Dismissed

M/s. E.C.I.Engineering Constructions Company Ltd., v. The State of Andhra Pradesh

Telangana HC24 Sept 2012CRLP/5062/2010

Case brief

AI extract

What is this about?

This order dismissed a Criminal Petition under Section 482 Cr.P.C. seeking quashing of proceedings under Sections 420 and 465 IPC. The court held that issuing a dishonoured cheque to secure an insurance policy prima facie established cheating, and lack of actual loss was insufficient grounds for quashing.

What did the court decide?

Criminal Petition for quashing proceedings under Sections 420 and 465 IPC dismissed; trial to be conducted.

M/s. E.C.I.Engineering Constructions Company Ltd., Vs The… — Cheque Dishonour | Telangana HC (2012)

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HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY Crl.P.No. 5062 of 2010

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ORDER:

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This Criminal Petition is filed under Section 482 Cr.P.C. to quash proceedings in C.C.No.120 of 2007 (C.C.) on the file of the Court of Additional Judicial First Class Magistrate, Avanigadda, Krishna District, registered for offences punishable under Sections 420 and 465 IPC, so far the petitioners herein are concerned.

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2. Whereas the petitioners herein are A-1 and A-2 the respondent herein is the defacto complainant in the C.C. For the sake of convenience, I refer the parties as arrayed in the C.C.

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3. The version of the prosecution which is to be considered for the appreciation of the petition is as follows:

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A-1 is a registered firm which is being managed by A-2. They have involved in doing contracts. During the year 1999-2000, A-1 and A-2 were awarded contract work of “Restoration of Krishna Left Flood Bank” under circle agreement No.33/SC/99-2000. As per the terms of the agreement, A-2 insured the work for Rs.31,35,850/- and obtained insurance policy after entrusting necessary cheque, and submitted it to the Government of Andhra Pradesh. A-2 had to complete the work on behalf of A-1 and encash all the corresponding bills due to him from the Government of Andhra Pradesh during the same year. It is further according to the prosecution that it was noticed that the cheque was issued on behalf of A-1 firm in fact by the sub-contractor of the work namely Gummadi Krishna Rao was bounced whereas on coming to know about it, the Insurance Company cancelled the insurance policy which factor was informed to A-2. Further one D.V. Naidu, Deputy Superintendent of Police, O/o Regional Enforcement (V &E), Vijayawada, reported the matter to the Government of Andhra Pradesh. Further as per the instructions of the Government, the defacto complainant reported the matter to the Sub-Inspector of Police, Avanigadda Police Station, for

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registering and conducting necessary investigation of the case. In fact it is alleged that A-2 took a signed blank cheque from Gummadi Krishna Rao and submitted it to the Insurance Company and obtained the insurance policy, which was submitted to the Government suppressing the factum of dishonour of the cheque.

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4. Learned counsel for A-1 and A-2 would contend that A-2 had no knowledge about the issuance of the dishonoured cheque whereas in fact the sub-contractor carried out the entire work including the work of giving the cheque. Further by doing so, no loss was caused to anybody and hence A-2 cannot be prosecuted for the alleged offences.

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5. Learned Additional Public Prosecutor has opposed the application.

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6. Therefore it is to be seen as to whether there are grounds to quash the proceedings.

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7. What is important here is that according to the defacto complainant, A-2 took a signed blank cheque from the sub-contractor and submitted it to the Insurance Company having showed the amount as Rs.11,772/- therein for obtaining necessary insurance policy, on the basis of which only he got the insurance policy which was submitted to the Government suppressing the factum of the dishonour of the cheque.

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It appears that such a provision was created to ensure that the contract would be properly carried out under any contingencies. The circumstances of the case clearly show that in order to obtain the insurance policy for the contract work, A-2 resorted to obtain a signed blank cheque from the sub-contractor and submitted it to the Insurance Company and obtained the insurance policy, which was submitted to the Government suppressing the factum of dishonour of the cheque, and as such it cannot be said now that A-2 did the same innocently. It is clear prima facie that by issuing the dishonoured cheque, the insurance company was induced to issue the policy and accordingly issued the same. Thus the ingredients of Section 420 IPC are established prima facie. Simply because no loss was occurred

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ultimately, it is not a ground to quash the proceedings. Therefore, necessary trial of the case is to be conducted to establish the complicity of A-2. I see no grounds to quash the proceedings as prayed for.

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8. Accordingly, the Criminal Petition is dismissed.

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_________________________ G. KRISHNA MOHAN REDDY, J

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Date: 21-09-2012 YCR

M/s. E.C.I.Engineering Constructions Company Ltd., v. The State of Andhra Pradesh

Case brief

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M/s. E.C.I.Engineering Constructions Company Ltd., v. The State of Andhra Pradesh

Case brief

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