Rajasthan High Court - Jaipur
Archana Mittal W/O Sh. Harish Kumar ... vs Anand Rathi Global Finance Ltd on 31 August, 2022
Author: Birendra Kumar
Bench: Birendra Kumar
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
S.B. Criminal Miscellaneous (Petition) No. 2589/2022
Archana Mittal W/o Sh. Harish Kumar Mittal, Aged About 67
Years, R/o 214, Ncpa Apartment, B Wing, Nariman Point,
Mumbai 400021
----Petitioner
Versus
Anand Rathi Global Finance Ltd., Office 8Th Floor, Express Zone,a
Wing, Opp. Oberoi Mall, Malad, Mumbai -400063 Through Its
Branch Office At C-98, Fourth Floor, Sanghi Upasana Tower,
Subhash Marg, C Scheme, Jaipur-302001.
----Respondent
For Petitioner(s) : Mr. V.R. Bajwa Senior Counsel with
Mr. Naman Maheshwari, Mr. Manish
Parmar, Adv.
For Respondent(s) : Mr. Pankaj Gupta, Adv.
HON'BLE MR. JUSTICE BIRENDRA KUMAR
Judgment reserved on : 22/08/2022
Date of Pronouncement : 31/08/2022
REPORTABLE
1. The petitioner is an accused in complaint case No.
1701/2021. In the instant petition under Section 482 Cr.P.C, the
petitioner has challenged the complaint petition as well as order of
cognizance dated 9.4.2021 passed in the aforesaid complaint case
and the subsequent orders of summons and issuance of warrant of
arrest.
The challenge is on the ground that the complaint petition as
well as cognizance order both suffer from non compliance of
mandates of law rather they are contrary to the provisions of law.
2. The factual matrix of the case is that the petitioner is
Director of Mercator Limited Company, a company incorporated
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under the Companies Act. The respondent Anand Rathi Global
Finance Limited is a non banking company. On 3.11.2017, the
petitioner and respondent Company executed a loan agreement at
Mumbai for a credit facility in the nature of working capital loan
for a sum of Rs. twenty crores. At the time of execution of loan
agreement, the petitioner had submitted certain documents
including post dated cheques with clear stipulation in the
agreement that those cheques may be used by the lender in
realization of due amount.
Initially, the loan agreement was for one year however, it
was extended till 2.11.2019 only after the petitioner furnished
double the security amount. On failure of the petitioner to pay
back the loan amount, a demand notice of rupees eighteen crore
sixteen lacs five thousand seven hundred and seventeen only was
served on the petitioner. Thereafter, one of the post dated cheque
deposited with the respondent bearing cheque No. 000149 of the
total due amount of rupees eighteen crores and odd as referred
above was placed before the Bank at Mumbai on 2.8.2019 for
clearance. On 6.8.2019, the cheque was dishonoured for the
reason for insufficient funds. Thereafter respondent sent a legal
notice on 13.8.2019 to the petitioner and the petitioner vide his
reply denied the allegations. Thereafter Respondent No.2 filed a
complaint case bearing CC No. 5238/SS/2019 before the learned
Metropolitan Magistrate, Ballard Pier, Mumbai.
During pendency of the aforesaid complaint case, the
respondent used another post-dated cheque bearing No. 000150
dated 22.2.2021 of rupees twenty crores which included interest
on already due amount of rupees eighteen crores and odd. This
cheque was presented before the Yes Bank, Ashok Marg Branch,
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C-Scheme, Jaipur. This cheque also could not be honoured due to
insufficient fund then legal notice was sent to the petitioner for
payment of the amount and on failure, the impugned complaint
petition was filed.
3. Mr. V.R. Bajwa, learned Senior counsel for the petitioner
contends that for payment of the same due amount, first cheque was presented and for dishonour of the same above referred complaint case was filed before the Court at Mumbai. There was no reason or legal authority with the respondent to use the second cheque for realization of the same amount. Learned counsel has relied upon the judgment of the Hon'ble Supreme Court in Lalit Kumar Sharma & Anr. Vs. State of U.P. & Anr., reported in (2008) 5 SCC 638.
