reliance on the principles of law as laid down by the Hon’ble Supreme Court in the case of A.R. Radha Krishna v. Dasari Deepthi and Others, (2019) 15 SCC 550. In the case of A.R. Radha Krishna, the Hon’ble Court emphasized the requirement of describing the role of Directors in cases under Section 138 of the Act.

7. Before the arguments are appreciated, it may be noted that there has been another argument, which is advanced by the learned Senior Counsel for the petitioners with regard to the judgment given in the case of HMT Watches Ltd. (supra). Learned Senior Counsel for the petitioners, on the one hand placed reliance on para 11 of the judgment in the case of HMT Watches Ltd. (supra), but on the other hand, after the arguments of the learned Senior Counsel for the respondent No. 2 were concluded, he would argue that the judgment in the case of HMT Watches Ltd. (supra) is per-incuriam, in view of the judgment in the case of Rajiv Thapar & Others v. Madan Lal Kapoor, I (2013) SLT 524=I (2013) CCR 433 (SC)=(2013) 3 SCC 330. When the Court requested learned Senior Counsel to tell as to how, it is per-incuriam, he would refer to para 29 of the judgment of Rajiv Thapar (supra), which is as hereunder:

“29. The issue being examined in the instant case is the jurisdiction of the High Court under Section 482, Cr.P.C., if it chooses to quash the initiation of the prosecution against an accused at the stage of issuing process, or at the stage of committal, or even at the stage of framing of charges. These are all stages before the commencement of the actual trial. The same parameters would naturally be available for later stages as well. The power vested in the High Court under Section 482, Cr.P.C., at the stages referred to hereinabove, would have far-reaching consequences inasmuch as it would negate the prosecution’s/complainant’s case without allowing the prosecution/complainant to lead evidence. Such a determination must always be rendered with caution, care and circumspection. To invoke its inherent jurisdiction under Section 482, Cr.P.C. the High Court has to be fully satisfied that the material produced by the accused is such that would lead to the conclusion that his/their defence is based on sound, reasonable, and indubitable facts; the material produced is such as would rule out and displace the assertions contained in the charges levelled against the accused; and the material produced is such as would clearly reject and overrule the veracity of the allegations contained in the accusations levelled by the prosecution/complainant. It should be sufficient to rule out, reject and discard the accusations levelled by the prosecution/complainant, without the necessity of recording any evidence. For this the material relied upon by the defence should not have been refuted, or alternatively, cannot be justifiably refuted, being material of sterling and impeccable quality. The material relied upon by the accused should be such as would persuade a reasonable person to dismiss and condemn the actual basis of the accusations as false. In such a situation, the judicial conscience of the High Court would persuade it to exercise its power under Section 482, Cr.P.C. to quash such criminal proceedings, for that would prevent abuse of process of the Court, and secure the ends of justice.”

8. A bare perusal of the above observation, in the case of Rajiv Thapar (supra), would reveal that it relates to the scope of the jurisdiction under Section 482 of the Code. In the case of HMT Watches Ltd. (supra), the Hon’ble Supreme Court discussed the jurisdiction of the High Court under Section 482 of the Code, vis-a-vis, Section 138 of the Act. How is it per-incuriam? Neither any statute nor any Law declared has been ignored by the Hon’ble Supreme Court in the case of HMT Watches Ltd. (supra). Not only these two cases, but there are number of cases dealing with the scope of the High Court under Section 482 of the Code. In the case of R.P. Kapoor v. State of Punjab, 1960 (SLT SOFT) 279=AIR 1960 SC 866, State of Haryana and Others v. Bhajan Lal and Others, I (2006) CCR 209 (SC)=1992 Supp (1) SCC 335 and in many other cases, guidelines have been laid down for exercising, the jurisdiction under Section 482 of the Code. In fact, the principles in regard to this matter have been culled out in the case of Indian Oil Corporation v. NEPC India Limited and Others, V (2006) SLT 475=III (2006) CCR 128 (SC)=(2006) 6 SCC 736 as follows:

