Gujarat High Court
Hope Integrated Rural Development vs State Of Gujarat & on 4 February, 2013
Author: K.M.Thaker
Bench: K.M.Thaker
HOPE INTEGRATED RURAL DEVELOPMENT SOCIETYV/SSTATE OF GUJARAT R/SCR.A/71/2013 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CRIMINAL APPLICATION NO. 71 of 2013 ============================================================== HOPE INTEGRATED RURAL DEVELOPMENT SOCIETY & 1....Applicant(s) Versus STATE OF GUJARAT & 1....Respondent(s) ============================================================== Appearance: MR ANIL H SONI, ADVOCATE for the Applicant(s) No. 1 - 2 PUBLIC PROSECUTOR for the Respondent(s) No. 1 ============================================================== CORAM: HONOURABLE MR.JUSTICE K.M.THAKER Date : 04/02/2013 ORAL ORDER
1. In present petition under Section 482 of Criminal Procedure Code, the petitioners have prayed that:
23(A) The Honourable Court be pleased to issue appropriate writ order or direction thereby quashing the Criminal Complaint No.642 of 2012 (Annexure-A) filed by the respondent no.2, and pending before the learned Metropolitan Magistrate, Court No.30, Negotiable Instruments Court at Ahmedabad by declaring the same as sheer abuse of process of law in the interest of justice.
(B) The Honourable Court be pleased to admit and allow the present petition by issuing appropriate writ, order or direction by quashing and setting aside the impugned summons dated 13.06.2012 (Annexure-B), passed by the Ld. Metropolitan Magistrate, Court No.30, Negotiable Instruments Court, Ahmedabad in Criminal Complaint 642 of 2012 by declaring the same as without jurisdiction, contrary to the provisions of law, without application of judicial mind and in violation of principles of natural justice.
2. The petitioners have prayed that Criminal Case No.642 of 2012 filed by present respondent No.2 under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the Act) against the present petitioners may be quashed at its threshold.
3. It emerges from the record and submissions by learned counsel for the petitioners that the petitioners availed loan from present respondent No.2 for its activities.
3.1. It also emerges from the record and submissions by learned counsel for petitioners that respondent No.2 had extended finance to the petitioners at least on three occasions i.e. in April 2010, July 2010 and September 2010, total of which comes to about Rs.1,53,50,463/-.
3.2. It also emerges from the record and submissions by learned counsel for petitioners that on each occasion, the petitioner No.1 had executed loan agreement/s in favour of respondent No.2 and also issued five undated cheques, each of Rs.10 lakhs, in favour of the respondent No.2 company.
4. It is pertinent that according to petitioners admission, the petitioners had issued to the respondent No.2 company 15 undated cheques aggregating Rs.1.5 crores as security. The petitioners have further claimed that somewhere in December 2011 it had informed the respondent No.2 that the cheque which was given by the petitioners may not be presented.
4.1. It appears that in April 2012 the respondent No.2 served the statutory notice upon the petitioners purporting to be notice under Section 138-B of the Act. It is the case of the petitioners that the said notice was served in connection with one cheque, which, according to the notice, was cheque bearing No.147621 draw on AXIS Bank, Kurnool Branch, for an amount of Rs.1,49,29,365/-.
4.2. It appears that the cheque issued by the petitioners was deposited by the respondent no.2 for encashment. However, the cheque was not honoured and therefore respondent No.2 issued the said statutory notice. In the said statutory notice the respondent no.2 stated inter alia that:
3. You no.2 on behalf of you no.1 have duly executed number of documents and had borrowed Micro Credit Facilities type loan available from F.W.W.B. which has been latter handed over by F.W.W.B. to my client s company after completing all legal formalities. Latter on, our client company has also executed various agreement with you no.1 and on behalf of you no.1, you no.2 and K.Sesha Giri(Vice President) have duly executed number of documents with my client s company and as per the terms and conditions of the agreement you have borrowed different type of loan from my client of which you both are legally liable to pay all the outstanding amount to my client s company.
