Geeta Devi Vs Uco Bank

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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Cr. MMO No. 358 of 2024 Reserved on : 1.8.2024 Date of Decision: 4.9.2024.

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Geeta Devi ...Petitioner Versus UCO Bank ...Respondent

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Coram

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Hon’ble Mr Justice Rakesh Kainthla , Judge. Whether approved for reporting?¹ No.

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For the Petitioner	:	Mr. G.S. Sawhney, Advocate.
For the Respondent	:	Mr. J.P. Ranote, Advocate.

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Rakesh Kainthla, Judge

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The petitioner has filed the present petition for quashing complaint No. 464 of 2019, pending before the learned Additional Chief Judicial Magistrate, Court No.2, Shimla (learned Trial Court). (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for

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convenience).

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Whether reporters of Local Papers may be allowed to see the judgment? Yes.

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Briefly stated, the facts giving rise to the present petition are that the respondent/complainant filed a complaint before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (NI Act). It was asserted that the complainant is a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 having various branches all over India. The accused approached the petitioner for providing financial assistance of ₹10.00 lacs for obtaining ofÏce accommodation. The bank agreed to provide financial assistance. The accused executed various documents. The loan was repayable in monthly instalments. The accused defaulted in repayment of the schedule. She issued a cheque for ₹1,19,423/- towards the overdue loan liability and other charges. The cheque was presented before UCO Bank, Chakkar but the same was dishonoured with the remarks ‘funds insufÏcient’. The complainant served a notice upon the accused. The envelope containing the notice was returned by the Postal Department with the remarks ‘refused delivery’. The accused failed to pay the amount. Hence, the complaint was filed for taking action against the accused as per law.

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The accused filed the present petition for quashing the complaint. It was asserted that the petitioner has filed two complaints regarding one loan which amounts to gross misuse of the process of the Court. The petitioner was withdrawing and depositing the amount as per the account statement annexed by the bank with the complaint. The bank had failed to account for the deposit made by the petitioner/accused. The part payment should have been considered. The notice issued by the bank without taking note of the part payment is bad. There was nothing on record to show that the cheque was issued in the discharge of the legal liability. The complaint is silent regarding the date on which the demand was made by the bank from the complainant. The learned Magistrate has also not mentioned the relevant dates in his order. Therefore, it was ordered that the present petition be allowed and the complaint be ordered to be quashed.

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The petition is opposed by the respondent by filing a reply denying the contents of the petition. It was asserted that the evidence on behalf of the complainant is complete and the case was listed for recording the statement of the petitioner under Section 313 of Cr.P.C. The petition has been filed with an

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ulterior motive to delay the disposal of the case. The accused had taken a loan of ₹10.00 lacs which was repayable in 60 equated monthly installment of ₹22,549/-. The accused failed to deposit the amount and she issued a cheque for ₹1,19,423/- to discharge overdue loan liability and other charges. She had herself issued two different cheques on two different occasions; hence two complaints were filed against her. The accused can present her defence before the learned Trial Court. Therefore, it was prayed that the present petition be dismissed.

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I have heard Mr. G.S. Sawhney, learned counsel for the petitioner/accused and Mr. J.P. Ranot, learned counsel for the respondent/complainant.

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Mr. G.S. Sawhney, learned counsel for the

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petitioner/accused submitted that the bank was bound to endorse the amount. He relied upon the judgment of the Hon’ble Supreme Court in Dashrathbhai Vs. Hitesh (2022) 4 Law Herald SC 2892 in support of his submission.

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Mr J.P. Ranot, learned counsel for the complainant/bank submitted that the averments made in the complaint and the accompanied documents show a prima facie

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case for the commission of an offence punishable under Section 138 of the NI Act. Learned Trial Court is seized of the matter and the case is listed for recording the statement of the accused under Section 138 of NI Act. The petitioner/accused can raise a defence before the learned Trial Court. He relied upon the judgment of the Hon’ble Supreme Court in K. Bhaskaran Vs. Sankaran Vaidhyan Balan and another AIR (1999) SC 3762, Londhe Prakash Bhagwan vs. Dattatraya Eknath Mane and others (2013) 10 SCC 627 and Rashida Kamaluddin Syed & Anr vs Shaikh Saheblal Mardan (Dead) through LRs and another (2007) 3 SCC 548 in support of his submission.

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I have given considerable thought to the submissions made at the bar and have gone through the records carefully.

