Punjab-Haryana High Court
Alka Jain vs M/S Bibby Financial Services India ... on 20 September, 2013
Author: Rekha Mittal
Bench: Rekha Mittal
Crl. Misc. No. M-4500 of 2013 -1-
In the High Court of Punjab and Haryana at Chandigarh
Crl. Misc. No. M-4500 of 2013
Date of Decision: September 20, 2013
Alka Jain
---Petitioner
versus
M/s Bibby Financial Services India Private Limited
---Respondent
Coram: Hon'ble Mrs. Justice Rekha Mittal
Present: Mr. S.Taidhar, Senior Advocate with
Mr. KDS Hooda, Advocate
for the petitioner
Mr. M.S.Vanaik and Deepak Bashta, Advocate,
for the respondent.
***
REKHA MITTAL, J.
The petitioner has filed the present petition under Section 482 of the Code of Criminal Procedure, 1973 (for brevity "the Code") seeking quashing of complaint No. 2502 dated 28.8.2012 (Annexure P-7) titled "M/s Bibby Financial Services India Private Limited vs. M/s Perfect Narrow Fabrics Private Limited and others" pending in the Court of Judicial Magistrate Ist Class, Gurgaon filed under Section 138 of the Negotiable Instruments Act, 1881 (for short "the Act") as well as summoning order dated 28.8.2012 (Annexure P-8) passed by Judicial Magistrate Ist class, Gurgaon vide which the petitioner has been summoned to face trial for the aforesaid offence.
The facts relevant for the disposal of the present petition are Saini Paramjit Kaur 2013.10.01 18:10 I attest to the accuracy and integrity of this document Chandigarh Crl. Misc. No. M-4500 of 2013 -2- that M/s Bibby Financial Services India Private Limited (hereinafter referred to as "the complainant") filed a complaint under Section 138 read with Section 142 of the Act on the allegations that Surinder Jain and Alka Jain directors of M/s Perfect Narrow Fabrics Private Limited, Kolkatta issued 30 cheques, detailed in para 09 of the complaint, total valuing Rs. 4,43,62,977/-, drawn on United Bank of India, Kolkatta and the same were dishonoured on its presentation to the bank through the banker of the complainant namely, Indus Ind Bank Limited, Gurgaon, Haryana vide cheque returned invoice memos dated 19.7.2012 and 23.7.2012 for the reason "Exceeds Arrangement". The accused failed to make payment of the cheque amounts despite receipt of legal notice dated 3.8.2012.
After recording preliminary evidence consisting of statement of Mr. Avinash Kumar Kaushal through whom complaint has been filed by the complainant company, the accused M/s Perfect Narrow Fabrics Private Limited and its Directors Mr. Surinder Jain and Ms. Alka Jain were ordered to be summoned.
Counsel for the petitioner, at the outset, apprised the Court that earlier a petition was filed seeking quashing of the criminal proceedings by petitioner Alka Jain and her husband namely, Surinder Jain but the said petition was withdrawn with liberty to file a fresh petition only on behalf of petitioner Alka Jain.
Counsel for the petitioner has prayed for quashing of criminal proceedings in the aforesaid complaint primarily on two counts:
(i)The complainant in para No. 3 of the complaint has not specified the role being played by petitioner Alka Jain in Saini Paramjit Kaur 2013.10.01 18:10 I attest to the accuracy and integrity of this document Chandigarh Crl. Misc. No. M-4500 of 2013 -3- regard to conduct of business of the accused company, therefore, Alka Jain cannot be held responsible even if the cheques issued on behalf of the company signed by her husband got dishonoured on presentation.
(ii)The summoning order has been passed by the Judicial Magistrate without compliance with the mandatory provisions of Section 202 of the Code.
During course of arguments, counsel for the petitioner is fair enough to concede that out of 30 cheques, subject matter of the complaint, one of the cheques mentioned at Sr. No. 29 bearing No. 860595 dated 30.6.2012 for an amount of Rs. 61,34,750/- has been signed by Alka Jain whereas the remaining cheques in dispute are under the signatures of her husband, Surinder Jain. As the petitioner is the signatory of one of the cheques in dispute, she cannot take any advantage to her submissions on the premise that her role as a Director of the company has not been specifically mentioned in order to show that at the time, the offence was committed, she was in-charge and was responsible to the complainant for the conduct of the business of the company.
The second submission made by counsel with regard to non- compliance of Section 202 of the Code also merits rejection. The scope of enquiry under Section 202 of the Code has been discussed in detail by this Court in Crl. M. No. 15252 of 2010, wherein a reference has also been made to the decision in S.K.Bhowmik v. S.K.Arora, 2007(4) R.C.R. (Criminal)650. This Court on a detailed consideration of amendment made in Section 202 of the Code with effect from 2006 has recorded its Saini Paramjit Kaur 2013.10.01 18:10 I attest to the accuracy and integrity of this document Chandigarh Crl. Misc. No. M-4500 of 2013 -4- conclusion that examination of the complainant, witnesses produced to support and corroborate version of the complainant and documents exhibited during evidence are a substantial compliance with the requirements of conducting an enquiry by the court before issuing a process, in cases, where the accused resides out of the jurisdiction of the Court concerned.
