Calcutta High Court (Appellete Side)
5. Venkat Vara Prasad Pidikiti vs The State Of West Bengal on 1 December, 2017
Author: Debi Prosad Dey
Bench: Debi Prosad Dey
IN THE HIGH COURT AT CALCUTTA
Criminal Revisional Jurisdiction
Appellate Side
Present:
The Hon'ble Justice Debi Prosad Dey
CRR No.2681 of 2016
With
CRR No.2682 of 2016
With
CRR No.2685 of 2016
1. M/s. DCS Limited & Ors
2. Raghu Prasad Pidikiti
3. Hari Prasad Pidikiti
4. Satya Prasad Pidikiti
5. Venkat Vara Prasad Pidikiti ......................Petitioners
Versus
1. The State of West Bengal
2. M/s. JMS Mining Services Pvt. Ltd. ..........Respondents
For the Appellant/ : Mr. Tirthankar Ghosh
Petitioner : Mr. Satadru Lahiri
: Mr. Dipendra nath Chunder
For the Opposite
Party No.2 : Mr. Sandipan Ganguly
: Mr. Ayan Bhattacharya
Heard on : 16.06.2017, 23.06.2017, 26.07.2017
Judgment on : 01.12.2017
Debi Prosad Dey, J. :-
This application under Section 482 of the Code of Criminal Procedure has been filed for quashing of the proceeding being complaint case no. CS/63257 of 2016 under Section 138/141 of the Negotiable Instrument Act, 1881 as well as of orders passed in connection with said proceeding pending in the Court of learned 29th Metropolitan Magistrate Court, Calcutta. Be it mentioned here that CRR No.2682 of 2016 and CRR No. 2685 of 2016 have been filed by the self-same petitioners for quashing the complaint case no. CS/63261/16 and CS/63260/16. The parties in all the three CRRs are same and almost same argument has been advanced by learned Advocates for both the parties and that is why all the matters have taken up together for disposal.
The factual matrix of the case under reference may be stated herein below:-
On the basis of a petition of complaint filed by one M/s. JMS Mining Services Private Limited, formerly known as M/s. JMS Mining Services Private Limited having its office in 27, Shakespeare Sarani, Kolkata -700017 represented by its authorized representative Shri Ganesh Gupta (herein after referred to as complainant/opposite party) the complaint case no. CS/63257/16 initiated against the present petitioners for commission of alleged offences punishable under Section 138/141 of the Negotiable Instrument Act, 1881. Learned Magistrate took cognizance of the said petition of complaint and after examination of the authorized representative under Section 200 of the Code of Criminal Procedure issued summons against the present petitioners for answering charges under Section 138 and 141 of the Negotiable Instrument Act, 1881.
Being aggrieved by and dissatisfied with such order of learned Magistrate this application under Section 482 of the Code of Criminal procedure has been filed for quashing the entire proceedings. The specific case of the petitioners in brief is that the cheques in questions were handed over as security deposit to the complainant/opposite party and the said fact has been accepted by the complaint/opposite party in their various pleadings filed before this Hon'ble Court.
The Madhya Pradesh state mining corporation limited (MPSMCL) was allocated the Bicharpur Coal Block through a letter of allocation bearing no. F. No. 13016/8/2007-CA-I dated 25.07.2007. Thereafter MPSMCL entered into a joint venture agreement with ACC Mineral Resources Limited (AMRL) on 20th June, 2009 and created a joint venture company in the name of MPAMRL (Bichar) coal company limited where AMRL was to be the mine developer cum operator for the coal block and could appoint a subcontractor for carrying out the activities related to the development and operation of the Bicharpur Mine and extraction of the coal therefrom. Accordingly for carrying out the said activities, the contract was entered into between AMRL and JMS (complainant/opposite party herein). The complainant/opposite party further entered into contract with the Accused/petitioner no.1 and gave work orders dated 05.09.2013 for carrying out the work related to the development of the aforesaid coal block.
The further case of the petitioner is that the accused/petitioners submitted bank guarantees and undated cheques to the complainant/opposite party as security. In the meantime, the Hon'ble Supreme Court has ordered the cancellation of coal blocks (other than four) allocated between 1993 to 2010 including the Bicharpur Coal Block of MPSMCL. The complainant/opposite party thereafter invoked the bank guarantee and also filed criminal cases against the present petitioners with the help of that undated cheques issued by the present petitioners in favour of the complainant/opposite parties as security. The attention of the Court has been drawn in respect of clause 10 of the agreement, containing the terms and conditions by and between the parties. Clause 10 may be reproduced below.