4. Learned counsel for the respondent Mr. Pankaj Gupta contends that since there was clear understanding between the parties in the loan agreement itself that cheques would be used for realization of the due amount by the lender and first cheque presented before the bank had already bounced for insufficient funds, the presentation of the second cheque was not prohibited especially when the due amount was not realized.
In Lalit Kumar Sharma (supra), the cheque presented before the bank for realization of enforceable debt had bounced. Thereafter, a criminal complaint was there under Section 138 of the Negotiable Instruments Act (in short "N.I. Act"). In the criminal complaint, the parties entered into a compromise and in pursuance of the compromise the accused handed over another cheque to the complainant. This cheque also bounced thereafter again a complaint was filed. When the matter reached to the (Downloaded on 01/09/2022 at 09:55:43 PM) (4 of 13) [CRLMP-2589/2022] Apex Court, the Hon'ble Apex Court in Para 16 and 17 held as under:
16. Ingredients of Section 138 of the Act are as under:
(i) that there is a legally enforceable debt;
(ii) that the cheque was drawn from the account of bank for discharge in whole or in part of any debt or other liability which presupposes a legally enforceable debt;
and
(iii) that the cheque so issued had been returned due to insufficiency of funds.
17. Thus, the second cheque was issued by Manish Arora for the purpose of arriving at a settlement. The said cheque was not issued in discharge of the debt or liability of the Company of which the appellants were said to be the directors. There was only one transanction between Shri Ashish Narula, Shri Manish Arora, Directors of the Company and the complainant. They have already been punished. Thus, the question of entertaining the second complaint did not arise. It was, in our opinion, wholly misconceived. The appeal, therefore, in our opinion, must be allowed. It is directed accordingly. Respondent shall bear the costs of the appellants. Counsel's fee assessed at Rs. 25,000/-.
5. In the case on hand, the first cheque was for realization of the entire due amount. The criminal case for dishonour of the said cheque was already pending under Section 138 of the N.I. Act against the petitioner. In the circumstances, presentation of the second cheque for realization of the same amount and filing of the second complaint under Section 138 of the N.I. Act was misconceived.
6. Learned Senior Counsel for the petitioner next contends that the impugned complaint case No. 1701/2021 was filed on 30.3.2021 before the Court at Jaipur during pendency of the first (Downloaded on 01/09/2022 at 09:55:43 PM) (5 of 13) [CRLMP-2589/2022] complaint as referred above at Mumbai, the subsequent complaint at Jaipur was barred under Section 142-A (2) of the N.I. Act.
7. To contra, the learned counsel for the respondent contends that the respondent had already filed an application for withdrawal of the case at Mumbai on 10.2.2021, therefore, it would be deemed that the case at Mumbai was withdrawn on 10.2.2021 itself.
8. Here, it would be apt to reproduce some relevant portion of the reply filed by the respondent in this case:
"..... Interestingly, the petitioner fails to mention that there was no amicable settlement between the parties and the withdrawal of the matter before the Metropolitan Magistrate, Mumbai was a unilateral act by the respondent on the sole basis that the petitioner promised to repay the due amount."
Therefore, it is admission of the respondent that complaint at Mumbai was withdrawn unilaterally.
"Para 3(g), the withdrawal application was taken on Board by the Additional Metropolitan Magistrate on 10.2.2021. Thereafter, the Court listed the matter on 10.4.2021 before the Lok Adalat. A copy of the Roznama dated 10.2.2021 is attached herewith as annexure-R 3.
(h) that on 10th April, 2021 the Additional Metropolitan Magistrate noted that "as Lok Adalat is postpone till further orders, case is adjourned for withdrawal". A copy of the Roznama dated 10.4.2021 is attached herewith as annexure R 4.
(i) that on 1.8.2021, the complaint before the Additional Metropolitan Magistrate was withdrawn citing erroneous reasons. The Roznama stated "Case Put Up Beefore Lok Adalat. Complainant Pt with Adv. Case is amicably settled.
