Karnataka High Court
S H Yuvaraj vs K Hemachandra on 2 January, 2018
Author: K.N.Phaneendra
Bench: K. N. Phaneendra
1
IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 2ND DAY OF JANUARY, 2018
BEFORE
THE HON'BLE MR.JUSTICE K. N. PHANEENDRA
CRL.P. NO. 6831/2017
BETWEEN
S. H. YUVARAJ,
S/O HANUMANTHAPPA,
AGED 42 YEARS, PROPRIETOR,
MARUTHI ELECTRICALS,
R/A NO 3733, 6TH CROSS,
M C C 'B' BLOCK , KUVEMPUNAGARA
DAVANAGERE - 577 002 ... PETITIONER
(BY SRI. B. K. MANJUNATH, ADV.)
AND
K. HEMACHANDRA,
S/O LATE KEMPAIAH,
AGED ABOUT 46 YEARS,
R/A 3RD MAIN ROAD,
VALMIKI NAGAR,
POORNA CHANDRA NILAYA,
TUMKUR TOWN, TUMKUR - 572102
... RESPONDENT
(BY SRI. K. R. KRISHNA MURTHY, ADV. FOR
SRI. T. S. AMAR KUMAR, ADV.)
THIS CRL.P IS FILED U/S 482 CR.P.C PRAYING TO
QUASH THE PROCEEDINGS IN C.C.NO.2551/2017 ON
THE FILE OF PRL. CIVIL JUDGE AND J.M.F.C.,
TUMAKURU FILED BY THE RESPONDENT AGAINST THE
PETITIONER U/S 200 OF CR.P.C. R/W 138 AND 139 OF
N.I. ACT
2
THIS CRL.P COMING ON FOR ADMISSION THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
Heard the learned counsel for the petitioner and the learned counsel for the respondent on merits. Perused the records.
2. The petitioner has sought for quashing of the entire proceedings in CC No.2551/2017 on the file of the Principal Civil Judge & JMFC, Tumkur, for the offence punishable under sections 138 and 139 of the Negotiable Instruments Act.
3. The learned counsel for the petitioner contends that the respondent herein has filed a suit in OS No.2331/2017 for recovery of a sum of Rs.1,10,00,000/- (Rupees One Crore Ten lakhs) on various allegations made in the plaint. It is also contended that the respondent herein has also filed a Private Complaint u/s.138 of the Negotiable Instruments Act, in respect of the cheque issued by the petitioner herein for a sum of Rs.30,00,000/- and submits that the entire transaction is purely of civil in nature and 3 therefore, when the suit has already filed for recovery of the entire amount, there cannot be any Criminal Case u/s.138 of the Negotiable Instruments Act.
4. Further, it is the contention of the learned counsel for the petitioner that in order to file a complaint u/s.138 of the Negotiable Instruments Act, the complainant has to tentatively show to the court that the cheque was issued by the accused in respect of repayment of the whole or any part of the debt, otherwise, the complaint itself is not maintainable. He further contends that the defendant in OS No.2331/2017, who is a registered contractor for BESCOM, was said to have been entrusted with a contract work by BESCOM and it is alleged that on receipt of the work order, the petitioner was unable to carry out the same on account of several problems that he has no man power to complete the project, and secondly, the defendant has no financial assistance. Therefore, he has requested the complainant/ respondent to complete the project smoothly and therefore, the work of three districts were entrusted to 4 the complainant/respondent under an oral agreement and understanding between the parties. In that context, it is alleged by the respondent that he has invested huge amount, and as they are very good friends, the defendant allowed the plaintiff to execute the work on behalf of the defendant. It is further submitted that the petitioner in all due in a sum of Rs.1,10,00,000/- and in connection with the same, a cheque have been issued to the respondent. The said allegations made in the plaint have been denied by the defendant categorically. The factual aspects as narrated by the plaintiff reveal that there was an illegal contract between the parties, whether it is oral or written. Therefore, any amount derived from the illegal agreement will not create any right, for claiming the same as if a legally recoverable debt. Therefore, he submits that there is no prima facie legally recoverable debt u/s.138 of the Negotiable Instruments Act.
5. Per contra, the learned counsel for the respondent submitted that in OS No.2331/2017 the petitioner has denied the entire transaction in the 5 written statement. However, handing over of cheque for a sum of Rs.30,00,000/- has been admitted, but according to the petitioner, the said cheque was issued in order to arrange, for making payment of salaries to the workers. Therefore, it clears the doubt that the cheque has been issued by the petitioner herein in favour of the respondent. The purpose for which, the said cheque has been issued is on two different disputed facts. Firstly, according to the respondent, the said cheque was issued in connection with the work done by the respondent for the petitioner in lieu of the contract taken up by the petitioner from the BESCOM. On the other hand, according to the petitioner, the said cheque was issued for the purpose of making payment to the gangman with respect to the same work towards salaries. Therefore, it is a factual dispute between the parties. The court has to ascertain after recording of the evidence whether the contract between the parties is altogether illegal or entrustment of the work create any right in favour of the respondent to receive the said cheque. On the other hand, it also requires evidence to 6 establish by the accused that the said cheque was not issued in lieu of any liability or it was issued in lieu of disbursing salary to the gangman etc., Therefore, when the factual aspects that was involved are in dispute, it may not be proper to intervene at the initial stages to quash the proceedings.