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9 The parameters for exercising jurisdiction under Section 482 of Cr.P.C. were laid down by the Hon’ble Supreme Court in A.M. Mohan v. State, 2024 SCC OnLine SC 339, wherein it was observed: -

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9. The law with regard to the exercise of jurisdiction under Section 482 of Cr. P.C. to quash complaints and criminal proceedings has been succinctly summarized by this Court in the case of Indian Oil Corporation v. NEPC India Limited (2006) 6 SCC 736: 2006 INSC 452 after considering the earlier precedents. It will be apposite to

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refer to the following observations of this Court in the said case, which read thus:

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“ 12. The principles relating to the 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 [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 [(1999) 3 SCC 259: 1999 SCC (Cri) 401], Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd. [(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 [(2001) 8 SCC 645: 2002 SCC (Cri) 19] and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque [(2005) 1 SCC 122: 2005 SCC (Cri) 283]. The principles, relevant to our purpose are:

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( 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.

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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 a complaint.

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( 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.

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( 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.

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( 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 necessary for making out the offence.

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( v. ) A given set of facts may make out: ( a ) purely a civil wrong; ( 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.

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Similar is the judgment in Maneesha Yadav v. State of

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U.P., 2024 SCC OnLine SC 643 , wherein it was held: -

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12. We may gainfully refer to the following observations of this Court in the case of State of Haryana v. Bhajan Lal1992 Supp (1) SCC 335: 1990 INSC 363 :

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“ 102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised 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 sufÏciently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

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(1) Where the allegations made in the first information report or 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 a case against the accused.

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(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 ofÏcers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

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(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

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(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 ofÏcer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

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(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 sufÏcient ground for proceeding against the accused.

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(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 a specific provision in the Code or the concerned Act, providing efÏcacious redress for the grievance of the aggrieved party.

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(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding 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.

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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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It was submitted that the cheque was not issued in discharge of the legal liability and the complaint is liable to be quashed. This submission is not acceptable. It was laid down by the Hon’ble Supreme Court in Rathish Babu Unnikrishnan v. State (NCT of Delhi), 2022 SCC OnLine SC 513 , that the burden of proving that there is no existing debt of liability is to be discharged in the trial and the Court has to consider the presumption under Section 139 of NI Act in favour of the holder while deciding the petition under Section 482 of Cr.P.C. It was

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observed:

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“10. It is also relevant to bear in mind that the burden of proving that there is no existing debt or liability, is to be discharged in the trial. For a two judges Bench in M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd. (2002) 1 SCC 234 , Justice S.N. Variava made the following pertinent observation on this aspect: —

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“17. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability.”

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11. 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

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Court for quashing even before the trial has commenced, the Court's approach should be careful enough not to prematurely extinguish the case by disregarding the legal presumption which supports the complaint. The opinion of Justice K.G. Balakrishnan for a three-judge Bench in Rangappa v. Sri Mohan (2010) 11 SCC 441 would at this stage, deserve our attention:—

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“ 26. … we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.”

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12. At any rate, whenever facts are disputed the truth should be allowed to emerge by weighing the evidence. On this aspect, we may benefit by referring to the ratio in Rajeshbhai Muljibhai Patel v. State of Gujarat (2020) 3 SCC 794 where the following pertinent opinion was given by Justice R. Banumathi: —

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“ 22. ………….. When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the NI Act ought not to have been quashed by the High Court by taking recourse to Section 482 CrPC. Though, the Court has the power to quash the criminal complaint filed under Section 138 of the NI Act on legal issues like limitation, etc. criminal complaint filed under Section 138 of the NI Act against Yogeshbhai ought not to have been quashed merely on the ground that there are inter se disputes between Appellant 3 and Respondent 2. Without keeping in view, the statutory presumption

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raised under Section 139 of the NI Act, the High Court, in our view, committed a serious error in quashing the criminal complaint in CC No. 367 of 2016 filed under Section 138 of the NI Act.”

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13. Bearing in mind the principles for the exercise of jurisdiction in a proceeding for quashing, let us now turn to the materials in this case. On careful reading of the complaint and the order passed by the Magistrate, what is discernible is that a possible view is taken that the cheques drawn were, in the discharge of a debt for the purchase of shares. In any case, when there is a legal presumption, it would not be judicious for the quashing Court to carry out a detailed enquiry on the facts alleged, without first permitting the trial Court to evaluate the evidence of the parties. The quashing Court should not take upon itself, the burden of separating the wheat from the chaff where facts are contested. To say it differently, the quashing proceedings must not become an expedition into the merits of factual dispute, so as to conclusively vindicate either the complainant or the defence.

