Andhra Pradesh High Court - Amravati
Variegate Projects Pvt Ltd vs The State Of A.P on 15 March, 2023
Author: R. Raghunandan Rao
Bench: R. Raghunandan Rao
HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO CRIMINAL PETITION.Nos.140,167,276 & 3028 of 2018 COMMON ORDER:
The 2nd respondent in all the above Criminal Petitions contends that it had supplied transformers to the M/s. Variegate Projects Private Limited in the year 2007 and had been given two cheques bearing No.057647 for sum of Rs.3,00,00,000/- and cheque bearing No.016551 for another sum of Rs.3,00,00,000/-, both dated 22.05.2017 towards clearing the amounts due to the 2nd respondent amounting to Rs.6,04,23,803/-. Both these cheques were drawn on the State Bank of India, Industrial Finance Branch, Hyderabad. The cheques were presented by the 2nd respondent in Andhra Bank, Proddatur Branch and the same had been returned with the endorsement that they were being dishonoured for lack of funds.
2. The defacto-complainant had then issued notices to M/s. Variegate Projects Private Limited and subsequently, filed C.C.No.631 of 2017 in the Court of II Additional Judicial First Class Magistrate, Proddatur (renumbered as C.C.No.343 of 2020) in relation to the dishonoured cheque bearing 2 RRR,J.
Crl.P.Nos.140 of 2018 & Batch No.057647 and C.C.No.632 of 2017 (renumbered as C.C.No.344 of 2020) before the same Court in relation to the dishonoured cheque bearing No.016551. The complaints were filed against the company as 1st accused and the Managing Director and another Director of the company as accused Nos.2 & 3.
3. The following Criminal Petitions have been filed seeking quashing of these two complaints in the following manner:-
Sl. Criminal Petitioner C.C. No.
No. Petition
Number
1. 140 of 2018 Company represented by its 631 of 2017
Director, G. Ravindranath
Reddy. (Accused No.3) [343 of 2020]
2. 276 of 2018 Company represented by its 632 of 2017
Director, G. Ravindranath
Reddy. (Accused No.3) [344 of 2020]
3. 3028 of Company represented by its 632 of 2017
2018 Director, G. Ravindranath
Reddy. (Accused No.3) [344 of 2020]
4. 167 of 2018 Company represented by its 631 of 2017
Managing Director, G.L. Siva
Reddy. [343 of 2020]
Company represented by its
Managing Director, G.L. Siva
Reddy.(Accused Nos.1 & 2)
3 RRR,J.
Crl.P.Nos.140 of 2018 & Batch
4. As Criminal Petition No.276 of 2018 and Criminal Petition No.3028 of 2018 have been filed by the same accused for quashing C.C.No.632 of 2017 (renumbered as C.C.No.344 of 2020), one of the petitions would have to be treated as infructuous petition. Accordingly, Criminal Petition No.3028 of 2018 is dismissed as infructuous.
5. Sri Venkat Reddy Donthi Reddy, Learned Senior Counsel appearing for the petitioners in the above Criminal Petitions assails the complaints filed against the petitioners on the following grounds:-
1. The 1st accused has been described as "Company represented by its Managing Director". The accused No.2 has been described as the Company again represented by Sri G.L. Siva Reddy as Managing Director of the company and the 3rd accused has been described as the company represented by Sri G. Ravindranath Reddy as its Director. He would further submit that in such circumstances neither Sri G. Ravindranath Reddy and nor G.L. Siva Reddy can be treated, personally, as accused in the cases.
2. The contents of the complaint do not make out any case against either Sri G. Ravindranath Reddy or Sri G.L. Siva Reddy as there are no allegations against either of them and consequently, they cannot be treated as accused in the 4 RRR,J.
Crl.P.Nos.140 of 2018 & Batch complaint and the said complaint would have to be quashed against them.
3. There is no legal subsisting debt as the debt is said to be of the year 2007 and the cheques are said to have been issued in the year 2017 which is beyond the period of limitation of three years from 2007.
4. The cheques were issued only for the security in the year 2007 and have been misused by the 2nd respondent in these petitions and as such the said cheques cannot be treated as cheques given for clearing a legally enforceable debt.
5. The 2nd respondent is an unregistered firm which cannot legally recover any debt and accordingly the complaints under Section 138 of the Negotiable Instruments Act, 1881 are not maintainable.
6. The cheques issued by the petitioners relate to the year 2007 and the same are not valid cheques as the guidelines of the Reserve Bank of India issued in the year 2013 clearly invalidate all cheques printed prior to the year 2010.
7. The statement of the bank account of the company for the years 2007 to 2017 would show that all the cheques from the cheque book relating to the two cheques presented by the 2nd respondent, have been exhausted between the years 2007 to 2010 itself and the same would be 5 RRR,J.
Crl.P.Nos.140 of 2018 & Batch sufficient to demonstrate that the cheques were not issued by the petitioners in the year 2017.
6. Sri C. Sunil Kumar Reddy, learned counsel appearing for the 2nd respondent/defacto-complaint would submit that the cheques have been issued in discharge of legally enforceable debt against the petitioners and as such the objections raised are not maintainable. He would further submit that in any event these are issues of fact which cannot be determined by this Court in proceedings under Section 482 of Cr.P.C.