6. The learned counsel for the petitioner has relied upon various rulings in order to draw the attention of this court that if the case is purely civil in nature, then Criminal Case cannot be entertained. He has relied upon the decisions of this court reported in (1) ILR 2007 KAR 3665 between M/s.LMJ International Ltd., reptd. By its Director and others Vs. State of Karnataka and Others; (2) ILR 2006 KAR 3579 between M/s.Sathavahana Ispat Ltd., Vs. Umesh Sharma & Another; and (3) (2014) 12 SCC 539 between Indus Airways Pvt. Ltd., & Others Vs. Magnum Aviation Pvt.Ltd., and another.
7. Of course, there is no bar for this court to quash the proceedings if the court is of the opinion that the court can conclusively draw an inference that the 7 presumption under section 139 of Negotiable Instruments Act has been completely rebutted on the admitted facts, without receiving any proof from the accused. It is the legal aspect that, the presumption drawn in favour of the complainant need not discharge the burden initiating with regard to the existence of debt or liability and that, a cheque has been issued by the accused in favour of the complainant, automatically the presumption u/s.139 of the Negotiable Instruments Act has to be raised in favour of the complainant. The person who denies the same has to rebut the presumption entering into the witness box or by showing the same by the surrounding circumstances before the court to show that the said presumption raised in favour of the complainant has been satisfactorily rebutted. In this context, the material placed before this court to pass an order u/s.482 of Cr.P.C. should be of such sterling quality, between the parties to conclusively draw an inference that presumption u/s.139 of Negotiable Instruments Act is 8 completely rebutted before this court to quash such proceedings u/s.138 of Negotiable Instruments Act.
8. It is worth to note here the decision cited by the learned counsel for the petitioner reported in (2014) 12 SCC 539 in the case of Indus Airways Pvt. Ltd., & Others Vs. Magnum Aviation Private Ltd., & another wherein the appellant purchaser has placed two purchase orders with the respondent supplier by issuing two separate cheques towards advance payment. After some time, deal between the parties got cancelled and lodged complaint u/s.138 of the Negotiable Instruments Act was made by the respondent supplier, the trial court issued summons and it was challenged by the purchaser before the Sessions Court issuance of process was quashed and however the High Court set aside the order passed by the Sessions Court. The Hon'ble Apex Court has observed that the said amount paid towards advance payment when the goods were not supplied clearly discloses that the said amount was in any way can be considered as any debt or liability. Therefore, in that context when the court on 9 the basis of the said factual aspect placed before the court all certainty and conclusively can come to the conclusion that it is not a debt or liability and therefore, Section 138 of the Negotiable Instruments Act is not attracted. In such circumstances, only the court can quash the proceedings. However, the principles of the said case is not applicable to this case, as the facts are in dispute in this case.
10. Now coming to the second point involved in this case that whether the matter is purely civil in nature or whether there is any criminal tinge in this accused persons in a decision reported in (2009) 13 SCC 729 between Vishnu Dutt Sharma Vs. Daya Sapra, wherein the Hon'ble Apex Court has after detail discussing both Civil and Criminal Law has come to the conclusion at paragraph 8, which reads thus:
"There cannot be any doubt or dispute that a creditor can maintain a civil and criminal proceeding at the same time. Both the proceedings, thus, can run parallel. The fact required to be proved for obtaining a decree in the civil suit and a judgment of 10 conviction in the Criminal proceedings may be overlapping but the standard of proof in a criminal case vis-à-vis a civil suit, indisputably is different. Whereas, in a Criminal case the prosecution is bound to prove the commission of the offence on the part of the accused beyond any reasonable doubt, in a civil suit "preponderance of probability" would serve the purpose for obtaining a decree."
More over, if we read the provisions under the Negotiable Instruments Act and Section 139 of the Negotiable Instruments Act it clearly discloses that issuance of the cheque made without making arrangement in the Bank itself is independent Criminal offence with that of the Civil rights arising out of the said cheque. Therefore, the civil liability and the criminal liability will operate in different fields and therefore, the supreme court has observed in the above said matter that the party who has got right to file a suit and also right to file a Criminal Case is entitled to work out his remedies of both the sides. Merely because the respondent is having right to file a suit and in fact he has filed a suit, it does not mean to say that he has no 11 right to file a Criminal Case, the criminal tinge which is involved in this case is evolved under the provisions of the Negotiable Instruments Act, and they are independent and separate as noted above. Under the above said circumstances, I am of the opinion that, the factual aspects which are involved in this particular case where the contract between the parties i.e., oral agreement between the parties is totally illegal or whether in connection with the same, the cheque has been issued for a sum of Rs.30,00,000/- whether such an agreement can be entered into between the parties are all to be considered and discussed only after recording the evidence by the court.
11. Under the above said circumstances, merely because a civil suit is filed pending between the parties it does not mean to say the Criminal Case requires to be quashed. Therefore, I do not find any strong reasons to quash the proceedings and admit this petition. Hence, the Petition deserves to be dismissed.
Accordingly, the Petition is dismissed. 12 It is needless to mention that whatever the observations made by this court above, shall not in any manner consider by the trial Court at the time of disposal of the case on merits. Both the parties are at liberty to raise their grounds before the trial Court and the trial Court has to apply its mind independently to that of this observation made by this court and dispose of the case in accordance with law.
Sd/-
JUDGE PL*