Gujarat High Court
Shiv Siddhi Corporation Through Siddhi ... vs State Of Gujarat on 7 December, 2018
Author: Sonia Gokani
Bench: Sonia Gokani
R/CR.MA/15269/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 15269 of 2018
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SHIV SIDDHI CORPORATION THROUGH SIDDHI INFRABUILD PVT. LTD.
THROUGH KALPESH ATMARAM PATEL
Versus
STATE OF GUJARAT
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Appearance:
MR PARTHIV B SHAH(2678) for the PETITIONER(s) No. 1
for the RESPONDENT(s) No. 2
MS JIRGA JHAVERI,ADDL.PUBLIC PROSECUTOR(2) for the
RESPONDENT(s) No. 1
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CORAM: HONOURABLE MS JUSTICE SONIA GOKANI
Date : 07/12/2018
ORAL ORDER
1.This is an application seeking quashment of the Criminal Case No.52531 of 2017, under Section 482 of the Code of Criminal Procedure, pending before the Court of learned Metropolitan Magistrate, Ahmedabad. Applicant herein is the original accused, who has approached this Court being aggrieved by the complaint filed under Section 138 of the Negotiable Instruments Act, 1881 ('the N.I.Act' hereinafter) before the Court of Page 1 of 18 R/CR.MA/15269/2018 ORDER learned Metropolitan Magistrate, Ahmedabad and has sought quashment on the ground that there is neither any legally enforceable debt pending against the applicant nor the applicant has issued the alleged cheque in satisfaction of any legally enforceable debt. The complaint is filed with malice and ulterior motive to extort money from the applicant and harass him. It is a sheer abuse of process of law.
2.It is the say of the applicant that the complainant, his brother Indravadanbhai and father Rameshbhai entered into the deed of partnership dated 20.01.2011 with Shree Siddhi Infrabuild Private Limited, a registered partnership firm. They are partners to the extent of 50% and Shree Siddhi Infrabuild Private Limited is a partner to the tune of remaining 50%. The partnership firm has registration dated 08.02.2012.
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R/CR.MA/15269/2018 ORDER
3.It is further the case of the applicant that after completing all the formalities for putting up the development of land bearing Old Survey Nos.152 and 138 situated at Mouje Jegatpur, the process of amalgamation was carried out and was given the Khata No.114 (hereinafter referred to as 'the subject land').
3.1 After conversion of the subject land from new tenure to old tenure vide order dated 01.03.2011 passed by the learned District Collector, the market value of the same had been determined at Rs.13,75,55,000/ and 80% of the said amount was required to be paid towards premium.
3.2 Since the applicant was inclined to develop the subject land, he obtained title clearance certificate after the search report from the Solicitor and Advocates and on publication of notice.
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R/CR.MA/15269/2018 ORDER 3.4 It is vital to note that the applicant on 15.11.2011 entered into the registered development agreement with the complainant and his family members, where it was decided and agreed upon that they would not have right to reenter the said land. The possession of the subject land was handed over to the applicant. It was agreed that the development agreement and power of attorney executed on the same day, would not be cancelled under any circumstances by the complainant and his family members, who were agreed to be entitled to the market value of the subject land i.e. Rs.41,00,44,000/ from the developers.
3.5 The power of attorney accordingly was executed on 15.11.2011 before the Sub Registrar vide Registration No.33 of 2011. It is the say of the applicant that he has already paid Rs.33,94,66,000/ to the complainant and his family members till date. Page 4 of 18
R/CR.MA/15269/2018 ORDER It is the grievance of the applicant that the Collusive Suit was filed being Regular Civil Suit NO.810 of 2013 before the learned Civil Judge, Ahmedabad (Rural), where the applicant was not made a party and though the complainant and his family members were signatories to the transactions entered into with the developers, that aspect was not uttered in the said suit. However, eventually the said suit came to be settled by and between the parties after the Special Civil Suit No.396 of 2015 was preferred by the present applicant against the complainant and his family members, which was also withdrawn. It is the say of the applicant that the respondent No.2 has wrongly pleaded that the applicant was in need of fund for his business purpose, and therefore, respondent No.2 lent the amount of Rs.2 Crore to the applicant by different cheques in the year 2011, 2012, 2013 and 2014. The applicant returned back the amount of Rs.42,00,000/and Page 5 of 18 R/CR.MA/15269/2018 ORDER for remaining amount of Rs.1.58 Crore, three cheques have been given, one of which is of Rs.25,00,000/ being the cheque No.326277 dated 15.02.2017. The said cheque was presented by the respondent No.2 before his banker on 07.03.2017, which came to be dishonoured with an endorsement 'insufficient funds'. Therefore, the notice under Section 138 of the N.I.Act came to be issued, which was not replied to.
