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Rishi Kumar & Another v/s Parle Biscuits Pvt. Ltd

    Crl. Misc. No. M-26928 of 2008

    Decided On, 26 May 2010

    At, High Court of Punjab and Haryana


    For the Petitioners: Kailash Chander, Advocate. For the Respondent: Rakesh Nehra, Advocate.

Judgment Text

Sabina, J.

This petition has been filed under Section 482 of the Code of Criminal Procedure (for short`Cr.P.C.') for quashing of criminal complaint No. 84 of 2005 (Annexure P16) under Section 138 of the Negotiable Instruments Act,1881 (`Act' for short) titled as `Parle Biscuits Pvt. Ltd. vs. Mr. Rishi Kumar', pending in the Court of Sub Divisional Judicial Magistrate Bahadurgarh.

The contents of the complaint (Anneuxre P16) read as under:-

?That the complainant company has been carrying on its business of manufacturing and marketing of its products like biscuits etc. from the above noted address.

That the complainant company supplied goods to the accused vide Invoice No. 21719 dated 21.07.2005 for Rs. 2,66,249/- and Invoice No.21736 dated 23.7.2005 for Rs. 289256/-. In lieu of the goods supplied to the accused issued Cheques bearing No. 0905126 dated 09.08.2005 for Rs.266249/- and Cheque No. 0908847 dated 09.08.2005 for Rs.289256/- in favour of the complainant Company drawn on the branch of State Bank of India, Karvi, Distt. Banda, U.P.

That the above mentioned Cheques were deposited in the Bank for realization and the same has been returned unpaid with the remarks ?A/c closed and Refer to Drawer.?

That the complainant company issued legal notice dated 09.09.2005 through its counsel. The notice were registered and the photocopy of all the relevant papers are attached herewith. That on dated 09.09.2005 the complainant company within 30 days from receiving of the information from its bankers about the dishonour of the cheque made a demand on the accused by the Registered notice for the payment of the amount of the said cheques by way of a demand within 15 days from the receipt of this notice, which are presumed to be received by the accused, copy of the postal receipts and legal notice and the cheques with the Banker's remarks are attached herewith.

That the statutory period of 15 days expired on dt. 24.9.05 their about but the accused despite the legal notices has not taken care to make the payment of the dishonoured cheques. That the accused issued the cheques in discharge of his liability and the accused has failed to make the payment within a statutory period of 15 days and in spite of the demand raised within the prescribed period, hence all the ingredients of section138 of the Negotiable Instruments Act, 1881 are satisfied and is liable to be punished as specified herein.?

Learned counsel for the petitioners has submitted that the blank cheques in question were issued in the year 2002 by way of security. Learned counsel has further submitted that the agreement between the parties (Annexure P1) was executed at Bombay. Petitioners are carrying on their business at Kanpur. The cheques in question were, allegedly, issued in favour of the complainant company drawn on the Branch of State Bank of India Karvi, District Banda, U.P. In these circumstances, no cause of action had arisen at Bahadurgah and, hence, the Court at Bahadurgarh has no jurisdiction to try the complaint in question. Learned counsel has placed reliance on M/s Harman Electronics (P) Ltd. and another vs. M/s National Panasonic India Ltd. 2009(1)RCR (Criminal) 458 wherein the Apex Court has held as under:-

?12. Indisputably, the parties had been carrying on business at Chandigarh. The Head Office of the complainant-respondent may be at Delhi but it has a branch office at Chandigarh. It is not in dispute that the transactions were carried on only from Chandigarh. It is further more not in dispute that the cheque was issued and presented at Chandigarh. The complaint petition is totally silent as to whether the said cheque was presented at Delhi. As indicated hereinbefore, the learned counsel appearing on behalf of the complainant-respondent contended that in fact the cheque was put in a drop box but as the payment was to be obtained from the Delhi Bank, it was sent to Delhi. In support of the said contention, a purported certificate issued by the City Bank NA has been enclosed with the counter affidavit, which reads as under:-

?This is to confirm that M/s National Panasonic India Pvt. Ltd. (NPI) having registered office at AB-11, Community Centre, Safdarjung Enclave, New Delhi-110029 are maintaining a Current Account No. 2431009 with our Bank at Jeevan Bharti Building, 3, Parliament Street, New Delhi-110001 only and not at any other place in India including, Chandigarh.