"DCS will submit Performance Bank Guarantee from a scheduled bank at
2.5% (two & half) of Contract Value as against total of 10% (ten) and agree to convert mobilization advance BG to performance BG as and when the recovery is made till the performance BG value reaches up to 10% value of the contract. Till then balance performance security will be confirmed by an equal value of cheque with an undertaking that JMS shall have the liberty to take legal action against DCS u/s 138 of the Negotiable Instruments Act 1881 or any other act or law in the event of any default or non-performance on the part of DCS in honoring the said cheque. The said security cheque will be returned to DCS once the performance BG value reaches 10% (ten) Value of contract. 50% of the performance guarantees will be released after three months of completion of job and rest after defect liability period."
Learned Advocate appearing on behalf of the petitioner contended by referring a decision reported in (2014)12 SCC 539 (Indus Airways Private Limited & Ors. Vs. magnum Aviation Private Limited & Anr.) that since the cheques were issued as security deposit, and there was no existence of legally enforceable debt for other liability, learned trial Court erroneously took cognizance of the offence under Section 138/141 of the Negotiable Instrument Act, 1881 and accordingly in terms of the decision mentioned herein above, the case under reference ought to be quashed. Learned Advocate appearing on behalf of the petitioner further contended by referring writ petition(Civil) no. 463 of 2012 (Manohar Lal Sharma Vs. The Principle Secretary & Ors.) that the petitioner could not complete the work since the Hon'ble Supreme Court had cancelled the allotment of coal blocks. It is further submitted that 10 percent of bank guarantee has already been invoked by the opposite party/ complainant and they have admitted in very many applications before the Hon'ble Court that such cheques were issued towards security deposit and accordingly the application under Section 138/141 of the Negotiable Instrument Act ought to be quashed. It is also submitted by referring the memo of appeal filed by the accused petitioners that all the cheques were undated and such undated cheques would simply prove that the cheques were issued as security. Learned Advocate appearing on behalf of the petitioner has drawn the attention of the Court with regard to the memo of appeal, terms of contract and agreement annexed with the application.
The following decisions have been referred by learned Advocate for the petitioner in support of his aforesaid contentions:-
1. (2007) 14 SCC 776 (All Cargo Movers (India) Private Limited & Ors. Vs. Dhanesh Badarmal Jain & Anr.)
2. (2004) 7 SCC 338 (Adalat Prasad Vs. Rooplal Jindal & Ors.)
3. (2016) 1 SCC 348 (International Advanced Research Centre for Powder Metallurgy & New Materials (Arci) & Ors. Vs. Nimra Cerglass Technics Private Limited & Anr.)
4. (2013)1 SCC 400 (Anup Sarmah Vs. Bhola Nath Sharma & Ors.)
5. (2007) 13 SCC 107 (B. Suresh Yadav Vs. Sharifa Bee & Anr.)
6. (2004) 13 SCC 324 (Subramanium Sethuraman Vs. State of Maharashtra & Anr.)
7. (1998) 5 SCC 749 (Pepsi Foods Ltd. & Anr. Vs. Special Judicial Magistrate & Ors.) Learned Advocate appearing on behalf of the opposite party has however refuted the argument advanced by learned Advocate for the petitioner on the ground that in terms of Section 139 of the Negotiable Instrument Act there shall be necessary presumption of existing liability at the outset and the petitioner is at liberty to refute the said presumption only at the time of trial. In other words, Section 139 of the Negotiable Instrument Act primafacie enables the Court to draw a presumption against the cheque issuing authority that such cheque was issued against existing liability/debt. Secondly, all such factual aspects as has been argued by learned Advocate of the petitioner, cannot be looked into and cannot be decided in a proceeding under Section 482 of the Code of Criminal Procedure. Thirdly, learned magistrate after being satisfied about the existing liability in respect of the cheques issued by the present petitioners, had issued summons against the present petitioners and such satisfaction of the learned Magistrate cannot be challenged in a proceeding under Section 482 of the Code of Criminal Procedure. It is further submitted that all the decisions referred to herein above relate to the case under Section 420 of the Indian Penal Code and said cases do not have any bearing in the context of the given facts and circumstances. Moreover in a decision reported in 2016 (9) Scale (Sampelly Satyanarayana Rao Vs. Indian Renewable Energy Development Agency Limited) the Hon'ble Apex Court has distinguished and overruled the decision reported in (2014)12 SCC 539 (Indus Airways Private Limited & Ors. Vs. Magnum Aviation Private Limited and Another)(Supra). Learned Advocate for the opposite party has also relied on a decision reported in (2002) 1 SCC 234 (M.M.T.C. Ltd. and Anr. Vs. Medchl Chemicals & Pharma (P) Ltd. & Anr. ) wherein it has been observed that the only eligibility criterion prescribed by Section 142 for maintaining the complaint under Section 138 is that the complaint must be by the payee or the holder in due course. The criterion is satisfied as the complaint is in the name and on behalf of the opposite party company. It has been held by Hon'ble Supreme Court as follows:-
"The law is well settled that the power of quashing criminal proceedings should be exercised very stringently and with circumspection. It is settled law that at this stage the Court is not justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the complaint. The inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice. At this stage the Court could not have gone into merits and/or come to a conclusion that there was no existing debt or liability.