4.This Court has heard the learned advocate, Mr.P.B.Shah appearing for the applicant, who has urged that the person can be prosecuted only if he is the drawer of the instrument. It is the cheque which is drawn in individual capacity. The complaint is filed against the partner of the partnership firm, who is the director of the company and the company is the partner in the partnership firm. Therefore, the person, who has drawn the cheque is not made an accused. Again, the Page 6 of 18 R/CR.MA/15269/2018 ORDER partner of the partnership firm, which was the director of the company and the company, which is the partner in the partnership firm unless made the accused, no ingredients of Section 138 of the N.I.Act would be attracted. He has further urged that there is no legally existing debt which can be recovered. It is further his say that in the present form, the complaint is not sustainable. Again, it is urged that reply to the mandatory notice which is to be issued before filing of the complaint under Section 138 of the N.I.Act, since is not a must, the same has not been given.
5.Learned Additional Public Prosecutor, Ms.Jirga Jhaveri appearing for respondent State has also been heard, who has supported the complainant.
6.On thus hearing the learned advocates, at the outset this Court notices that the present applicant has not replied to the notice under Page 7 of 18 R/CR.MA/15269/2018 ORDER Section 138 of the N.I.Act. Although issuance of notice to the drawer is a must before the complaint can be lodged under Section 138 of the N.I.Act reply to such a notice may not be necessary under the law. However, averments set out in the notice if have been replied to, the correctness of the same can be verified during the course of trial so also at the time of recordance of evidence.
7.It appears that the present applicant is one of the partners of the firm which is Shree Siddhi Infrabuild Private Limited and there is a development agreement as mentioned hereinabove wherein he has been given all the powers to act for and on behalf of the firm.
8.Learned advocate, Mr.P.B.Shah has relied upon the decision rendered in case of Jai Karsanbhai Ukani vs. State of Gujarat, reported in (2017)(0)AIJELHC 238322 deserves a reference here. In the said decision, the Page 8 of 18 R/CR.MA/15269/2018 ORDER cause title indicated that the accused person was joined as an individual in the capacity of the director, and the allegations were also accordingly made in the individual capacity. However, the cheques in question which were from account of the company and signed by the director of the company. It was not in dispute that the cheques were from the account of the company and the goods supplied were also to the company and the invoice issued was also in the name of the company, thereby indicating that the transaction by the complainant is with company. The statutory notice was also issued in the name of the director and not the company. The proof of service of such statutory notice indicated that the notice having been served to the individual in the capacity of the director and not to the company. Therefore, relying on the decision of the Apex Court rendered in case of Aneeta Hada vs. Page 9 of 18 R/CR.MA/15269/2018 ORDER Godfather Travels and Tours (P)Ltd., reported in (2012) 5 SCC 661, the Court deemed it fit to quash the criminal proceedings. 8.1 This would have no applicability so far as the present case is concerned as could seen from the factual matrix. In criminal matters essentially, what firstly remains vital is the set of facts in the given case and the applicability of ratio decidendi is always to the facts of any case.
9.He has also relied on the decision of Mulijibhai Vishram Varsani vs. Ishwarbhai R. Joshi insisting on the joining of the partnership firm in the criminal complaint.
10. Adverting to the facts of the instant case, this Court notices that the mandatory notice prior to lodgment of FIR had been issued upon the partnership firm and the present applicant as a partner and the director of Shree Siddhi Infrabuild Private Page 10 of 18 R/CR.MA/15269/2018 ORDER Limited has been impleaded as a party in the matter.
10.1 In the Court of learned Additional Metropolitan Magistrate after the complaint under Section 138 of the N.I.Act came to be filed, the Court had kept if for an inquiry under Section 202 of the Code of Criminal Procedure and thereafter ordered issuance of summons against the present petitioner by a brief reasoned order dated 14.08.2017 for taking cognizance under Section 142 of the N.I.Act. Thereafter, much time was given to the petitioner following the decision of Meters and Instruments Private Limited and Anr. vs. Kanchan Mehta, reported in AIR 2017 SC 4594, and yet, when the petitioner did not appear, the Court rejected his exemption application. It emerges from the earlier order passed by this Court on 20.08.2018 that an order came to be passed on an application for cancellation of the arrest warrant and the Trial Court had fixed the matter for recording the plea of the applicant Page 11 of 18 R/CR.MA/15269/2018 ORDER on 21.08.2018 and at that stage, he has approached this Court and without staying the proceedings, this Court permitted him to take an adjournment before the Court of learned Metropolitan Magistrate (Court No.28) as this matter was scheduled on 27.08.2018. Relief started continued to be extended time and again and it is given to understand that due to pendency of this petition, matter before the Trial Court has not proceeded.
10.2 It is to be noticed that the Court below, while issuing the summons, has made preliminary inquiry to find the complaint to have been filed within the time limit permitted and the Court having jurisdiction so also on the signature of the cheque being the party impleaded.