Further confirmed that CITI bank has provided the facility for collection of Cheques/Demand Drafts from branches of NPI located at various places/cities in India. However, all amounts of cheques/Demand Drafts so collected on behalf of National Panasonic India Private Limited are forwarded and debited/credited to the aforesaid Current Account no. 2431009 with our Bank at Jeeval Bharti Building, 3, Parliament Street New Delhi-110001.?

13. The complaint petition does not show that the cheque was presented at Delhi. It is absolutely silent in that regard. The facility for collection of the cheque admittedly was available at Chandigarh and the said facility was availed of. The certificate dated 24.6.2003, which was not produced before the learned court taking cognizance, even if taken into consideration does not show that the cheque was presented at the Delhi Branch of the City Bank. We, therefore, have no other option but to presume that the cheque was presented at Chandigarh. Indisputably, the dishonour of the cheque also took place at Chandigarh. The only question, therefore, which arises for consideration is that as to whether sending of notice from Delhi itself would give rise to a cause of action for taking cognizance under the Negotiable Instruments Act.

14. It is one thing to say that sending of a notice is one of the ingredients for maintaining the complaint but it is another thing to say that dishonour of a cheque by itself constitutes an offence. For the purpose of proving its case that the accused had committed an offence under Section 138 of the Negotiable Instruments Act, the ingredients thereof are required to be proved. What would constitute an offence is stated in the main provision. The proviso appended thereto, however imposes certain further conditions which are required to be fulfilled before cognizance of the offence can be taken. If the ingredients for constitution of offence laid down in the provisos (a),(b) and appended to Section 138 of the Negotiable Instruments Act intended to be applied in favour of the accused, there cannot be any doubt that receipt of a notice would ultimately give rise to the cause of action for filing a complaint. As it is only on receipt of the notice the accused at his own peril may refuse to pay the amount. Clauses (b) and of the proviso to section 138 therefore must be read together. Issuance of notice would not by itself give rise to a cause of action but communication of the notice would?

In State of Haryana vs. Bhajan Lal, 1992 Supp(1) Supreme Court Cases 335, the Apex Court has held as under:-

?The following categories of cases can be stated by way of illustration wherein the extraordinary power under Article 226 or the inherent powers under Section 482,Cr.P.C. Can be exercised by the High Court either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channels and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised:-

(1)Where the allegations made in the first information report or the complainant, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

(2)Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1)of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

(3)Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do no disclose the commission of any offence and make out a case against the accused.

(4)Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a Police Officer without an order of Magistrate as contemplated under Section 155(2) of the Code.

(5)Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6)Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of aggrieved party.

(7)Where a criminal proceeding is manifestly attended with mala fide and/or where the proceedings is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.

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.?

In M.S.Narayana Menon @ Mani vs. State of Kerala and another 2006(2) Apex Court Judgments 411 (SC) wherein it has been held as under:-

"We in the facts and circumstances of this case need not go into the question as to whether even if the prosecution fails to prove that a large portion of the amount claimed to be a part of debt was not owing and due to the complainant by the accused and only because he has issued a cheque for a higher amount, he would be convicted if it is held that existence of debt in respect of large part of the said amount has not been proved. The Appellant clearly said that nothing is due and the cheque was issued by way of security. The said defence has been accepted as probable. If the defence is acceptable as probable the cheque therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not come within the purvie

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w of Section 138 of the Act." A perusal of Annexures P2 and P5 reveal that the cheques in question were handed over to the complainant on 21.5.2002 and 11.5.2002. The said cheques were blank when they were handed over to the complainant. Annexure P6 is a letter written by the petitioners on 22.5.2002 regarding handing over of the blank cheque No. 0905126 to the Parle Products Private Ltd. Kanpuralong with the order for supply. Thus, it appears that the cheques in question had been handed over in blank to the complainant by way of Security by the petitioners. Moreover, no transaction had taken place between the parties at Bahadurgarh. The agreement between the parties had been executed at Bombay, whereas, the cheques in question were issued at Branch Office of State Bank of India, Karuj, District Banda UP. Keeping in view the totality of the circumstances, the continuation of criminal proceedings at Bahadurgarh would be nothing but an abuse of process of law as no cause of action had arisen to the complainant at Bahadurgarh to file the complaint in question. Accordingly, this petition is allowed. Criminal Complaint (Annexure P16) as well as all the subsequent proceedings arising therefrom are quashed.