There is no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they had to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability.
Even when the cheque is dishonoured by reason of stop- payment instructions, by virtue of Section 139 the court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. If the accused shows that in his account there were sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop-payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then offence under Section 138 would not be made out. Thus, High Court cannot quash a complaint on this ground."
Learned Advocate for the opposite party has also relied on a decision reported in (1976)3 SCC 736 (Smt. Nagawwa Vs. Veeranna Shivalingappa Konjalgi & Ors.) in support of his contention that the satisfaction arrived at by learned magistrate at the time of issuance of summons should not be subjected to scrutiny by the High Court either in revision or in proceeding under Section 482 of the Code of Criminal Procedure.
On careful scrutiny of the materials on record it transpires that an agreement was executed by and between the parties and the petitioners executed bank guarantee and also handed over some cheques in favour of the complainant/opposite party. Clause 10 clearly reveals that the parties had agreed that the complainant/opposite party shall have the liberty to take legal actions against the present petitioner under Section 138 of the Negotiable Instrument Act, 1881 or any other Act or law in the event of any default or non-performance on the part of the petitioners in honouring the said cheque. It is therefore apparent from the said clause that authority was given to the complainant/opposite parties to take appropriate action under Negotiable Instrument Act and the present petitioners also agreed to that effect.
It is next to impossible on the part of this Court in exercise of the jurisdiction under Section 482 of the Code of Criminal Procedure to meticulously examine the entire factual aspect as has been advanced by the petitioners and thereafter come to a logical conclusion with regard to the claim of the present petitioners that such cheques were issued as security deposit and there was no such existing liability on the part of the petitioners to honour the said cheques. It is well settled principle of law that while exercising jurisdiction under Section 482 of the Code of Criminal Procedure, the Courts should not indulge in meticulous examination of the factual aspect thereby usurping the jurisdiction of the learned Magistrate to decide the actual state of affairs. In that view of this case simply on the basis of the fact that such cheques were undated, it cannot be said that the said cheques were issued as security and without having any existing debt or liability. Hon'ble Supreme Court in the decision reported in (2016) 9 Scale (Sampelly Satyanarayana Rao Vs. Indian Renewable Energy Development Agency Limited) has distinguished the decision reported in (2014) 12 SCC 539 (Supra) holding inter-alia that dishonor of cheque issued in discharge of later liability is clearly covered by the statute in question. It has been observed by the Hon'ble Supreme Court relying on HMT Watches Ltd. Vs. M. A. Abida & Anr. reported in (2015) 11 SCC 776 as follows:
"In HMT Watches Ltd. Vs. M.A. Abida and another, relied upon on behalf of the respondent, this Court dealt with the contention that the proceedings under Section 138 were liable to be quashed as the cheques were given as 'security' as per defence of the accused. Negativing the contention, this Court held:-
Having heard the learned counsel for the parties, we are of the view that the accused (Respondent 1) challenged the proceedings of criminal complaint cases before the High Court, taking factual defences. Whether the cheques were given as security or not, or whether there was outstanding liability or not is a question of fact which could have been determined only by the trial court after recording evidence of the parties. In our opinion, the High Court should not have expressed its view on the disputed questions of fact in a petition under Section 482 of the Code of Criminal Procedure, to come to a conclusion that the offence is not made out. The High Court has erred in law in going into the factual aspects of the matter which were not admitted between the parties. The High Court further erred in observing that Section 138(b) of the NI Act stood uncomplied with, even though Respondent 1 (accused) had admitted that he replied to the notice issued by the complainant. Also, the fact, as to whether the signatory of demand notice was authorized by the complainant company or not, could not have been examined by the High Court in its jurisdiction under Section 482 of the Code of Criminal Procedure when such plea was controverted by the complainant before it.
