Dismissed

M/S Jain Udhay Hosiery Pvt. Ltd. and Anr. v. M/S Mahaluxmi Silk Store

Punjab & Haryana HC17 Oct 2012CRM-M/19823/2012

Case brief

AI extract

What is this about?

The High Court of Punjab and Haryana dismissed a petition under Section 482 Cr.P.C. seeking to quash a complaint under Section 138 of the Negotiable Instruments Act. The court held that the petitioner's claim that cheques were security cheques lacked proof and did not justify quashing the complaint.

What did the court decide?

Petition for quashing the criminal complaint under Section 138 NI Act dismissed without merit.

M/S Jain Udhay Hosiery Pvt. Ltd… — Contract and Commercial Disputes | Punjab & Haryana HC (2012)

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Crl.Misc.No. M-19823 of 2012

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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

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Crl.Misc.No. M-19823 of 2012 Date of decision : 17.10.2012

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M/s Jain Udhay Hosiery Pvt. Ltd. And Anr. v.

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M/s Mahaluxmi Silk Store

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Petitioners

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Respondent

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CORAM : HON'BLE MR. JUSTICE JITENDRA CHAUHAN

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Present: Mr. Ravinder Singh Randhawa, Advocate for the petitioners Mr. SS Panag, Advocate for the respondent

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JITENDRA CHAUHAN,J.

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The instant petition under section 482 Cr.P.C has been filed for quashing of criminal complaint No. 1305/3 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.

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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 two cheques of Rs. 25,00,000/- each dated 15.2.2011 with an assurance to the complainant that the said cheques were good for payment and same shall be encashed. The complainant deposited the said cheques in the bank, but both 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

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Crl.Misc.No. M-19823 of 2012

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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.

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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 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

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Crl.Misc.No. M-19823 of 2012 3

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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.

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I have heard the learned counsel and gone through the file.

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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.

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In view of the above, this petition is without merit and is

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dismissed.

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(JITENDRA CHAUHAN) JUDGE

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17.10.2012 MS

M/S Jain Udhay Hosiery Pvt. Ltd. and Anr. v. M/S Mahaluxmi Silk Store

Case brief

What is this about?

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M/S Jain Udhay Hosiery Pvt. Ltd. and Anr. v. M/S Mahaluxmi Silk Store

Case brief

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What did the court decide?

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