Gujarat High Court
Chetanbhai Vasantbhai Mistary vs State Of Gujarat on 25 November, 2003
Equivalent citations: II(2005)BC59
Author: D.H. Waghela
Bench: D.H. Waghela
JUDGMENT D.H. Waghela, J.
1. RULE. The learned counsel for the respondents waived service of Rule and, on joint request, the application was taken up for final disposal.
2. By this revision application, the petitioner has challenged the judgment and order dated 10.6.2003 of the learned Additional Sessions Judge, Fast Track Court No.3, Vadodara, made in Criminal Revision Application No.109 of 2003, whereby the revision application of the respondent No.2 was allowed and the order dated 17.2.2003 of the learned Chief Judicial Magistrate in Muddamal Application No.47 of 2003 was quashed and the matter was remanded for re-hearing. The order under revision before the learned Additional Sessions Judge had, in substance, directed delivery of the muddamal cheque to the present petitioner for the purpose of presentation in bank. The muddamal articles about which the controversy has reached this Court are a number of cheques recovered pursuant to the complaint dated 4.2.2003 of the respondent No.2 which was registered in DCB Police Station, Vadodara as No.I-8 of 2003.
3. The peculiar facts of the case are such that, according to the petitioner, the accused in the aforesaid complaint, a sum of Rs.9,80,000/- was advanced to the respondent No.2, the complainant, in consideration whereof the respondent No.2 had given 48 cheques of Rs.20,000/- each and the respondent had also executed a notarised letter of undertaking dated 30.8.2002 assuring the petitioner that he may recover the amount due by encashing one of those cheques every month. This simple-looking monetary transaction of loan and recovery thereof by 48 post-dated cheques ran into complications when the petitioner started presenting such cheques and they started bouncing with the memos of the bank stating "Returned unpaid for reason-funds insuffcient". It is the case of the petitioner that the petitioner issued notice dated 1.2.2003 regarding return of the cheques and the respondent filed the aforesaid complaint dated 4.2.2003 alleging, in substance, that the initial debt of Rs.10,000/- against the respondent was inflated into such a huge figure since the petitioner could not repay the instalments and usurious interest in time and that the cheques and the aforesaid undertaking were obtained under coercion and threats. It must be noted here that the undertaking evidencing delivery of 48 cheques and admittedly signed by the respondent appears to have been executed on 30.8.2002 whereas the aforesaid complaint was filed on 4.2.2003 stating the date and time of offence to be "Since February, 2002 till today". It is stated by the respondent in his reply-affidavit that the petitioner was arrested on 4.2.2003 itself and he was released on bail on 15.2.2003 while, during the course of investigation, the muddamal cheques in question appeared to have been recovered by the investigating officer. Immediately on 17.2.2003, the petitioner filed Muddamal Application No.47 of 2003 in which the order to return the cheques for presentation was made, after hearing the parties, on 16.4.2003 by the learned Judicial Magistrate. It is the order reversing that order of the learned Judicial Magistrate, First Class and remanding the matter for re-hearing which is under challenge in this revision application.
4. It was submitted on behalf of the petitioner by his learned counsel M. Hasurkar that the petitioner was the holder in due course of the inchoate negotiable instruments and he was not only entitled to the custody of the muddamal but was required to present those cheques for realization. He submitted that the complaint lodged by the respondent was false, mala fide and obviously calculated to stave off the liability to repay and the prospect of facing one after the other complaint of the offence under section 138 of the Negotiable Instruments Act, 1881 (for short 'the NI Act'). He further submitted that in a way the cheques were perishable articles insofar as if they were not presented for realization within time, the right of the petitioner to encash them would stand extinguished. As against that, the arguments of Mr. Ramnandan Singh learned counsel for the respondent, were that the muddamal cheques were articles in respect of which serious offences punishable under sections 384, 385, 386 and 506(2) of the Indian Penal Code were committed and were important pieces of evidence which cannot be allowed to be tampered or given to the accused person against whom, by now, chargesheet was also filed. He, therefore, supported the impugned order and submitted that if any modifications or special directions were required, they can now be issued by the learned Judicial Magistrate, First Class after hearing the parties upon remand of the matter by the impugned order.
