The High Court dismissed the petition under section 482 Cr.P.C. seeking quashing of a section 138 complaint. The court held that the lack of consideration argument requires proof by evidence in trial and mere allegation without settlement offer does not establish misuse of process of law.
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Crl.Misc.No. M-16049 of 2012
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Crl.Misc.No. 42034-35 of 2012 in Crl.Misc.No. M-16049 of 2012 Date of decision : 17.10.2012
M/s Jain Udhay Hosiery Pvt. Ltd. And Anr. v. M/s Mahaluxmi Silk Store
Petitioners
Respondent
CORAM HON'BLE MR. JUSTICE JITENDRA CHAUHAN
Present: Mr. Ravinder Singh Randhawa, Advocate for the petitioners Mr. SS Panag, Advocate for the respondent
JITENDRA CHAUHAN,J.
Crl.Misc.No. 42034-35 of 2012
The applications are allowed. Annexures P-2 to P-4 are taken on record.
Crl.Misc. No. M-16049 of 2012
The instant petition under section 482 Cr.P.C has been filed for quashing of criminal complaint No. 1306/3 dated 1.6.2011, under section 138 of Negotiable Instruments Act, (for short the Act) pending in the court of Judicial Magistrate Ist Class, Ludhiana and all consequential proceedings arising therefrom.
The brief facts of the case are that the respondentcomplainant is engaged in carrying out the business of dyeing and sale of yarn. The petitioners had been purchasing yarn from the respondent on credit. An amount of Rs. 1,77,71,458.47 paise was due against the petitioners. The petitioners issued three cheques of Rs. 40,00,000/- i.e Rs. 20,00,000/- dated 24.11.2010, Rs. 5,00,000/- dated 30.12.2010 amd Rs. 15,00,000/- dated 10.1.2011 with an assurance to the complainant that the said cheques were good for payment and same shall be encashed. The
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Crl.Misc.No. M-16049 of 2012
complainant deposited the said cheques in the bank, but the cheques were dishouored by the bank with the remarks “ Other Reason (NPA A/c”). After dishonour of the cheques, the complainant respondent requested the petitioners to make the payment to the complainant, but the petitioners failed to make the payment. Thereafter the complainant filed complaint against the petitioners under section 138 of the Act.
Learned counsel for the petitioners contends that the petitioners had business dealing with the respondent and during the course of business, the petitioners had issued the aforesaid cheques but the complainant has committed an illegality by presenting the cheques in the bank for encashment. The said cheques were security cheques and the complainant violated the understanding reached between the parties and presented those cheques in the bank. Learned counsel further submits that the petitioners are ready and willing to settle the accounts with the respondent. According to him, section 43 of the Act makes it clear that the cheques in question are without consideration. He drew my attention in this regard to exception 1 of section 43 of the Act. According to him, even under section 118 of the Act the presumption as regard consideration is there but it is there only till the contrary is proved. According to him, the petitioners claim that these cheques were not issued in discharge of any existing liability but only as security and these blank cheques were filled by the respondent and presented for payment in illegal manner. The provisions of exception 1 to section 43 of the Act has no application to the facts of this case. The respondent had already filed a criminal complaint consequent upon dishonour of the cheques. Normally in case of big business houses, the cheques are filled in by the clerks and they are signed by the authorized
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Crl.Misc.No. M-16049 of 2012
signatory and for that reason, the cheques may not be in the handwriting of the persons signing the same. That itself creates no doubt about the validity of the cheques. Even otherwise this fact would have to be proved before the trial court for which evidence would be required to be led. There is presumption under section 139 of the Act that the cheque had been issued for the discharge, in whole or in part, of any debt or other liability.
I have heard the learned counsel and gone through the
file.
A perusal of the complaint Annexure P-1 would show that the complainant-respondent has claimed that petitioners-accused were having business dealings and they had been purchasing yarn from the complainant. A sum of Rs.1,77,71,458.47 paise was due from the petitioners, and in discharge of their liability, they issued two cheques of Rs. 25,00,000 each. On presentation of the said cheques by the complainant, the same were dishonoured. The argument that the cheques were issued by way of security and not for discharge of any debt or liability would have to be proved by the petitioners before the learned trial court. By mere alleging that the cheques have been issued by way of security and that the petitioners are ready to settle the accounts with the respondent is not backed by any offer of settlement. Therefore, it cannot be said that the complainant misused the process of law. Hence, the complaint cannot be quashed.
In view of the above, this petition is without merit and is
dismissed.
(JITENDRA CHAUHAN) JUDGE
17.10.2012 MS
2 issues framed by the court
Whether the criminal complaint under section 138 of the Negotiable Instruments Act can be quashed on the ground that the cheques were issued as security rather than for discharge of debt.
Whether mere allegation that cheques were issued by way of security without offering settlement justifies quashing the complaint under section 482 Cr.P.C.
4 provisions across 2 enactments
M/s Jain Udhay Hosiery Pvt. Ltd. And Anr.
M/s Mahaluxmi Silk Store
Jitendra Chauhan
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
