Orissa High Court
Korp Gems (India) Pvt. Limited And Anr. vs Suraj Products Ltd. on 19 June, 2007
Equivalent citations: I(2008)BC497, 2007(II)OLR136, AIR 2007 (NOC) 2275 (ORISSA), AIR 2007 (NOC) 2067 (ORI.), 2007 (6) ALJ (NOC) 998 (ORI.) 2007 (6) AKAR (NOC) 864 (ORI.), 2007 (6) AKAR (NOC) 864 (ORI.), 2007 (6) AKAR (NOC) 864 (ORI.) 2007 (6) ALJ (NOC) 998 (ORI.), 2007 (6) ALJ (NOC) 998 (ORI.)
Author: R.N. Biswal
Bench: R.N. Biswal
JUDGMENT R.N. Biswal, J.
1. The petitioners call in question the order dated 1.12.2006 passed by learned S.D.J.M., Rourkela in I.C.C. No. 448 of 2006 taking cognizance of the offence under Section 138 of the Negotiation Instrument Act (hereinafter referred to as "the N.I. Act") against them. The opp-party-Company filed the aforesaid complaint case against Petitioner No. 1, a Company having their office at Kolkata and the Petitioner No. 2, the Director of the said Company on the allegation that Petitioner No. 1 through Petitioner No. 2 used to purchase iron ore mines from them. On 6.10.2006 Petitioner No. 2 issued cheque No. 883 167 for Rs. 20,00,000/- drawn on Allahabad Bank, Park Street, Kolkata, in favour of opp. party towards payment of outstanding dues. Opp. party-Company through its representative deposited the said cheque on 6.10.2006 in their accounts maintained with HDFC Bank Limited, Kolkata Branch, but the same returned unpaid on 10.10.2006 due to stop payment advice. So the opp. party-Company served a notice through their advocate demanding payment of the cheque amount under Registered Post No. 1753 dated 26.10.2006, the receipt of which was acknowledged by Petitioner No. 2 on 30.6.2006. In spite of receipt of the demand notice, petitioner did not pay the cheque-amount of Rs. 20,00,000/- within the statutory period. Hence, they filed the aforesaid complaint case on the allegation of commission of offence under Section 138 of the N.I. Act. After going through the complaint petition, initial statement of the complainant and the evidence of witnesses recorded under Section 202 of Cr.P.C, the trial Court took cognizance of the offence under Section 138 of the N.I. Act against the petitioners, which is under challenge in the present CRLMC.
2. At the out set, learned Counsel for the petitioners submitted that since no cause of action arose under the territorial jurisdiction of the learned S.D.J.M., Rourkela, he should not have taken cognizance of the offence under Section 138 of the N.I. Act against the petitioners. But, on perusal of the complaint petition, it is found that the opp. party-Company have their registered office in village Barapali in the district of Sundargarh and the City Office at W-7, Civil Township Rourkela-4. The demand notice was also issued from Rourkela. In the decision K. Bhaskaran v. Sankaran Vaidhyan Balan and Anr. the apex Court held as follows:
The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. Following are the acts which are components of the said offence (1) Drawing of the cheque, (2) Presentation of the cheque to the bank, (3) Returning the cheque unpaid by the drawee bank, (4) Giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment with in 15 days of the receipt of the notice.
It is not necessary that all the above five acts should have been perpetrated at the same locality. It is possible that each of those five acts could be done at 5 different localities. But concatenation of all the above five is a sine qua non for the completion of the offence under Section 138 of the Code. In this context a reference to Section 178(d) of the Code is useful. It is extracted below:
Where the offence consists of several acts done in different local areas, it may be inquired into or tried by a Court having jurisdiction over any of such local areas.
Thus it is clear, if the five different acts were done in five different localities anyone of the Courts exercising jurisdiction in one of the five local area can become the place of trial for the offence under Section 138 of the Act. In other words, the complainant can choose anyone of those Courts having jurisdiction over anyone of the local areas within the territorial limits of which anyone of those five acts was done. As the amplitude stands so widened and so expansive it is an idle exercise to raise jurisdictional question regarding the offence under Section 138 of the Act.
3. In the case at hand, since notice was issued demanding payment of the cheque amount from Rourkela and the petitioners failed to make payment within 15 days of receipt of the notice and thereafter till filing of the complaint case, one of the causes of action arose under the jurisdiction of the S.D.J.M. Rourkela and as such he has power to entertain the complaint petition. The decisions in National Textile Corporation Ltd. and Ors. v. Haribox Swalram and Ahuja Nandkishore Dongre v. State of Maharashtra and Anr. 2007 CRI. L. J. 115 as cited by the counsel appearing for the petitioners, are not applicable to the present case.
