Jammu & Kashmir High Court
Gopal Pareek vs Raman Malhotra And Others on 3 November, 2018
Equivalent citations: AIRONLINE 2018 J AND K 347
Author: Sanjay Kumar Gupta
Bench: Sanjay Kumar Gupta
HIGH COURT OF JAMMU AND KASHMIR
AT JAMMU
CRMC No.39/2013 & IA No. 45/2013
Date of order: 03.11.2018
Gopal Pareek Vs. Raman Malhotra and ors.
Coram:
Hon'ble Mr. Justice Sanjay Kumar Gupta, Judge
Appearing counsel:
For Petitioner(s) : Mr. P. N. Raina, Sr. Advocate with
Mr. Rajnesh Oswal, Advocate and
Ms. Diksha Handoo, Advocate.
For respondent (s) : Mr. C. S. Gupta, Advocate
i/ Whether to be reported in Yes/No
Press/Media?
ii/ Whether to be reported in Yes/No
Digest/Journal?
1. In this petition filed under Section 561-A of the Code of Criminal Procedure Svt. 1989, the petitioner seeks quashing of the proceedings under Sections 420, 406, 468, 120-B of the Ranbir Penal Code, in case titled Raman Malhotra vs. Shri Krishna Khaitan and others, pending before the Special Mobile Magistrate under Passenger Tax and Shops Act, Jammu and all orders passed therein including the order dated 05.01.2013, whereby the court below has issued the process against the petitioner.
2. The facts giving rise to the filing of this petition briefly stated are that the petitioner is serving as Accounts Manager with M/s Khaitan Electrical Ltd. (hereinafter referred to as the Company) having its Registered office at A- 13, Cooperative Industrial Estate Balanagar, Hyderabad. The Company is involved in the business of manufacturing and deals inter alia in electrical items. It is contended that the respondent No.1 was appointed as Consignment Agent of the Company in the year 2000 and thereafter, his appointment as a Consignment Agent was renewed from time to time till 2004, when he was appointed as Area Distributor for the State of Jammu CRMC No. 39/2013 Page 1 of 18 and Kashmir. His appointment was renewed from time to time, which was lastly extended till 31.03.2010. During the course of his engagement with the company, various products of the Company were supplied to the respondent No.1 and in partial discharge of his liability; the respondent issued various cheques to the said Company, which included the cheque regarding which the respondent No.1 has filed the complaint before learned Special Mobile Magistrate (Passenger Tax and Shops Act) Jammu.
3. The Company presented the cheques given by the respondent No.1 to its banker for its encashment, which were dishonored. Thereafter, the Company instituted a criminal complaint under Section 138 of the Negotiable Instrument Act, 1881 before the Chief Metropolitan Magistrate, Calcutta, which is still pending before the Metropolitan Magistrate, 8th Court, Calcutta. Prior to the filing of the complaint, notice dated 10.09.2010 under Section 138 of N.I Act was also issued and same was received by respondent No.1 on 13.09.2010. The respondent No.1 appeared before the Court and was released on bail. During the pendency of the said criminal complaint, the respondent No.1 in order to harass the said Company and its officers filed a civil suit before the Principal District Judge, Jammu for settlement of account as well as for mandatory injunction. The written statement was also filed by the petitioner and other defendants therein. Initially the respondent succeeded in getting interim order exparte by the concealment of material facts from the trial court but subsequently the interim order was stayed by this Court vide order dated 04.03.2011. Thereafter, the respondent No. 1 filed a criminal complaint before the learned Special Mobile Magistrate under Passenger Tax and Shops Act, Jammu under section 420, 406, 468, 120-B RPC against the petitioner and others so as to compel the Company to abide by his demand. The Special Mobile Magistrate under Passenger Tax and Shops Act, Jammu on receipt of the complaint, issued directions to the Sr. Superintendent of Police, CRMC No. 39/2013 Page 2 of 18 Crime Branch, Jammu to conduct an enquiry under Section 202 of Code of Criminal Procedure. On the basis of the report furnished by the Crime Branch, the learned Magistrate vide order dated 05.01.2013 took cognizance of the offences and issued process against the petitioner and other accused persons. In the aforesaid factual background, the petitioner has approached this Court.
4. The petitioner being aggrieved of the impugned order as well as the proceedings being conducted in the complaint, has challenged the same in the instant petition on the following grounds:
(a) That the learned Magistrate has not applied his mind while taking cognizance of the offences and issuing the process against the petitioner.