10.3 If one examines prima facie, the deed of partnership of M/s.Shiv Siddhi Corporation dated 20.01.2011, and the same is between Shree Siddhi Infrabuild Private Limited Company incorporated under the Companies Act, Page 12 of 18 R/CR.MA/15269/2018 ORDER Mr.Indravadan Patel and Mr.Shasheevadan Patel and Mr.Rameshbhai Patel. The same has been signed for Shree Siddhi Infrabuild Private Limited Company by Mr.Kalpesh A. Patel as its Director. Compromise by way of a joint pursis in Special Civil Suit No.396 of 2015 and the Arbitration Application No.221 of 2015 under Section 9 of the Arbitration Act again are between the very parties where M/s.Shiv Siddhi Corporation, represented by Mr.Kalpesh Patel is on one side and other petitioners are on the other side. In the First Appeal No.2474 of 2015 and allied matters, the Division Bench disposed of the matters as the parties had settled their disputes amicably in writing.
10.4 In this backdrop, when the cheque is signed by Mr.Kalpesh Patel as a director of the company which was the partner of the partnership firm, whether there exists legally enforceable debt or not, is not the question to be gone into by this Court. Present petitioner would fall into the definition of of 'drawer' under Section 7 of the N.I.Act and impleadment of firm is already there as contemplated in the permission, which is not a separate entity than the partner. Page 13 of 18
R/CR.MA/15269/2018 ORDER 11. It can be seen prima facie from the
record that the mandatory notice issued prior to the filing of the complaint under Section 138 of the N.I.Act as mentioned herein above has not been replied. Other issues raised before this Court are already at large before the Competent Court and involves largely and essentially disputed questions of facts.
12. Prima facie, as discussed hereinabove this Court has found that in the present form, as shown in the cause title and even as can be culled out from the partnership deed and the development agreement entered into by and between the parties, the complaint lodged under Section 138 of the N.I.Act cannot be quashed.
13. Apt would be to refer to the decision of the Apex Court rendered in case of Dineshbhai Chandubhai Patel vs. State of Gujarat, reported in AIR 2018 SC 314. The Apex Court Page 14 of 18 R/CR.MA/15269/2018 ORDER was considering the appeals against the common final judgment and order passed by this Court in Criminal Misc. Application No.16731 of 2016 and other allied matters, where the Court had quashed the complaint exercising its power under Section 482 of the Code of Criminal Procedure. Before the Apex Court, the challenge was essentially to the registration of the first information report. The Court held that in case of State of West Bengal & Ors. vs. Swapan Kumar Guha & Ors., reported in AIR 1982 SC 949, the Court had examined the exercise of inherent powers of the High Court in context of challenge to the first information report and the law laid down there would have a direct applicability to the facts of the case against law laid down in the two decisions referred to being D.P.Gulati vs. State of Uttar Pradesh and Ors., reported in (2015) 11 SCC 730 and Harshendra Kumar D vs Rebatilata Koley Etc, Page 15 of 18 R/CR.MA/15269/2018 ORDER reported in (2011) 3 SCC 351. The Apex Court in clear terms had held that the once the Court finds that the first information report does disclose prima facie commission of any cognizable offence, it should stay its hands and/or would allow the investigating agency to step into and follow the procedure as prescribed. The High Court is not expected to go into the minutest details in relation to every aspect of the case and devote a long judgment to quash the first information report exercising it inherent jurisdiction under Section 482 of the Code of Criminal Procedure.
13.1 In case of Hmt Watches Ltd vs. M.A.Abida and another, reported in (2015) 11 SCC 776, the Apex Court while holding that though the High Court has enormous power under Section 482 of the Code of Criminal Procedure, such power needs to be exercised continuously. It is further held that the Page 16 of 18 R/CR.MA/15269/2018 ORDER criminal proceedings when are challenged by taking factual defences like whether the cheques were given for security or not, or whether there existed any outstanding liability or not, are the questions of facts and there issues can only be determined by trial court after recording evidence. The High Court has held to have erred when it gave its findings on disputed questions of fact of validity or otherwise of demand notice issued under Section 138 of the N.I.Act and authenticity of signature thereon. This has been held unsustainable for being the travel beyond jurisdiction of Section 482 of the Code of Criminal Procedure.
13.2 The facts pleaded in the instant case are predominantly factual defences of the petitioner and are not based on admitted documents with unimpeachable character to hold without the trial that the complaint is Page 17 of 18 R/CR.MA/15269/2018 ORDER in exercise to harass the complainant and also the result of malicious design on the part of the complainant.
14. Let the proceedings of Section 138 of the N.I.Act be proceeded by the Trial Court on expeditious basis bearing in mind the object and reasons so also the directions issued in case of Meters and Instruments Private Limited and Anr. vs. Kanchan Mehta reported in AIR 2017 SC 4594.
15. With the above, present application is disposed of as dismissed. Interim relief, if any, stands vacated. Direct Service is permitted.
(MS SONIA GOKANI, J) M.M.MIRZA Page 18 of 18