This question in regard to conducting of enquiry envisaged under Section 202 of the Code in case under Section 138 of the Act was dealt in Goenka Tradelinks Private Limited vs. Indiabulls Financial Services Limited (CRM No. 34763 of 2012, decided on 22.5.2013) and Apex Health Care Private Limited and others vs. M/s Alchemist Hospitals Limited, 2012 (5) RCR (Criminal) 964, wherein after reference to the decision of Hon'ble the Supreme Court of India in K.Bhaskaran vs. Sankaran Vaidhyan Balan and another 1999(7) SCC 510 and Harman Electronics Private Limited and another vs. National Panasonic India Private Limited, (2009) 1 SCC 720 has been held as quoted hereinbelow:-
"27. Taking into consideration the nature of the proceedings under Section 138 of the Act and the law laid down in K. Bhaskaran's case (supra) that the complainant can choose any one of the course having jurisdiction over any one of the local areas in which any one of the five acts i.e. drawing of the cheque; presentation of the cheque to the bank; returning the cheque unpaid by the drawee bank; giving notice in writing to the drawer of the cheque demanding payment of the cheque amount; and failure of the drawer to make payment within 15 days of the receipt of the notice, the provisions of Section 202 Cr.P.C. cannot be said to be Saini Paramjit Kaur applicable in proceedings under Section 138 of the Act, 2013.10.01 18:10 I attest to the accuracy and integrity of this document Chandigarh Crl. Misc. No. M-4500 of 2013 -5- otherwise it would defeat the objectives of the provisions of Section 138 of the Act. However, a Magistrate exercising powers under Section 138 of the Act can himself, while appreciating the preliminary evidence, hold an enquiry for his satisfaction regarding the prima facie commission of offence under Section 138 of the Act when the respondent/ accused is resident of different locality, keeping in mind that the list of the accused has not been unnecessarily enlarged with an oblique motive to cause harassment to the accused described as residents of distant areas but holding of an enquiry by police in every case under Section 138 of the Act under Section 202 Cr.P.C. is not the rule of law. It is not out of place to mention here that the judgment in K.Bhaskaran's case (supra) still holds the field despite a little variance in one of the five circumstances in the recent judgment by the Hon'ble Supreme Court in Harman Electronics Private Limited and another Vs National Panasonic India Private Limited, (2009) 1 SCC 720, in which it was held that the single factor of issuance of notice under Section 138 (b) of the Act will not ipso facto tantamount to conferring a jurisdiction on the Courts of the area from where only notice has been issued. Besides this, the judgment in S.K. Bhowmik's case (supra) did not deal with a case constituting of non- cognizable offences particularly offence under Section 138 of the Act. It is held that in the light of the judgment of K.Bhaskaran's case (supra), the ratio of the judgment of S.K. Bhowmik's case (supra) is not applicable in the complaint under Section 138 of the Act and the summoning order in complaint under Section 138 of the Act cannot be questioned solely on the ground of violation of provisions of Section 202 Cr.P.C."
A similar matter came up for consideration before Saini Paramjit Kaur 2013.10.01 18:10 I attest to the accuracy and integrity of this document Chandigarh Crl. Misc. No. M-4500 of 2013 -6- Hon'ble the Supreme Court in National Bank of Oman v. Barakara Abdul Aziz and another', (2013) 2 SCC 488, and the Court, in para 6 of the judgment held as quoted hereinbelow:-
"The duty of a Magistrate receiving a complaint is set out in Section 202 of the Cr.P.C. and there is an obligation on the Magistrate to find out if there is any matter which calls for investigation by a criminal court. The scope of enquiry under this Section is restricted only to find out the truth or otherwise of the allegations made in the complaint in order to determine whether process has to be issued or not. Investigation under Section 202 of the Cr.P.C. is different from the investigation contemplated in Section 156 as it is only for holding the Magistrate to decide whether or not there is sufficient grounds for him to proceed further. The scope of enquiry under Section 202 of the Cr.P.C. is, therefore, limited to the ascertainment of truth or falsehood of the allegations made in the complaint - (i) on the materials placed by the complainant before the Court (ii) for the limited purpose of finding out whether a prima facie case for issue of process has been made out; and (iii) for deciding the question purely from the point of view of the complainant without at all adverting to any defence that the accused may have."
In the case in hand, the complainant stepped in the witness box, reiterated his averments made in the complaint, exhibited documents relied upon, the trial court, on appreciation of averments set up in the complaint when examined in the light of preliminary evidence came to the Saini Paramjit Kaur 2013.10.01 18:10 I attest to the accuracy and integrity of this document Chandigarh Crl. Misc. No. M-4500 of 2013 -7- conclusion that there are sufficient grounds to proceed against the petitioners. The procedure followed by the trial Court cannot be faulted to accept the contention of the petitioner that the trial court did not conduct enquiry in compliance with the requirements of Section 202 of the Code or the process against the petitioner was issued without necessary compliance.
However, before parting with the decision on this issue, it is necessary to point out that Section 138 of the Act was introduced by way of an amendment effective from 01.04.1989. These provisions were introduced with a view to encourage the culture of use of cheques and enhancing the credibility of the instruments. The legislature intended to inculcate faith in the efficacy of banking operations and use of negotiable instruments in business transactions. The penal provision is meant to discourage people from not honouring their commitments by way of payment through cheques. Therefore, the laudable object to prevent bouncing of cheques and sustaining credibility of commercial transactions resulting in enactment of Sections 138 and 141 of the Act are to be kept in mind while deciding the question of quashing for want of some procedural lapse. In this view of the matter, the challenge of the petitioner to the proceedings for want of compliance with the provisions of Section 202 of the Code, is no more sustainable and merits rejection.
In this view of the matter, I do not find any force in the contention of the petitioner that the criminal complaint aforesaid and the proceedings emanating therefrom are liable to be quashed.
In the result, the petition is dismissed leaving the parties to bear their own costs.
(REKHA MITTAL) JUDGE September 20, 2013 PARAMJIT Saini Paramjit Kaur 2013.10.01 18:10 I attest to the accuracy and integrity of this document Chandigarh