Order Passed Below Exh. 1 Accused is/are Acquitted."Furthermore, the Magistrate's order dated 1.8.2021 also incorrectly states that the complaint was withdrawn "in view of compromise memo". It is pertinent to note that neither Respondent's withdrawal application, nor any arguments made by the Respondent's counsel stated an amicable settlement as the reason behind the withdrawal."(Downloaded on 01/09/2022 at 09:55:43 PM)
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9. From the statement aforesaid, it is evident that complaint at Mumbai was withdrawn on 1.8.2021. Therefore, submission that withdrawal would be effective from the date of presentation of the petition is misconceived because withdrawal is subject to satisfaction of the Magistrate that there are sufficient grounds for permitting withdrawal as provided under Section 257 Cr.P.C which is under Chapter of "trial of summons cases" and applies in the matter of trial of a case under Section 138 of the NI Act. No contrary provision has been brought to the notice of the Court which permits discretion only to the complainant to withdraw the complaint case without permission of the Court or that withdrawal would be effective from the date of presentation of the petition.
10. In Md. Rafique @ Chachu vs. State of West Bengal JT 2008 (12) SC 506, the Hon'ble Supreme Court stated that where a party asserts that something has wrongly been recorded in a judgment or order, it is incumbent upon the party, while the matter is still fresh in the minds of the Judges, to call the attention of the very Judges who had made the record.
11. Therefore, if the respondent had any reservation on wrong recording of the order by the Court at Mumbai, attention of the said Court could have been drawn to the fact, which has not been done in the present case by the respondent. Therefore, it is established from the record that on the date of filing of the complaint at Jaipur on 30.3.2021 against the same drawer of cheque against whom a case under Section 138 NI Act was already pending at Mumbai the subsequent complaint could have been made at Mumbai Court itself in view of provisions of Section (Downloaded on 01/09/2022 at 09:55:43 PM) (7 of 13) [CRLMP-2589/2022] 142-A sub-section (2). The entire provisions of Section 142A is reproduced below:
142-A Validation for transfer of pending cases:-(1). Notwithstanding anything contained in the Code of Criminal Procedure, 1973 or any judgment, decree, order or direction of any court, all cases transferred to the court having jurisdiction under sub-section (2) of section142, as amended by the Negotiable Instruments (Amendment) Ordinance, 2015, shall be deemed to have been transferred under this Act, as if that sub-section had been in force at all material times.
(2) Notwithstanding anything contained in sub-section (2) of section 142 or sub-section (1), where the payee or the holder in due course, as the case may be, has filed a complaint against the drawer of a cheque in the court having jurisdiction under sub-section (2) of section 142 or the case has been transferred to that court under sub-
section (1) and such complaint is pending in that court, all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court irrespective of whether those cheques were delivered for collection or presented for payment within the territorial jurisdiction of that court.
(3) If, on the date of the commencement of the Negotiable Instruments (Amendment) Act, 2015, more than one prosecution filed by the same payee or holder in due course, as the case may be, against the same drawer of cheques is pending before different courts, upon the said fact having been brought to the notice of the court, such court shall transfer the case to the court having jurisdiction under sub-section (2) of section 142, as amended by the Negotiable Instruments (Amendment) Ordinance, 2015, before which the first case was filed and is pending, as if that sub-section had been in force at all material times."
12. The complainant/respondent was conscious that an earlier complaint against drawer of the cheque (petitioner herein) was already pending before the competent court at Mumbai, therefore, in view of the provisions of sub-section (2) of Section 142-A above, the present complaint could have been filed before the Mumbai Court and not before the Jaipur Court. (Downloaded on 01/09/2022 at 09:55:43 PM)
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13. Learned Senior counsel for the petitioner next contends that under Section 200 Cr.P.C, on presentation of a complaint, the Magistrate is required to examine the complainant and witnesses. He is required to peruse the allegations in the complaint, statements of the complainant and witnesses to arrive at a satisfaction that there are sufficient grounds for proceeding against the accused. Where the accused resides beyond territorial jurisdiction of the Magistrate, (as in the present case, the petitioner resides at Mumbai), holding of an inquiry under Section 202 Cr.P.C was mandatory before issuance of summons. The Magistrate has not complied with the aforesaid provision of law. Reliance has been placed on the judgment of the Hon'ble Supreme Court in Birla Corporation Limited vs. Adventz Investments and Holdings Limited & Ors. reported in JT 2019 (5) SC 475, Sunil Todi & Ors. Vs. State of Gujarat and Anr. reported in AIR 2022 SC 147 and a Constitution Bench judgment of the Supreme Court in Re: Expeditious Trial of Cases Under Section 138 of N.I. Act 1881 reported in AIR 2021 SC 1957, in support of contention that inquiry under Section 202 Cr.P.C. is mandatory where the accused resides beyond territorial jurisdiction of the Court which has not been done in the present case.
