High Court Kerala held that criminal proceedings under Section 138 NI Act could not be maintained. The underlying dispute was purely civil involving contract and arbitration, rendering further criminal action an abuse of court process.
Criminal Misc.Case CC.No:139/2010 filed before Chief Judicial Magistrate Court, Thrissur is quashed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT : THE HONOURABLE MR. JUSTICE N.K.BALAKRISHNAN MONDAY, THE 14TH NOVEMBER 2011 / 23RD KARTHIKA 1933 Crl.MC.No. 2 of 2011() ---------------------CC.139/2010 of CHIEF JUDICIAL MAGISTRATE COURT, THRISSUR ....................
PETITIONER(S): ACCUSED ----------------------
1. UNNIKUTTAN, AGED 35 YEARS, S/O. GIRIJAVALLABHAN, KUPPATHIL HOUSE, CHIRAKKAKODE, MADAKKATHARA, P.O. VELLANIKKARA, THRISSUR DISTRICT.
2. NICY UNNIKUTTAN, AGED 25 YEARS, W/O. UNNIKRISHNAN, KUPPATHIL HOUSE, CHIRAKKAKODE, MADAKKATHARA, P.O. VELLANIKKARA, THRISSUR DISTRICT.
3. VIJEESH.V.K, AGED 30 YEARS, S/O. KRISHNAN, VELIYAPARAMBIL HOUSE, CHIRAKKAKODE, MADAKKATHARA, P.O. VELLANIKKARA, THRISSUR DISTRICT.
BY ADV. SMT.DHANYA P.ASHOKAN
RESPONDENT(S): ---------------
1. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA,
ERNAKULAM 682 031.
2. SREERAM TRANSPORT FINANCE COMPANY LTD., ARAFA TOWERS, VELIYANNOOR ROAD, THRISSUR -21 REPRESENTED BY MUKTHYAR AGENT M.T. JOHNY, S/O. THOMAN, MANIPARAMBIL HOUSE, ALAGAPPANAGAR.P.O, THRISSUR 693 941.
R2 BY ADV. SRI.E.M.MURUGAN
THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 14/11/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
Crl.MC.No. 2 of 2011()
APPENDIX
PETITIONERS ANNEXURES:
| ANNEXURE I: | COPY OF THE BEFORE THE C |
COMPLAINT FILED BY THE 2ND RESPONDENT JM THRISSUR DATED 10.3.2010 |
|---|---|---|
| ANNEXURE II: | COPY OF THE THRISSUR EAS |
FIR DATED 5.5.2010 IN CRIME NO:369/2010 OF T POLICE STATION |
| ANNEXURE III: | COPY OF THE NO:369/2010 |
CHARGE SHEET DATED 29.7.2010 IN CRIME |
| ANNEXURE IV: | COPY OF THE | HYPOTHECATION AGREEMENT DATED 30.04.2009 |
| ANNEXURE V: | COPY OF THE | R.C. PARTICULARS OF THE VEHICLE |
| ANNEXURE VI: | COPY OF THE WITH THE ORD |
A.O.P. NO:79/2010 DATED 18.2.2010 ALONG ER IN I.A. NO:501/2010 |
RESPONDENTS ANNEXURES: NIL
//TRUE COPY//
P.A.TO JUDGE
JJJ
N.K. BALAKRISHNAN, J.
Crl. M.C. No: 2 OF 2011 (A)
Dated this the 14th day of November, 2011
O R D E R
Learned counsel for the petitioners submits that the vehicle in question was purchased for a total sum of Rs.6,75,000/- (Rupees Six lakhs seventy five thousand only). Some amount was stated to have been paid. Because of financial constraints, the petitioners committed default in payment of installments. Hence, the vehicle (JCB) was seized by second respondent, the financier. Petitioners 2 and 3 are stated to be the guarantors to the amount obtained by the first respondent from R2. According to the petitioners subsequently, second respondent initiated arbitration proceedings. Now it is stated to be pending.
According to the petitioners, not only the vehicle (JCB) was seized but also the immovable property of the petitioner was attached and put up for sale. The second
Crl. M.C. No: 2 OF 2011 (A) 2
respondent has filed this complaint stating that the petitioners have cheated him. According to the petitioners, even if the entire allegations made in the complaint are accepted, it would only show that a civil dispute exists between the parties.
It is submitted by the learned counsel for R2 that the arbitration conciliation proceeding is pending before the Arbitrator. The fact that the vehicle (JCB) was taken into custody by the second respondent is not disputed and for the balance amount, the petitioner's property was also attached. Still the second respondent was not satisfied, is the submission made by the learned counsel for the petitioners. It is true, even if civil action is pending, the proceedings under the criminal law can be set in, but not in a case like this where dispute is purely civil in nature. Learned counsel for the petitioners submits that it was by
Crl. M.C. No: 2 OF 2011 (A) 3
operating or plying the vehicle, installments were to be paid by the petitioner. But, since that had already been taken possession by the second respondent, the petitioners are denied the source to raise funds to pay the amount. R2 has already initiated action for recovering the balance amount by attaching the movable property of the petitioner.
In the light of what has been stated above I find that, as the dispute is purely civil in nature, further proceedings in C.C.No:139/2010 would be a sheer abuse of process of Court. In order to secure the ends of justice, I find, the aforesaid C.C.No:139/2010 is to be quashed. This petition is allowed. Further proceedings in C.C. No:139/2010 on the file of Chief Judicial Magistrate Court, Thrissur, is quashed.
N.K. BALAKRISHNAN, JUDGE
jjj
3 issues framed by the court
Whether criminal proceedings in S.138 of the Negotiable Instruments Act are maintainable when the underlying dispute stems from a civil transaction pending arbitration.
Whether the alleged criminal charges amount to cheating or merely reflect a civil dispute over default in loan installments and vehicle seizure.
Whether a Criminal Miscellaneons Appeal satisfies Article 226 of the Constitution to quash such proceedings as an abuse of court process.
UNNIKUTTAN
NICY UNNIKUTTAN
VIJEESH.V.K
STATE OF KERALA
SREERAM TRANSPORT FINANCE COMPANY LTD.
N.K. BALAKRISHNAN
As recorded by the court registry
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