5. It is clear from the record that there has been some monetary transactions between the contesting parties and that the cheques and the undertaking executed in presence of a Notary have been delivered to and found from the possession of the petitioner. The alleged offences involving these cheques are yet to be proved in any court of law. There is a legal presumption under section 139 of the NI Act that, unless the contrary is proved, the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. Under the provisions of section 46 of the NI Act, the making, acceptance or indorsement of a promissory note, bill of exchange or cheque is completed by delivery, actual or constructive. Under section 72 of the NI Act, subject to the provisions of section 84, a cheque must, in order to charge the drawer, be presented at the bank upon which it is drawn before the relation between the drawer and the bank has been altered to the prejudice of the drawer. Under section 78 of the NI Act, subject to the provisions of section 82, clause (c), payment of the amount due on a cheque must, in order to discharge the maker or acceptor, be made to the holder of the instrument. Under the provisions of section 118 of the NI Act, until the contrary is proved, presumptions shall have to be made that every negotiable instrument was made or drawn for consideration and that the holder of the negotiable instrument is a holder in due course; provided that where the instrument has been obtained from its lawful owner or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
5.1 Section 58 of the NI Act also provides that when a negotiable instrument has been lost, or has been obtained from any maker, acceptor or holder thereof by means of an offence of fraud, or for an unlawful consideration, no possessor or indorsee who claims through the person who found or so obtained the instrument is entitled to receive the amount due thereon from such maker, acceptor of holder, or from any party prior to such holder, unless such possessor or indorsee is, or some person through whom he claims was, a holder thereof in due course. And, section 43 of the NI Act provides that a negotiable instrument made, drawn, accepted, indorsed, or transferred without consideration, or for a consideration which fails, shall create no obligation of payment between the parties to the transaction.
5.2 Against the above backdrop of facts and legal position, the application which came to be decided by the Criminal Court is admittedly under section 457 of the Code of Criminal Procedure, which reads as under:-
"Procedure by police upon seizure of property.
S. 457(1): Whenever the seizure of property by any Police Officer is reported to a Magistrate under the provisions of this Code, and such property is not produced before a Criminal Court during an inquiry or trial, the Magistrate may make such order as he thinks fit respecting the disposal of such property or the delivery of such property to the person entitled to the possession thereof, or if such person cannot be ascertained, respecting the custody and production of such property.
(2) If the person so entitled is known, the Magistrate may order the property to be delivered to him on such conditions (if any) as the Magistrate thinks fit and if such person is unknown, the Magistrate may detain it and shall, in such case, issue a proclamation specifying the articles of which such property consists, and requiring any person who may have a claim thereto, to appear before him and establish his claim within six months from the date of such proclamation."
5.3 After production of any property before any Criminal Court during any inquiry or trial, the provisions of section 451 of the Cr.P.C. would apply and they read as under:
Order for custody and disposal of property pending trial in certain cases.
S. 451 :When any property is produced before any Criminal Court during any inquiry or trial, the Court may make such order as it thinks fit for the proper custody of such property pending the conclusion of the inquiry or trial, and, if the property is subject to speedy and natural decay, or if it is otherwise expedient so to do, the Court may, after recording such evidence as it thinks necessary, order it to be sold or otherwise disposed of.
Explanation: For the purposes of this section, "property" includes-
(a) property of any kind or document which is produced before the Court or which is in its custody.
(b) any property regarding which an offence appears to have been committed or which appears to have been used for the commission of any offence."
