Allowed

K.v.Kishore v. M/S Rajesh Exports Ltd.

Karnataka HC19 Mar 2024WP/33760/2018

Case brief

AI extract

What is this about?

A Magistrate's order recalling an earlier stay of a cheque-dishonour case was challenged. The High Court held the Magistrate lacked power to review its own stay order, quashed the recall order dated 07.07.2018, restored the stay order dated 11.11.2014, and left the respondent liberty to challenge that stay order separately.

What did the court decide?

Order dated 7.7.2018 passed by XXI Addl. CMM in CC No.19781/2007 quashed; stay order dated 11.11.2014 restored; liberty to respondent to challenge it.

K.v.Kishore Vs M/S Rajesh Exports Ltd. — Cheque Dishonour | Karnataka HC (2024)

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1 - NC: 2024:KHC:11259 WP No. 33760 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 19^TH DAY OF MARCH, 2024

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BEFORE

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THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 33760 OF 2018 (GM-RES)

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BETWEEN:

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K.V.KISHORE S/O LATE SRI K R V RATHNAM EX MANAGING DIRECTOR M/S JEWEL DE PARAGON PVT LTD(IN LIQUIDATION) RATHNAMS COMPLEX 10/5, KASTURBA ROAD BANGALORE-560001 R/A NO.123, NIKHITHA MANSION 3^RD FLOOR, 3^RD MAIN, 80 FEET ROAD SBM COLONY, NAGENDRA BLOCK BSK I STAGE, BANGALORE-560050 …PETITIONER (BY SRI. PRADEEP S SAWKAR & SRI. S.R. KAMALA CHARAN., ADVOCATES)

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AND:

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Digitally signed by NARAYANAPPA LAKSHMAMMA Location: HIGH COURT OF KARNATAKA

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M/S RAJESH EXPORTS LTD COMPANY INCORPORATED UNDER COMPANYS ACT AND HAVING ITS OFFICE AT NO.4 BATAVIA CHAMBERS KUMARA KRUPA ROAD KUMARA PARK EAST BANGALORE-560001 AND REPRESENTED BY ITS OFFICER MR R M NANJUNDASWAMY

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…RESPONDENT (BY SRI. ROHAN KOTARI., ADVOCATE FOR SRI.P RAJU., ADVOCATE)

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THIS WRIT PETITION IS FILED UNDER ARTILCES 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE RECORDS IN C.C.NO. 19781/2007 ON THE FILE OF THE XXI ADDL. CHIEF

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2 - NC: 2024:KHC:11259 WP No. 33760 of 2018

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METROPOLITAN MAGISTRATE AND XXIII SR. CIVIL JUDGE AT ANNEX-A AND QUASH THE ORDER DATED 7.7.2018 AND ETC. THIS WRIT PETITION, COMING ON FOR PRELIMIANRY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner is before this Court seeking for the following relief:

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Call for the records in C.C.No.19781/2007 on the file of XXI Additional Chief Metropolitan Magistrate and XXIII Senior Civil Judge-SCCH-25 (Annexure-A) and quash the order dated 07.07.2018.

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Respondent-complainant had filed a complaint under Section 200 of the Code of Criminal Procedure, 1973 read with Section 138 of the Negotiable Instruments Act, 1881 alleging that cheque issued by the petitioner for sum of Rs.3,00,00,000/- had been dishonored on account of account being closed and as such the aforesaid offense under Section 138 had been committed.

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Initially on 11.11.2014, a memo having been filed by the petitioner that the company M/s Jewel DE Paragon Pvt. Ltd. of which the petitioner was a Director in which capacity he had transacted with the

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3 - NC: 2024:KHC:11259 WP No. 33760 of 2018

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complainant had been wound by an order of this Court in COP No.221/2013. Hence, vide order dated 11.11.2014 the Magistrate stayed the proceeding against the petitioner in PCR No.10320/2007 pending in CC No.19781/2007.

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Subsequently taking note of the fact that the proceedings in COP No.221/2013 had not progressed the Magistrate recalled the order dated 11.11.2014 vide its order dated 07.7.2018 and posted the matter for cross-examination of PW 1, it is challenging the same the petitioner is before this Court seeking for the aforesaid relief.

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The submission of Sri.S.R.Kamala Charan., learned counsel for the petitioner is that the Magistrate did not have the power to recall or review his earlier order dated 11.11.2014, once an order of stay had been granted and the said stay order was subject to the complainant being reserved the liberty to approach the Court seized of the winding up

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proceeding which has been inadvertently mentioned as tribunal in the said order. The said order could not have been recalled vide order dated 7.7.2014 and as such required to be quashed.

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Sri.Rohan Kotari., Learned counsel for respondent would however submit that the Magistrate firstly did not have the power to stay the proceedings under Section 446 of the Companies Act, 1956 in so far as the petitioner is concerned, since the subject matter of the transaction was a cheque issued by the petitioner in his personal capacity and further that as regards a criminal proceedings for dishonor of cheque Section 446 would not apply since it is would apply only to recovery suits or proceedings for distress pending the completion of winding up proceedings.

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A criminal offence would not come under the purview of the Section 446 of the Companies Act, 1956 and therefore he submits that order dated 11.11.2014

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5 - NC: 2024:KHC:11259 WP No. 33760 of 2018

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being contrary to the applicable law the order 7.7.2018 is proper and correct and ought not be interfered with.

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Heard Pradeep S.Sawkar and Sri.S.R.Kamala Charan., learned counsel appearing for the petitioner and Sri.Rohan Kotari., learned counsel appearing for respondent. Perused papers.

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It is a matter of fact and record that vide order dated 11.11.2014 the proceedings in

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CC No.19871/2007 has been stayed, the said order of stay has not been challenged till now. Though the complaint had been permitted to approach the Company Court the Company Court was also not approached.

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It is subsequently on 7.7.2018 that the complainant filed a memo stating that COP No.221/2013 was still pending which is taken cognizance of by the trial Court and the order of stay was recalled.

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This order dated 7.7.2018 as rightly contended by Sri.S.R.Kamala Charan., counsel for the petitioner is a review of the order dated 11.11.2014 which could not have been done by the Magistrate. As such I am of the considered opinion that no power having been vested with the Magistrate for reviewing its own order, the order dated 7.7.2018 is required to be quashed.

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Insofar as the submission made by the Sri.Rohan Kotari., learned counsel for respondents as regards the applicability or otherwise Section 446 the order 11.11.2014 not having been challenged by the complainant the same cannot now be agitated on a challenge being made to the order dated 7.7.2018.

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If at all, respondents are aggrieved by the order dated 11.11.2014, respondent ought to have filed civil proceedings challenging the same. In that view of the matter, I pass the following;

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NC: 2024:KHC:11259 WP No. 33760 of 2018

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ORDER

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i. The writ petition is allowed .

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ii. The order dated 7.7.2018 passed by the XXI Addl., CMM in CC No.19781/2007 is here by quashed.

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iii. Needless to say, the order dated 11.11.2014 stands restored.

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iv. Liberty is however reserved to the respondent to challenge the order dated 11.11.2014.

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Sd/JUDGE

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List No.: 1 Sl No.: 11

K.v.Kishore v. M/S Rajesh Exports Ltd.

Case brief

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K.v.Kishore v. M/S Rajesh Exports Ltd.

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