4. Learned Counsel for the petitioners, next submitted that since there is nothing to show that the petitioners were liable to pay any amount to the opp. party-Company, the offence under Section 138 of the N.I. Act cannot be attracted to either of them. But, as mentioned earlier, it is mentioned in the complaint petition that the cheque was drawn for payment of the outstanding dues of the opp. party-Company. Even if it is assumed that there is no material whatsoever, in the complaint petition to show that the petitioners were liable to pay any amount to the opp. party-Company, still then, in view of Section 139 of the N.I. Act, it would be presumed that Petitioner No. 2 drew the cheque to discharge the liability of both himself and Petitioner No. 1 unless it is disproved at the stage of trial.
5. Learned Counsel for the petitioners further submitted that NOVACORP INTERNATIONAL GROUP LIMITED based at Hong Kong, is a foreign Company which deals in the business of import and export. CARGO LINERS PRIVATE LIMITED, based at Kolkata, is a sister concern of the complainant-opp. party Company. NOVACORP INTERNATIONAL GROUP LIMITED entered into an agreement with the complainant-opp. Party Company on 27.9.2006 for purchase of iron ore fines. As per the contract, the complainant-Company was required to supply iron ore fines having Fe content at 62%. NOVACORP appointed the Petitioner No. 1 as its purchase agent, CARGO LINERS, the sister concern of the complaint-opp. party-Company delivered the iron ore fines to NOVACORP and petitioner-Company made the payment on behalf of the said NOVACORP. As the opp. party-Company committed breach of contract by supplying sub-standard iron ore fines, NOVACORP did not accept the same and the complainant-Company was asked refund the payment.
6. Learned Counsel for the petitioners, further submitted that the entire dispute being civil in nature, the criminal proceeding should be quashed. He further submitted that there was an arbitration clause in the agreement entered into between NOVACORP and CARGO LINERS on 27.9.2006, so the dispute ought to have been referred to the Arbitrator. It is the established principle of law that if the complaint petition, initial statement of the complainant recorded under Section 200 of Cr.P.C. and the evidence, if any, recorded under Section 202 of Cr.P.C. make out any offence, then cognizance can be taken of the said offence. Furthermore, there is no absolute bar for running of criminal proceeding and civil proceeding simultaneously. In the decision Paragon Associates and Anr. v. Pasupati Feeds 2002 (I) OLR 157 : (2002) 22 OCR-165 it has been held that both criminal law and civil law remedy can be pursued in diverse situations. As a matter of fact, they are not mutually exclusive but clearly co extensive and essentially differ in their content and consequence. The Apex Court in the cases of M/s. Medchi Chemicals and Pharma Pvt. Ltd. v. Biological E. Ltd and Ors. reported in A.I.R. 2000 SC 1869 held as follows:
In the instant case the ingredients of the offence under Sections 415, 418 and 420 were not totally absent on the basis of the allegation in the complaint. However, whether or not the allegations in the complaint are otherwise correct has to be decided on the basis of the evidence to be led at the trial in the complaint cause but simply because of the fact that there is a remedy provided for breach of contract, that does not itself clothe the Court to come to a conclusion that civil remedy is the only remedy available to the appellant herein. Both criminal law and civil law remedy can be pursued in diverse situations. As a matter of fact, they are not mutually exclusive but clearly co-extensive and essentially differ in their content and consequence. The object of criminal law is to punish an offender who commits an offence against a person, property or the State for which the accused, on proof of the offence, is deprived of his liberty and in some cases even his life. This does not, however, affect civil remedies at all for suing the wrongdoer in case like arson, accidents etc. It is anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred.
In the matter of exercise of High Court's inherent power, the only requirement is to see whether continuance of the proceeding would be a total abuse of the process of Court. The Criminal Procedure Code contain a detailed procedure for investigation, charge and trial and in the event the High Court is desirous of putting a stop to the known procedure of law, the High Court must use a proper circumspection and, as noticed above, very great care and cautions to quash the complaint in exercise of its inherent jurisdiction.
7. In the instant case it cannot be said that continuance of the criminal proceeding against the petitioners would be abuse of process of the Court with regard to Arbitration clause, it can be said that the said clause is there to refer the matter to the Arbitrator in case of violation of the terms and condition on that agreement. In the present case, cognizance has been taken under Section 138 of the N.I. Act, because the cheque issued was bounced. So, it has no connection with the Arbitration clause.
8. Therefore, I am not inclined to interfere with the order of cognizance taken by the trial Court while exercising the extraordinary 'jurisdiction under Section 482 of Cr.P.C. and accordingly, the CRLMC stands dismissed.