CONSIDERATION OF THE COURT:-
7. The 2nd accused has not chosen to challenge the proceedings in C.C.No.632 of 2017 (C.C.No.344 of 2020). However, the proceedings in C.C.No.631 of 2017 (C.C.No.343 of 2020) were challenged by the accused Nos.2 & 3 also. A perusal of the complaint in C.C.No.631 of 2017 (C.C.No.343 of 2020) would show that the accused Nos.2 & 3 had not been described as individuals, but as the company represented by the Managing Director (Accused No.2) and its Director (Accused No.3). In such circumstances, it cannot be held that the complaint was filed against these two persons 6 RRR,J.
Crl.P.Nos.140 of 2018 & Batch individually. Consequently, to that extent it must be held that C.C.No.631 of 2017 (C.C.No.343 of 2020) has not been filed against these two persons and the same has to be quashed against the accused Nos.2 & 3. As far as C.C.No.632 of 2017 (C.C.No.344 of 2020) is concerned the same principle would apply and the complaint would have to be treated as quashed against the 3rd accused only.
8. The learned Senior Counsel appearing for the petitioners submitted that the cheques, in question, had been issued in the year 2007 as security and had subsequently been misused by the 2nd respondent to pressurize the petitioners to agree the demands of the 2nd respondent. This contention is sought to be demonstrated by relying on two situations:
i) The cheques bearing Nos. 057647 & 016551 before and after the two cheques in question had been utilised and cleared in the years 2007 to 2010 and consequently, the cheques cannot be treated as having been issued in the year 2017. Further, the averments in the complaint are that the supplies had been completed in the year 2007 itself and which would imply that the cheques were 7 RRR,J.
Crl.P.Nos.140 of 2018 & Batch also issued in the year 2007 itself. These are contentions which require adjudication before any decision taken in the matter.
ii) A new system of printing cheques had been introduced by the Reserve Bank of India in the year 2010 and the circulars issued by the Reserve Bank of India bearing DNBS.PD/CC.No.359/03.10.001/2013-14, dated 06.11.2013 clearly indicated that all cheques printed prior to the 2010 are invalid and the question of the petitioners issuing an invalid cheque of the year 2007 in the year 2017 would not arise and it would be obvious that the cheques were obtained by the 2nd respondent in the year 2007 itself.
9. The question of whether the cheque had been handed over to the 2nd respondent in the year 2007 or in the year 2017 is a question of fact and this Court cannot, on the probabilities of a case, decide questions of fact in a petition under Section 482 of Cr.P.C.
10. A perusal of the circular dated 06.11.2013 would make it clearly that the Reserve Bank of India had only indicated that the cheques printed prior to the 2010 would be 8 RRR,J.
Crl.P.Nos.140 of 2018 & Batch cleared in the clearance system less frequently and as such the time taken for clearing these cheques would be longer. By implication, the Reserve Bank of India has observed that the said cheques printed before 2010 continued to be valid. For both these reasons, the contentions raised by the learned Senior Counsel would be to be rejected.
11. The learned Senior Counsel also contended that the 2nd respondent is an unregistered firm and in view of Section 69 of the Indian Partnership Act, 1932, the said debt is not legally recoverable. A perusal of the Section 69 of the Indian Partnership Act, 1932 would make it clear that all debts of an un-registered firm are not debts which are legally unenforceable. The only stipulation under Section 69 of the Indian Partnership Act, 1932 is that an un-registered firm cannot seek to recover the debts, under the legal process, unless it has registered itself prior to the filing of the suit for recovery. In such circumstances, it cannot be said that an un-registered firm cannot be initiate action under Section 138 r/w. 141 of the Negotiable Instruments Act, 1881. The very same issue had come up before this Court in Criminal Petition No.12454 of 2017 & Batch wherein this Court had 9 RRR,J.
Crl.P.Nos.140 of 2018 & Batch held that an un-registered firm can also maintain a complaint under Section 138 of the Negotiable Instruments Act, 1881. In that view of the matter also, the contention that an un- registered firm cannot be maintain a complaint under Section 138 of the Negotiable Instruments Act, 1881 would have to be rejected.
12. For all the aforesaid reasons, these Petitions are disposed of with the following directions:-
1. Criminal Petition No.167 of 2018 is partly allowed, quashing the complaint in C.C.No.343 of 2020 in the Court of II Additional Judicial First Class Magistrate, Proddatur (old C.C.No.631 of 2017 in the Court of I Additional Judicial First Class Magistrate, Proddatur) against the 2nd accused only.
2. Criminal Petition No.276 of 2018 is allowed, quashing C.C.344 of 2020 in the Court of II Additional Judicial First Class Magistrate, Proddatur (old C.C.No.632 of 2017 in the Court of I Additional Judicial First Class Magistrate, Proddatur) against the 3rd accused.
3. Criminal Petition No.3028 of 2018 is dismissed as infructuous.
4. Criminal Petition No.140 of 2018 is allowed, quashing C.C.No.343 of 2020 in the Court of II Additional Judicial First Class Magistrate, Proddatur (old 10 RRR,J.
Crl.P.Nos.140 of 2018 & Batch C.C.No.631 of 2017 in the Court of I Additional Judicial First Class Magistrate, Proddatur) against the 3rd accused.
As a sequel, pending miscellaneous petitions, if any, shall stand closed.
____________________________ R. RAGHUNANDAN RAO, J 15.03.2023.
BSM 11 RRR,J.
Crl.P.Nos.140 of 2018 & Batch HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO Criminal Petition Nos.140,167,276 & 3028 of 2018 15.03.2023 BSM