Out of which as on February 2012 the total outstanding principal amount of loan is Rs.1,33,62,269/-. Whereas per my client s account the principal overdue of is Rs.4,09,32,183/-+ interest overdue is Rs.1,32,23,382/- + interest overdue is Rs.21,27,081/-. Thus, the total outstanding overdue amount is Rs,1,53,50,463/- which you both are liable to pay as per agreed terms and conditions of the loan. On demand from my client in lieu to make the payment of the above outstanding due you have issued a cheque No.147621 of AXIS Bank Ltd., Kurnool Branch, in favour of my client s company of Rs.1,49,29,365/- with a commitment that the cheque shall be honoured by your bankers when presented for clearance on respected date.
4. Thereafter, my client has deposited the above mentioned cheque for clearance on 5.3.2012 before their bankers in their bank account i.e. at AXIS Bank, for clearance. Thereafter, my client s banker had sent the cheques for encashment at your banker s office i.e. at AXIS Bank Ltd. at Law Garden Branch. But the cheque was not accepted and was bounced for the reason of Funds Insufficient for which duly signed return memos was issued by your bankers of dated 06.03.2012 and the same return memo as well as bounced cheque was returned by my client s banker to my client on 07.03.2012. Thus, all the information was received by my client on 07.03.2012 from his bankers. Thereafter, my client has informed to you for the same but, there was no good response from your part. Therefore, for you both are jointly as well as severally liable for all the same.
5. The petitioners have claimed that the notice was replied by the petitioners vide communication dated 16.04.2012. In reply to said statutory notice the respondent No.2 forwarded its response vide letter dated 16.04.2012 wherein it stated inter alia that:
7. My Clients further informed that, while this organization had paid on time repayment installments to lenders on prescribed schedule till October, 2010 and then the drop in percentage of recovery forced the organization to go for re-phasing of loans and accordingly briefed the facts detailing the incidents occurred during the last one year in Andhra Pradesh and in particular in our operational area of Ananya Finance and requested Ananya Finance not present the cheques, vide our letters dated 04.05.2011, 20.06.2011, 08.11.2011, 14.011.2011, 31.12.2011 and 05.04.2012. We have also requested them to give some time for this organization as we are facing tough time in the industry and invoked the force majeure since the circumstances are beyond control and unable to perform. We believe that these facts have not come to your notice and request to brief them accordingly. As stated in your notice the matter is of purely civil in nature and can agitate basing on documents available with them without disturbing the business relation which is build on mutual confidence over a period of time. (emphasis supplied) 5.1. Thus the respondent No.2 admitted that it was short of funds.
5.2. It is claimed by the petitioners that despite such reply by the petitioners the respondent No.2 proceeded to lodge criminal case against the petitioner which came to be registered as Criminal Case No.642 of 2012.
5.3. It appears that after following the procedure, the learned trial Court passed order dated 11.06.2012 directing that process may be issued against the petitioners. Subsequently, the petitioners seem to have appeared before the learned trial Court. The learned trial Court passed order dated 11.06.2012 directing that process shall be issued and in compliance process was issued on 13.06.2012. However, when the petitioners did not get the plea recorded and instead submitted that the petitioners desire to prefer revision application and prayed for time on such ground.
5.4. Therefore, learned trial Court passed order dated 18.12.2012 recording that the petitioner had declined to get the plea recorded. Thereafter, the petitioner preferred present petition. In the petition the petitioner has claimed that:-
8. That under the aforesaid understanding the finance was provided by the Respondent No.2, to the petitioner in the form of loans, which was strictly utilized for on-lending to the member of the Self Help Groups (SHG)/Joint Liability Groups (JLG) who are poor women and have no access to the regular banking facilities. All such loans were disbursed to the needy SGH/JLG member s collateral free as per the law related to the micro-financing.
The true and correct copies of the 15 undated cheques are annexed herewith as Annexure-D.
11. That till October 2010 the Petitioner No.1 was punctual in the repayment of the finance provided by the Respondent No.2, in the shape of loans, however, after October 2010 due to the sudden and drastic drop of recovery of the monies on lent by the petitioner, the petitioner was forced to seek a re-phasing of loans and accordingly the petitioner apprised the respondent No.2 with the prevailing ground reality vide letter dated 31.12.2011. It was clearly informed the Respondent No.2 that the prevailing situation is beyond the control of the petitioner. Here it is pertinent to point out that the petitioner used to make repayment to the Respondent No.2 through online transfers, however, since there was a threat from the side of the respondent no.2 of presenting the security cheque encashment towards the outstanding loan amounts due to the petitioner No.1, therefore, the petitioner also made request to the Respondent no.2, that those cheques be not presented as there was no recovery and, therefore, no funds available with the petitioner s bank account.