“12. The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few—Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre, (1988) 1 SCC 692 : 1988 SCC (Cri) 234, State of Haryana v. Bhajan Lal , I (2006) CCR 209 (SC)=1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426, Rupan Deol Bajaj v. Kanwar Pal Singh Gill, (1995) 6 SCC 194 : 1995 SCC (Cri) 1059, Central Bureau of Investigation v. Duncans Agro Industries Ltd., (1996) 5 SCC 591 : 1996 SCC (Cri) 1045, State of Bihar v. Rajendra Agrawalla, 1996) 8 SCC 164 : 1996 SCC (Cri) 628, Rajesh Bajaj v. State NCT of Delhi, II (1999) SLT 523=II (1999) CCR 4 (SC)=(1999) 3 SCC 259 : 1999 SCC (Cri) 401, Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd., II (2000) SLT 414=I (2000) CCR 288 (SC)=(2000) 3 SCC 269 : 2000 SCC (Cri) 615, Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 : 2000 SCC (Cri) 786, M. Krishnan v. Vijay Singh, VII (2001) SLT 188=IV (2001) CCR 117 (SC)=(2001) 8 SCC 645 : 2002 SCC (Cri) 19 and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque, VI (2004) SLT 513=IV (2004) CCR 220 (SC)=(2005) 1 SCC 122 : 2005 SCC (Cri) 283.

The principles, relevant to our purpose are:

(i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused.

For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint.

(ii) A complaint may also be quashed where it is a clear abuse of the process of the Court, as when the criminal proceeding is found to have been initiated with mala fides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.

(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.

(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.

(v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.”

9. Merely, because the judgment of Rajiv Thapar case (supra) has not been referred to in the case of HMT Watches Ltd. (supra), the judgment in the case of HMT Watches Ltd. (supra) does not become per- incurium. Therefore the argument that the judgement in the case of HMT Watches Ltd. (supra) is per-incuriam has no force.

10. Undoubtedly, the jurisdiction under Section 482 of the Code is of wide magnitude and the principles, which governs the jurisdiction is to do complete justice. The principles are based on Quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsae esse non potest i.e. when the law gives anything to anyone, it gives also all those things, without which the thing itself would be unavailable. The section does not confer any new power. It is, in fact, to act ex debito justitiae, which means to do real and substantial justice for the administration of which, alone the Court exists [Dinesh Datt Joshi v. State of Rajasthan and Another, VII (2001) SLT 131=IV (2001) CCR 107 (SC)=(2001) 8 SCC 570 and Amit Kapoor v. Ramesh Chander, VII (2012) SLT 154=IV (2012) DLT (CRL.) 78 (SC)=IV (2012) CCR 99 (SC)=I (2013) DLT (Cri) 947=(2012) 9 SCC 460]. One of the principles, which govern the jurisdiction under Section 482 of the Code is that the disputed question of facts should not be generally gone into. But then instant is a case, which is little different than any other criminal case. The basic principle of criminal jurisprudence is ‘innocent until proved guilty’, but in the cases of presumption, there is “reverse evidentiary burden” on the accused.

11. In cases of legal presumption, the standard for establishing prima-facie case is different, because, once basic facts to raise presumptions are established the presumption clause would come into play. This presumption may be rebutted by the accussed by the standard of “preponderance of probabilities”. But, it is a matter for evidence during trial.

12. Instant is a case, which makes certain presumptions. It is a case under Section 138 of the Act. The Act makes certain presumptions with regard to Negotiable Instruments “that the holder is a holder in due course” it is given under Section 118 of the Act, which this Court need not reproduce. There is another very important section, which is Section 139 of the Act, which is as hereunder:

“Presumption in favour of holder—It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability.”

13. Reference has been made by learned Senior Counsel for the petitioners to the judgment in the case of Sampelly Satyanarayana Rao (supra) and specifically para 8 to it, in which the Hon’ble Supreme Court placed reliance in the judgment of Indus Airways Private Limited and Others v. Magnum Aviation Private Limited and Another, II (2014) BC 698 (SC)=IV (2014) SLT 321=II (2014) CCR 385 (SC)=2014(12) SCC 539.

