Karnataka High Court
M/S Bips Systems Ltd vs Iris Computers Limited on 2 February, 2023
Author: Hemant Chandangoudar
Bench: Hemant Chandangoudar
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CRL.P No. 7330 of 2017
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF FEBRUARY, 2023
BEFORE
THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR
CRIMINAL PETITION NO. 7330 OF 2017
BETWEEN:
1. M/S BIPS SYSTEMS LTD
E-261, AMAR COLONY,
LAJPAT NAGAR, NEW DELHI-110024
REPRESENTED BY ITS DIRECTOR,
MRS PRIYANKA KAUSHAL
2. NAGENDRA GOEL
DIRECTOR/AUTHORISED SIGNATORY,
M/S BIPS SYSTEMS LTD,
E-261, AMAR COLONY,
LAJPT, NAGR, NEW DELHI-110024.
ALSO AT
NAGENDRA GOEL,
DIRECTOR/AUTHORISED SIGNATORY,
M/S BIPS SYSTEMS LTD.,
Digitally
signed by R
HEMALATHA
F-20, SECTOR 40, NOIDA 201201.
Location: High
Court of
Karnataka 3. SUNITA JAIN
DIRECTOR,
M/S BIPS SYSTEMS LTD.
E-261, AMAR COLONY,
LAJPAT NAGAR, NEW DELHI-110024
ALSO AT
SUITA JAI,
DIRECTOR
M/S BIPS SYSTEMS LTD,
F-20, SECTOR 40 NOIDA 201201.
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CRL.P No. 7330 of 2017
4. PRIYANKA KUSHAL
DIRECTOR,
M/S BIPS SYSTEMS LTD.
E-261, AMAR COLONY,
LAJPAT NAGAR, NEW DELHI-110024
ALSO AT
PRIYANKA KUSHAL
DIRECTOR
M/S BIPS SYSTEMS LTD,
F-20, SECTOR 40 NOIDA 201201.
...PETITIONERS
(BY SRI. ISMAIL M MUSBA, ADVOCATE)
AND:
IRIS COMPUTERS LIMITED
NO.108, PRESTIGE CENTRE POINT,
CUNNIGHAM ROAD,
BANGALORE-560052.
REPRESENTED BY ITS ACCOUNTS EXECUTVE,
MR BRAMHANANDA REDDY.
...RESPONDENT
(BY SRI.RANGA RAMU, ADVOCATE)
THIS CRL.P IS FILED UNDER SECTION 482 CR.P.C BY
THE ADVOCATE FOR THE PETITIONER PRAYING THAT THIS
HON'BLE COURT MAY BE PLEASED TO SET ASIDE THE ORDER
DATED 07.04.2017 IN C.C.NO.12098/2017 PASSED BY THE
XXV ADDL.C.M.M., BANGALORE WHEREIN THE HON'BLE COURT
WAS PLEASED TO TAKE COGNIZANCE AND DIRECT
REGISTRATION OF CASE AND ISSUANCE OF SUMMONS TO THE
ACCUSED, PRODUCED AS ANNEXURE-A AND QUASH THE
ENTIRE PROCEEDINGS IN C.C.NO.12098/2017 PENDING ON
THE FILE OF XXV ADDL.C.M.M., BANGALORE.
THIS PETITION, COMING ON FOR ADMISSION, THIS DAY,
THE COURT MADE THE FOLLOWING:
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CRL.P No. 7330 of 2017
ORDER
Private complaint under Section 200 of Cr.P.C. is filed by the respondent for the offence punishable under Section 138 of Negotiable Instrument Act, 1881, alleging that, the subject cheque which was issued by the accused No.2 who is the Director/Authorized signatory of accused No.1-Company towards legally enforceable debt, when presented for realization was dishonored for lack of funds. Learned Magistrate after perusal of the complaint took cognizance and issued summons.
2. Sri.B.V.Acharya, learned Senior counsel, appearing for petitioners' counsel, would submit that the cheque was returned with an endorsement "Signature not as per the mandate" which does not constitute an offence under Section 138 of N.I.Act, 1881. He further submits that the subject cheque was misused by the complainant, which was issued on 21.03.2012 and the said cheque was presented on 24.12.2016. Hence, validity of the said cheque had expired.
3. I have considered the submissions made by the learned Senior counsel appearing for the petitioners/accused. -4- CRL.P No. 7330 of 2017
4. Petitioners have produced copy of the registered, which indicates that, the receipt of the subject cheque by the representatives of respondent-Company namely Satish Bharadwaj along with two other cheque bearing Nos.739458 and 739459. The petitioners have also produced the ledger to substantiate their claim, that the entire payment which was due to the respondent-complainant was made on 26.04.2012 and 29.04.2012. The petitioners have also produced the full and final ledger at Annexure-'A' series, to substantiate their claim that the entire payment to the respondent-complainant was made through cheques/RTGS.
5. The respondent has not filed objections disputing the genuineness of these documents, hence, it is implied that, there is no legally enforceable debt against the petitioners/accused and the subject cheque was not issued towards legally enforceable debt.
6. The subject cheque was returned with an endorsement 'signature not as per mandate". The petitioners have filed an affidavit enclosing the communication dated 16.05.2013 issued to its banker, enclosing the resolution passed by the company, changing the banking operations by -5- CRL.P No. 7330 of 2017 single signatory to joint signatory. The Banker has also issued an information, certifying that the petitioner-company is having an account with the Canara Bank, New Delhi, and the authorized signatory in their records has been changed from single signatory to joint signatory with effect from 15.05.2013. The genuineness of these documents are also not disputed by the respondent-complainant, which clearly implies that the authorized signatory to operate the banking operations has been changed from single signatory to joint signatory and the subject cheque was issued by one signatory on 21.03.2012.
7. It is also undisputed that, as on the date when the subject cheque was returned, there was sufficient funds in the bank account of the petitioners/accused. Section 138 of the N.I. Act, specifies that, to constitute an offence, there must be legally enforceable debt and the cheque which was drawn to the account of the bank for discharge in whole or in part, of the debt or other liability, is returned by the bank unpaid, in support of legally enforceable debt, as the cheques issued has been returned due to insufficient funds or it exceeds the amount arranged to be paid from that account.
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8. In the instant case, the cheque was returned with an endorsement 'signature not as per mandate' which is not one of the conditions enumerated under Section 138 of the N.I. Act. In the absence of essential ingredients, so as to constitute an offence under Section 138 of the N.I. Act, the cognizance taken by the learned Magistrate is impermissible.
9. In view of the preceding analysis, having regard to the undisputed fact that the cheque was issued on 21.03.2012 and the company had resolved to change the banking operations to be carried on from single signatory to joint signatory, the continuation of the criminal proceedings will be an abuse of process of law. Accordingly, I pass the following:
ORDER i. Petition is allowed. ii. The impugned proceedings in C.C.No.12098/2017 on the file of XXV Addl. Chief Metorpolitan Magistrate, Bengaluru is hereby quashed.
Sd/-
JUDGE GPG/RKA