14. Learned counsel for the respondent has also relied upon Sunil Todi's judgment (supra) and judgment of the Constitution Bench above especially on conclusion No. 3 and 6 in para 24 of the Constitution Bench judgment.
15. The entire conclusion in Para 24 of the Constitution Bench judgment is reproduced below:
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(9 of 13) [CRLMP-2589/2022] "24. The upshot of the above discussion leads us to the following conclusions:
1) The High Courts are requested to issue practice directions to the Magistrates to record reasons before converting trial of complaints Under Section 138 of the Act from summary trial to summons trial.
2) Inquiry shall be conducted on receipt of complaints Under Section 138 of the Act to arrive at sufficient grounds to proceed against the Accused, when such Accused resides beyond the territorial jurisdiction of the court.
3) For the conduct of inquiry Under Section 202 of the Code, evidence of witnesses on behalf of the complainant shall be permitted to be taken on affidavit. In suitable cases, the Magistrate can restrict the inquiry to examination of documents without insisting for examination of witnesses.
4) We recommend that suitable amendments be made to the Act for provision of one trial against a person for multiple offences Under Section 138 of the Act committed within a period of 12 months, notwithstanding the restriction in Section 219 of the Code.
5) The High Courts are requested to issue practice directions to the Trial Courts to treat service of summons in one complaint Under Section 138 forming part of a transaction, as deemed service in respect of all the complaints filed before the same court relating to dishonour of cheques issued as part of the said transaction.
6) Judgments of this Court in Adalat Prasad (supra) and Subramanium Sethuraman (supra) have interpreted the law correctly and we reiterate that there is no inherent power of Trial Courts to review or recall the issue of summons. This does not affect the power of the Trial Court Under Section 322 of the Code to revisit the order of issue of process in case it is brought to the court's notice that it lacks jurisdiction to try the complaint.
7) Section 258 of the Code is not applicable to complaints Under Section 138 of the Act and findings to the contrary in Meters and Instruments (supra) do not lay down correct law. To conclusively deal with this aspect, amendment to the Act empowering the Trial Courts to reconsider/recall summons in respect of complaints Under Section 138 shall be considered by the Committee constituted by an order of this Court dated 10.03.2021.(Downloaded on 01/09/2022 at 09:55:43 PM)
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8) All other points, which have been raised by the Amici Curiae in their preliminary report and written submissions and not considered herein, shall be the subject matter of deliberation by the aforementioned Committee. Any other issue relating to expeditious disposal of complaints Under Section 138 of the Act shall also be considered by the Committee."
16. Learned counsel for the respondent submits that the Constitution Bench stated that in suitable cases, the Magistrate can restrict the inquiry to examination of documents without insisting for examination of witnesses.
The impugned order of cognizance is clear that the cognizance taking Court has examined the documents besides considering the affidavit of complainant for coming to the conclusion that a prima facie case under Section 138 of the N.I. Act is made out, for issuance of summons against the accused.
17. This Court is of the view that this one was not a suitable case where cognizance could have been taken only on examination of documents. If the Magistrate would have entered into inquiry under Section 202 Cr.P.C, it could have gathered that on the date of cognizance a complaint for same cause of bouncing of the cheque of the same due amount was pending before the Court at Mumbai. This fact has not been disclosed either in the notice sent to the petitioner on bouncing of the second cheque or in the complaint petition filed at Jaipur. In the event of disclosure of these facts, the Court would have insisted the complainant to go to Mumbai Court under sub-section (2) of Section 142-A of the N.I. Act or the Court at Jaipur could have exercised option vested under sub-section (3) of Section 142-A of the Act for transfer of the complaint case to the Mumbai Court.