14. In the case of Indus Airways (supra), a cheque was given as advanced payment for purchase of goods but the purchase order could not be carried out to its logical conclusion, under such circumstances the Hon’ble Supreme Court held that such cheque “cannot be said to have been drawn for an existing debt or liability”.

15. Instant is not a case of advance payment. According to the learned Senior Counsel for the petitioners himself, it was a cheque given as a security. Although according to the respondent No. 2, it was a cheque given for discharge of existing liability. It’s a question of fact, which is in dispute now.

16. The presumption if made under law, are to be rebutted. Though the legal burden always remains with the prosecution to prove its case beyond reasonable doubt, but once presumption is raised the onus shifts on the accussed to rebut it by the standard of “preponderance of probabilities”. There is no dispute about the fact that the cheque was given by the petitioners. There is no dispute that the respondent No. 2 was holder of the cheque in due course. It is this situation, which raises presumption under Section 139 of the Act. The following principles may be just considered in the context of Section 138 of the Act vis-a-vis Section 482 of the Code:

(i) At the initial stage, a plea of the accused cannot be entertained and accepted by the High Court to quash the complaint (Maruti Udyog Limited v. Narender and Others, (1999) 1 SCC 113.

(ii) The Court cannot go into the merits and/or come to a conclusion that there was no existing debt or liability. [M.M.T.C. Ltd. case (supra) para 13].

(iii) Applying the said definitions of “proved” or “disproved” to the principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon (M.S. Narayana Menon v. State of Kerala, III (2006) BC 433 (SC)=V (2006) SLT 252=III (2006) CCR 76 (SC)=(2006) 6 SCC 39 para 30).

(iv) There is no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability (M.M.T.C. Ltd. case (supra) para 17).

(v) Even though the cheque is dishonoured by reason of “stop payment” instruction, an offence under Section 138 of the Act could still be made out (M.M.T.C. Ltd. case (supra) para 19).

(vi) The presumption mandated by Section 138 of the Act, does indeed include the existence of a legally enforceable debt or liability. (Rangappa v. Sri Mohan, II (2010) BC 693 (SC)=IV (2010) SLT 56=II (2010) DLT (CRL.) 699 (SC)=II (2

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010) CCR 433 (SC)=(2010) 11 SCC 441 para 26) (vii) Whether the cheque was given as a security or not or whether there was an outstanding liability or not is a question of fact, which could have been determined only by the Trial Court, after recording the evidence of the parties. These aspects cannot be examined under Section 482 of the Code. (HMT Watches Ltd. (supra) para 10) 17. In the instant case, what is being argued is that the learned Court below did not peruse the agreement and without it, it could not have been detected that any condition of the agreement was violated or offence made out. This argument has no substance because it is a case under Section 138 of the Act; because the respondent No. 2 is holder in due course of the cheque; because there is a presumption under Section 139 of the Act that unless, the contrary is proved it shall be presumed that the holder of a cheque received the cheque in whole or in part for the discharge of any debt or liability; because “stop payment” also attracts the provision of Section 138 of the Act; because even if the cheque is given as security, and is dishonoured, it also attracts the provision of Section 138 of the Act. It may also be noted that disputed question of facts cannot be examined in the proceedings under Section 482 of the Code. 18. An argument has also been raised on behalf of learned Counsel for the petitioners that the presumption under Section 139 of the Act cannot be raised because the cheque was not given in discharge of any liability. As stated, in cases like the instant case, even the complainant need not write about the factum of the liability. He has categorically stated that he was given a cheque and he is holder in due course of the cheque. In view of the settled legal position, the presumption under Section 139 of the Act is automatically raised. Petitioners may have the liberty to rebut the presumption at the trial. 19. In view of what is stated hereinbefore, this Court is of the view that there is no merit in the petition and it deserves to be dismissed. 20. The instant petition is dismissed. Petition dismissed.
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