In Suryalakshmi Cotton Mills Ltd. Vs. Rajvir Industries Ltd. (2008) 13 SCC 678, this Court has made the following observations explaining the parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure: (SCC pp. 685-87, paras 17 & 22) The parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure is now well settled. Although it is of wide amplitude, a great deal of caution is also required in application of the well-known legal principles involved in the matter.
Ordinarily, a defence of an accused although appears to be plausible should not be taken into consideration for exercise of the said jurisdiction. Yet again, the High Court at that stage would not ordinarily enter into a disputed question of fact. It, however, does not mean that documents of unimpeachable character should not be taken into consideration at any cost for the purpose of finding out as to whether continuance of the criminal proceedings would amount to an abuse of process of court or that the complaint petition is filed for causing mere harassment to the accused. While we are not oblivious of the fact that although a large number of disputes should ordinarily be determined only by the civil courts, but criminal cases are filed only for achieving the ultimate goal, namely, to force the accused to pay the amount due to the complainant immediately. The courts on the one hand should not encourage such a practice; but, on the other, cannot also travel beyond its jurisdiction to interfere with the proceeding which is otherwise genuine. The courts cannot also lose sight of the fact that in certain matters, both civil proceedings and criminal proceedings would be maintainable.
In Rallis India Ltd. Vs. Poduru Vidya Bhushan (2011) 13 SCC 88, this Court expressed its views on this point as under:
At the threshold, the High Court should not have interfered with the cognizance of the complaints having been taken by the trial court. The High Court could not have discharged the respondents of the said liability at the threshold. Unless the parties are given opportunity to lead evidence, it is not possible to come to a definite conclusion as to what was the date when the earlier partnership was dissolved and since what date the respondents ceased to be the partners of the firm."
There is no denying of the fact that the satisfaction of the Magistrate can safely be challenged before the High Court in a proceeding under Section 482 of the Code of Criminal Procedure in terms of the decision of the Hon'ble Supreme Court reported in (1998) 5 SCC 749(Supra). The maintainability of the instant application under Section 482 of the Code of Criminal Procedure thus cannot be challenged and argument on that score by learned Advocate for opposite party fails. The decisions referred to herein above by learned Advocate for the petitioner reveal that the Hon'ble Apex Court has quashed the proceeding holding inter-alia that the pleadings on record do not constitute any offence under Section 406/420 of the Indian Penal Code. In the aforesaid decisions the provisions under Section 138/141 of the Negotiable Instrument Act, 1881 were not dealt with by the Hon'ble Supreme Court. On the contrary, Hon'ble Supreme Court has categorically observed in Sampelly Satyanarayana Rao Vs. Indian Renewable Energy Development Agency Limited (Supra) that the factual aspects/factual defences of the petitioners as to if the cheques were given as security or not or whether there was outstanding liability or not is a question of fact which can be determined only by the trial Court after recording evidences of the parties. Hon'ble Supreme Court has categorically observed that the High Court should not have expressed it's view on the disputed questions of fact in a petition under Section 482 of the Code of Criminal Procedure to come to a conclusion that the offence is made out and the High Court has erred in law in coming into factual aspects of the matter which were not admitted between the parties. In other words, while exercising the jurisdiction under Section 482 of the Code of Criminal Procedure, all such factual aspects cannot be scrutinized meticulously so as to come to logical conclusion that the offence has not been made out by the complainant/opposite party against the present petitioner by filing such petition of complaint.
In the premises set forth above and in view of the settled principle of law I do not find any merit in quashing the petition of complaint in terms of the prayer of the petitioner. The parameters of the jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure has by this time well settled by very many decisions of the Hon'ble Supreme Court. The application appears to be premature, if not devoid of merit and accordingly the application under Section 482 of the Code of Criminal Procedure stands dismissed.
The remaining CRR No. 2682 of 2016 and CRR No. 2685 of 2016 are also dismissed.
Let a copy of this order be kept in the record of CRR No.2682 of 2016 and CRR No. 2685 of 2016 for future reference.
Urgent photostat certified copy of this order, if applied for, be given to the parties as expeditiously as possible (Debi Prosad Dey, J.)