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18. The Constitution Bench vide conclusion No. (2) above held that where the accused resides beyond the territorial jurisdiction of the court an inquiry shall be conducted on receipt of complaint under Section 138 of the N.I. Act.
19. Therefore, the impugned order suffers from non-compliance of mandates of law. The learned Magistrate wrongly relied upon the affidavit filed by the complainant along with complaint petition, if the Magistrate would have asked the complainant to file an affidavit in the inquiry under Section 202 Cr.P.C and would have exercised power of putting questions to the complainant or its witnesses, the aforesaid lapses would have surfaced. Therefore, this Court is of the view that this petition is fit to succeed on this ground also that order of cognizance is bad in law for non- compliance of mandates of law regarding the enquiry under Section 202 Cr.P.C. when the accused resides beyond the territorial jurisdiction of the Court.
20. Learned counsel for the respondent contends that vide conclusion No.(6) of the Constitution Bench though the learned trial Judge has no inherent power to recall or review the issuance of summons, however that does not affect the power of the learned trial Judge under Section 322 Cr.P.C. to revisit the order of issuing of process in case it is brought to the court's notice that it lacks jurisdiction to try the complaint. Learned counsel contends that petitioner ought to have appeared before the Court at Jaipur and should have raised the issue that court here has no jurisdiction and therefore, it should transfer the complaint to the court at Mumbai and the Magistrate was competent to decide this question.
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21. Learned Senior Counsel for the petitioner controverts the availability of the aforesaid option under Section 322 Cr.P.C. for the reason that the Jaipur Court issued summons to the petitioners on 22.11.2021 till then complaint at Mumbai was already withdrawn on 1.8.2021 itself by the respondent.
There is substance in the submission of learned Senior counsel for the petitioner for the simple reason that on the date of presentation of the complaint at Jaipur, it was beyond jurisdiction of the Jaipur Court due to the pendency of complaint under Section 138 of the Negotiable Instruments Act against the same drawer of cheque before a Court at Mumbai in view of provisions of Section 142-A (2) of the NI Act. As such the order of cognizance was also without jurisdiction. Rectification of order of cognizance under Section 322 Cr.P.C. was not possible as before issuance of summons to the petitioner who could have raised objection before the Court at Jaipur, the complaint at Mumbai was withdrawn by the respondent on 1.8.2022 itself.
22. This Court does not find any substance in the submission of learned Senior Counsel for the petitioner that since an arbitration proceeding is pending for redressal of same grievance, criminal prosecution would be abuse of the process of law. The issue has already been decided by the Hon'ble Supreme Court in M/s Sri Krishna Agencies v. State of A.P., (SC), reported in AIR 2009 SC 1011, that a complaint under Section 138 of the N.I. Act cannot be quashed on the ground that complainant had already taken recourse to arbitration proceedings.
23. To conclude, this petition is fit to be allowed for the reason that the second presentation of cheque for realization of the same (Downloaded on 01/09/2022 at 09:55:43 PM) (13 of 13) [CRLMP-2589/2022] amount during pendency of a criminal case under Section 138 of the N.I. Act for bouncing of first cheque issued for realization of the same due amount is not permissible. Likewise, the second complaint against the same drawer of cheque was maintainable before the same court where the earlier complaint under Section 138 of NI Act was pending, therefore, the complaint before the Jaipur Court was without jurisdiction. The learned Magistrate did not conduct the inquiry under Section 202 Cr.P.C which was mandatory one in the facts and circumstances of the case as discussed above which vitiates the order of cognizance and issuance of summons as well.
24. In the result, the complaint as well as entire subsequent proceedings arising out of the said complaint stands hereby quashed and this petition is allowed.
(BIRENDRA KUMAR),J BRIJ MOHAN GANDHI /77/104 (Downloaded on 01/09/2022 at 09:55:43 PM) Powered by TCPDF (www.tcpdf.org)