13. That vide the reply notice dated 16.04.2012 the petitioner categorically denied issuance of the alleged cheque no.147621 of AXIS Bank Ltd., Kurnool Branch, in favour of the Respondent No.2 of Rs.1,49,29,365/- (One Crore Fourty Nine Lakh Twenty Nine Thousand Three Hundred Sixty Five only) was also categorically mentioned that whatever cheques were issued they were issued towards the security and not in discharge of existing debt/enforcement of debts and the transaction was civil in nature. By that reply notice the petitioner also urged that all the blank cheques which are in that possession of the Respondent No.2 be returned to the petitioner.
6. When asked as to whether revision application was preferred or not, learned counsel for petitioners submitted that he does not know the factual position as to whether any revision application was preferred by the petitioners or not. He submitted that he is aware about present proceedings and any other instructions have not been conveyed to him.
7. Mr.Popat, learned advocate for Mr. Soni, learned counsel for petitioner has appeared and submitted that the statutory notice was issued in connection with cheque bearing No.147621, whereas the complaint which has been filed by the respondent no.2 is in connection with another cheque i.e. cheque bearing No.171221. By mentioning the said details, learned counsel for petitioner has tried to contend that the complaint has been filed for a cheque for which notice has not been issued, whereas notice has been issued in connection with a cheque for which complaint/case has not been filed and that therefore the criminal case deserves to be quashed. Learned counsel for petitioners further contended that in view of the provisions contained in the loan agreement, particularly Clause No.5.1 of the loan agreement, the petitioners are protected and therefore also the proceedings under Section 138 of the Act are not maintainable and the same deserve to be quashed. Any other contention is not raised.
8. I have heard learned counsel for petitioner at length. I have also considered the material placed on record.
9. It has emerged that it is not in dispute that the petitioners availed loan from respondent No.2.
9.1. It is also not in dispute that the cheque, though presented by respondent No.2, has been dishonoured.
9.2. It is in background of such fact that the respondent No.2, after complying the procedure prescribed under the Act, filed the case which came to be registered as Criminal Case No.642/2012.
9.3. After examining the material on record the Court issued process vide order dated 11.06.2012.
10. The contention which is raised by the petitioner i.e. in light of and on strength of Clause No.5.1 of the loan agreement is in nature of defence which can be and ought to be raised before the learned Magistrate.
11. In view of the undisputed facts that cheques were issued by the petitioners and the cheques, on due presentation, have been dishonoured, it would not be proper for this Court, at this stage, to entertain the petition and quash the proceedings without permitting proper and regular trial wherein the defence sought to be raised by the petitioners can be examined by the learned trail Court in light of the evidence which may be made available on record by both the sides and the petitioners are subjected to regular trial including cross-examination.
12. Now, so far as the other contention about the discrepancy in cheque number mentioned in the notice and cheque number mentioned in the complaint is concerned, learned counsel for the petitioner relied on the document at Annexure-H page 69 and particularly relying on para 3 of the notice at Annexure-H page 70 and on the basis of the details mentioned therein the aforesaid contentions came to be raised.
12.1.When the document at Annexure-H page 69 to 72 is examined, it emerges that the document which is placed on record of present petition at Annexure-H page 69 to 72 claiming that it is the said notice in connection with which the complaint has been filed and there is discrepancy between the details mentioned in the notice and the details mentioned in the complaint, it emerges that the said document is dated 05.04.2012 however in the complaint reference is made of 09.04.2012. The learned counsel for the petitioner claimed that the said notice was served to the petitioner on 9th April 2012 and in the complaint the date 09.04.2012 is mentioned as the date of service of notice.