5.4 It is obvious from the above legal scheme of the Code of Criminal Procedure that, in the matter of disposal of property, the Criminal Court is invested with wide discretion and the guiding principle is that the property should be delivered to the person who is entitled to the possession thereof and, if such person cannot be ascertained, the Court has to make appropriate order in respect of the custody and disposal of such property. The Code of Criminal Procedure, 1973 being the law relating to criminal procedure, it can be presumed to be primarily concerned with fair trial of the criminal case before it and other matters incidental thereto and cannot be presumed to invest the Court with the power of deciding issues of title to the property regarding which an offence appeared to have been committed, or which appeared to have been used for the commission of any offence. The task of exercising the discretion by the Criminal Court in such circumstances is easier at the end of the trial. But pending trial it can be hazardous to decide the issue of entitlement. The emphasis has, therefore, to be laid on the phrase: "entitled to the possession thereof". Therefore, the related question that can be addressed at the pre-trial stage should be restricted to entitlement to the possession of the property and possible consequences of handing over the possession to a party who appears to be entitled to it can be taken care of by imposing suitable conditions. If the question of title remains in controversy even at the end of trial, the course adopted by the Andhra Pradesh High Court in RAJALINGAM v. VANGALA VENKATA RAMA CHARY [ 1977 Cri.L.J. 575] relying upon MUTHIAH MUTHIRIAN v. VAIRAPERUMAL MUTHIRIAN [ AIR 1954 Madras 214], may be the proper course, viz. to direct the parties to establish their claim over the properties before the Civil Court. However, in case of custody of documents like cheques, it can be disposed like the property subject to speedy and natural decay since cheques may lose their efficacy after the stipulated time and, whether the offences alleged to have been committed in respect thereof are proved or not, they might turn into pieces of paper worth nothing. Therefore, the question of custody of such cheques cannot be put off till the end of trial.
6. In the facts of the present case, there is no dispute that the cheques were delivered by the respondent to the petitioner, though under the alleged pressure or coercion, and they were held by the respondent at the time of recovery, during the course of investigation, as muddamal articles. The purpose of their being pieces of evidence during the trial can be served by retaining copies thereof and making proper panchnama, but their retention with the court can put the petitioner to undue hardships if he is exonerated at the end of the trial. On the other hand, if such cheques are presented for encashment and are not realized and criminal case in that regard come to be filed, the presumptions and defences as discussed hereinabove would be available to the parties and, therefore, it cannot be said that a particular party would be prejudiced by presentation of the cheques. There cannot be a presumption of guilt against the petitioner and by mere filing of chargesheet against him, he cannot be visited with the consequence of losing the valuable security which he could as well have rightfully held. In such circumstances, apprehension of proliferation of proceedings on account of the remaining 44 cheques being presented, dishonoured and complaints being filed, cannot be allowed to outweigh the consideration of fair trial for both the parties. Therefore, the order of the learned Judicial Magistrate, First Class, in light of this discussion, appears to be just and proper in the facts and circumstances of the case. The learned Additional Sessions Judge ought not to have interfered with the same in revision by raising the issues which could not have been decided in a Criminal Court in an application for possession of property. Further analysis of the prima facie case of the parties as regards the alleged offences, in the facts and circumstances, is neither necessary nor advisable.
7. In view of the above discussion and facts, the judgments relied upon for the respondent, viz. B. LALITHCHAND NAHAR v. STATE [ 1991 Cri.L.J. 1111], GADADHAR BALIARSINGH v. SRINIVAS MISRA [ 1990 Cri.L.J. 1190], THAKKAR MAHENDRAPRASAD BAPALAL v. STATE OF GUJARAT [ 1985 G.L.H. 61 ] and the judgment of the Supreme Court in SUNDERBHAI AMBALAL DESAI v. STATE OF GUJARAT [ 2003 (2) G.L.R. 1337 ], are not applicable in the facts of the present case since each of those judgments is distinguishable on important facts. The observations in the impugned judgment of the learned Additional Sessions Judge, in justification of the order of remand, are vexatious insofar as they raise issues such as, whose name should be filled up as the payee in the cheques in question and whether the learned Chief Judicial Magistrate had power to allow writing of the petitioner's name in the cheques. If at all such questions were arising and were required to be answered, the learned Additional Sessions Judge ought to have decided them. In any case, the original order of the learned Chief Judicial Magistrate ordering delivery of the cheques to the petitioner, subject to conditions mentioned therein, being legal and proper and there having been no illegality in the making of that order, the impugned order made in revision is required to be quashed and accordingly, it is hereby set aside. This Revision Application is accordingly allowed and Rule is made absolute with no order as to costs.
8. The learned counsel Mr.Singh, appearing for the respondent No.2, has requested that if the application was being allowed, the operation of the order may be stayed for a period of two weeks to allow sufficient time for approaching the higher forum. In the facts and circumstances, the prayer is granted and accordingly the aforesaid order shall not come into operation till 09.12.2003.