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14. The parameters for invoking the inherent jurisdiction of the Court to quash the criminal proceedings under S.482 CrPC, have been spelt out by Justice S. Ratnavel Pandian for the two judges' bench in State of Haryana v. Bhajan Lal 1992 Supp (1) SCC 335: AIR 1992 SC 604 , and the suggested precautionary principles serve as good law even today, for invocation of power under Section 482 of the Cr.P.C.

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“ 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

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jurisdiction on the court to act according to its whim or caprice.”

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15. In the impugned judgment, the learned Judge had rightly relied upon the opinion of Justice J.S. Khehar for a Division Bench in Rajiv Thapar (supra), which succinctly expresses the following relevant parameters to be considered by the quashing Court, at the stage of issuing process, committal, or framing of charges,

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“ 28. The High Court, in the exercise of its jurisdiction under Section 482 CrPC, 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.”

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16. The proposition of law as set out above makes it abundantly clear that the Court should be slow to grant the relief of quashing a complaint at a pre-trial stage, when the factual controversy is in the realm of possibility particularly because of the legal presumption, as in this matter. What is also of note is that the factual defence without having to adduce any evidence needs to be of an unimpeachable quality, so as to altogether disprove the allegations made in the complaint.

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17. The consequences of scuttling the criminal process at a pre-trial stage can be grave and irreparable. Quashing proceedings at preliminary stages will result in finality

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without the parties having had an opportunity to adduce evidence and the consequence then is that the proper forum i.e., the trial Court is ousted from weighing the material evidence. If this is allowed, the accused may be given an un-merited advantage in the criminal process. Also because of the legal presumption, when the cheque and the signature are not disputed by the appellant, the balance of convenience at this stage is in favour of the complainant/prosecution, as the accused will have due opportunity to adduce defence evidence during the trial, to rebut the presumption.

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18. Situated thus, to non-suit the complainant, at the stage of the summoning order, when the factual controversy is yet to be canvassed and considered by the trial court will not in our opinion be judicious. Based upon a prima facie impression, an element of criminality cannot entirely be ruled out here subject to the determination by the trial Court. Therefore, when the proceedings are at a nascent stage, the scuttling of the criminal process is not merited.”

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Thus, the complaint cannot be quashed on the grounds that the cheque was issued without consideration and the conditions for its presentation were not satisfied.

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It was submitted that the accused had deposited the amounts which were not endorsed by the bank. The notice issued to the accused is bad as it was issued for the whole amount of the cheque. Reliance was placed upon Annexure A-1 and the statement of account. This submission will not assist the petitioner/accused. The statement shows that an amount of

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₹9,25,417/- was due towards the bank on 5.3.2019. The cheque was issued on 7.3.2019 for an amount of ₹1,19,423/- which is much less than the amount of ₹9,25,417/- due on 5.3.2019. Therefore, the plea of the petitioner/accused that she was not liable to pay ₹1,19,423/- on the date of the issuance of the cheque is not acceptable.

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It was asserted in the reply that the learned Trial Court has completed the recording of evidence and the matter is now listed for recording the statement of the accused. The petitioner has not challenged the orders taking cognizance and putting notice of the accusation. It was laid down in Naresh Kumar & others vs State of H.P. & others 2023 STPL 2994 HP that where the orders passed by the Court of competent jurisdiction of taking cognizance and framing charges were not challenged, the Court will not exercise jurisdiction under Section 482 of Cr.P.C. to quash the F.I.R. It was observed: -

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“10. Keeping in view the above-noticed dictum that the FIR in question cannot be quashed, at this stage, in the absence of any specific challenge to the investigation conducted by police and also orders passed by the Court of Competent jurisdiction, whereby firstly, cognizance was taken and thereafter, the charges were framed. During the course of the hearing, the Court was informed by learned counsel for respondent No. 4 that most of the prosecution

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witnesses have already been examined in the case. This Court while exercising jurisdiction under Section 482 of Cr. P.C. will not hold any inquiry into the factual aspect of the matter. The facts alleged in the petition and also canvassed on behalf of the petitioners by learned counsel representing him are subject to trial and hence, cannot be gone into by this Court, at this stage.”

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Therefore, there is no reason to quash the complaint

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pending before the learned Trial Court; hence, the present petition fails and the same is dismissed.

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The observation made hereinabove shall remain

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confined to the disposal of the petition and will have no bearing, whatsoever, on the merits of the case.

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( Rakesh Kainthla) Judge

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4^th September 2024 (Chander)

Geeta Devi v. Uco Bank

Case brief

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Geeta Devi v. Uco Bank

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