13. The said notice was replied by the petitioner vide its letter dated 16.04.2012. On perusal of said reply it emerges that the petitioner has not mentioned the said aspect in its reply dated 16.04.2012 and any dispute or contention on ground of alleged discrepancy (which is raised for the first time in the petition) is not raised in said reply dated 16.04.2012. On the contrary what is stated in the reply dated 16.04.2012 is as under:
It is informed by my Clients that they never issued cheques for repayment of the loan and on the other hand my Client is in the habit of remitting money by way of RTGS (on line bank transfer) only as and when it arises in terms of repayment of loan installments. Your client had used some of the cheques given for security and used it for foisting a case against this organization. Further, it is informed that cheques issued as security for the performance of contract, there is no discharge of existing debt/enforcement debt, and the transaction was a civil in nature. Therefore, the cheques issued to Ananya Finance by my Client to be treated as security for credit supply and it has not been issued to discharge any enforceable liability or debt. (emphasis supplied)
14. From the said reply it does not come out that any dispute on ground of so-called discrepancy was raised in the reply. On the contrary, it emerges that the petitioner claimed that the cheques were issued by it but they were issued as security and not for discharging debt.
Such contentions are in nature of defence which can be and should be raised and proved in trial and request for quashing of complaint cannot be granted in petition under Section 482 of the Code on such ground.
14.1.Thus, in the reply or at any other point of time until submission of this petition the said contention does not appear to have been raised by the petitioner. It appears that the contention raised on the alleged discrepancy is raised for first time in present petition and was not mentioned/raised in the reply given by the petitioner in response to the statutory notice issued by the respondent before filing the criminal case/complaint in the learned trial Court.
the petitioner can raise such contention and allegation before the learned trial Court and such objection can be examined by the learned trial Court in light of the evidence and other material which may be placed on record by the complainant and the accused i.e. the respondent and present petitioners.
14.2.It further appears that the petitioner has not even filed reply in the learned trial Court in response to the complaint filed by the respondent.
14.3.From the submissions by learned counsel for the petitioners it appears that more than one cheques issued by the petitioners have been dishonoured and more than one complaints are filed against the petitioners.
14.4.In such circumstances, it is neither possible nor proper for this Court to examine and decide the said claim and allegation of the petitioner at this stage (i.e. when even reply is not filed by the petitioner in the learned trial Court) and in present petition.
14.5.The said claim and allegations of the petitioner are in nature of defence and that therefore the petitioner can raise such contention and allegation before the learned trial Court and such objection can be examined by the learned trial Court in light of the evidence and other material which may be placed on record by the complainant and the accused i.e. the respondent and present petitioners which can be and ought to be raised before the learned trial Court where it can be examined in light of the evidence which may be brought on record by respondent.
14.6.The said aspect and alleged discrepancy can be examined, verified and explained only before the learned trial Court on the basis of the evidence and material which may come on record.
It would not be proper or justified for this Court to examine anything at this stage about the alleged discrepancy which requires and necessitates proper evidence.
14.7.The contentions about the alleged discrepancy is in nature of defence which obliges the petitioners to adduce relevant appropriate evidence in support of its allegations and contentions based on discrepancy.
15. At this stage, on prima facie reading of the material which is placed on record, it is not possible for this Court to accept the petitioners contention that the criminal case may be quashed it its threshold in light of the contentions which are raised in present petition.
16. The petitioners are not justified in contending at this stage in proceedings under Section 482 that the criminal case lodged by the respondent No.2 under Section 138 of the Act, upon the cheque/s issued by the petitioners having been dishonoured, may be quashed, more particularly when the fact that the petitioners availed loan facility from the respondent and had issued certain cheques to the respondent No.2 and some of the cheque/s has/have been dishonoured, the Court would not be justified in interfering with the proceedings of criminal case at this stage.
17. In view of this Court, this is not a case wherein any strong and exceptional circumstance, which would justify interference by this Court under Section 482 of the Code at the threshold and which would justify any order by the Court to terminate the proceedings under Section 138 of the Act at its threshold, is made out.
18. In light of the facts and circumstances of the case the contentions which are sought to be raised are in nature of defence which can be examined by the learned trial Court in light of the evidence which may be made available on the record. Therefore, it would not be justified for the Court to interfere with the said proceedings at this stage.
Hence, the petition does not deserve to be entertained and is accordingly disposed of.
(K.M.THAKER, J.) Jani 13