(b) That without there being material on record to show the alleged commission of offence, impugned order issuing process against the petitioners has been passed.
(c) That the complaint has been filed by the respondent No. 1 as a counter blast to the complaint filed by the Company.
(d) That in the suit filed by the respondent No. 1, he has never mentioned that the blank cheque was given as security though in the suit he pleads that he has given Rs. 10 lacs as security, which is lying with the Company.
(e) That the impugned proceedings has been initiated with a sole intention of harassing and creating pressure upon the Company in order to coerce them to bow down to the illegal demands of the respondent and forgo its claim against the respondent.
(f) That a criminal action under Section 420/120/B of the IPC is clearly absent in the instant case.
(g) That offence under section 406 RPC is not made out is evident from the suit in which the respondent has categorically stated that sum of Rs. 10 lacs was given as security to the Company and that the Section 420 and Section 406 RPC are mutually exclusive and cannot go simultaneously.
(h) That no offence of forgery has been committed by the petitioner. The conversion of the Non-MICR to MICR has not been done by the petitioner as there is no allegation in the complaint or in the report that cheque in question was deposited by the petitioner. More so, it is finding of the RBI that MICR code was fixed by banker of complainant i.e. SBI and the petitioner has not played any role in this regard.CRMC No. 39/2013 Page 3 of 18
5. The respondent No.1 has filed the objections, wherein it is stated that the respondent being proprietor of Ruchi Sales Corporation started working as Consignment Agent in the year 2000 and then made Distributor of Khaitan Electrical Ltd. In the year 2006, the respondent got copy of details of different cheques taken by the Company from different dealers. Cheque No. 819501 at serial No. 30 as blank cheque given to the company at Jammu along with another blank cheque bearing No. 819502 in the year 2004. Security of Rs. 10, 00,000/- was also given to the Company in the year 2000 and it was agreed that the cheque will be presented only with permission of the respondent. That the petitioner and proforma respondents intentionally kept above mentioned two cheques with them with mala fide intention to use them in future to harass and deceive the respondent by interpolating/ inserting huge amount on it. He requested petitioner, respondent No. 2 and respondent No. 5 to return the cheques as answering respondent was making proper payments to the Company and moreover account number of answering respondent was also changed but blank cheques were never returned to him. It is stated that the cheque presented in the IDBI Bank by the accused persons was a forged cheque and memo issued by IDBI Bank dishonoring the cheque was also forged. That the IDBI Bank is also involved in criminal conspiracy against the respondent in order to defraud him of the huge amount of money. It is also stated that the facts showing that forgery of cheque and memo is done by petitioner and proforma respondents in connivance with bank officials, who are also part of criminal conspiracy.
6. This Court vide order dated 18.02.2013, issued notice to respondent No. 1 and stayed the proceedings before Special Mobile Magistrate under Passenger Tax and Shops Act, Jammu.
7. Learned counsel for the petitioner, while arguing the matter has reiterated all grounds taken in memo of petition.
CRMC No. 39/2013 Page 4 of 188. He has argued that when there is civil liability, criminal proceeding are barred and has relied upon 2007 (7) Supreme 297 case titled B. Suresh Yadav Vs. Sharifa Bee and anr, 2009 (1) SCC 706 (SC) 821 case titled Mahindra & Mahindra Financial Services Ltd. And anr. and 2013 ACR 133 case titled Paramjeet Batra Vs. State of Uttarakhand & ors. ; That court below has not applied judicial mind in issuing notice after taking cognizance. He has relied upon 1998 SC 128 case titled M/s Pepsi Foods Ltd and anr. Vs. Special Judicial Magistrate and ors, wherein it is held that order of magistrate must reflects judicial mind. That these proceeding have been initiated as counterblast to complaint filed before Calcutta court with regard to dishonour of cheque, he has relied upon 2009 (1) Crimes 144 (SC) case titled M/s Eicher Tractor Ltd. & ors. Vs. Harihar Singh & anr. Lastly it has been argued that even if cheque in question has been changed from non MICR to MICR ,it was not material alteration .He has relied upon 2012 (3) Crimes (Del) 114 case titled Manoj Kumar Vs. Anil Aggarwal.
9. Whereas counsel for respondent has argued that, forgery has been committed and on his cheque material alteration has been done in order to cheat him and put him to great loss. That his cheque has been made MICR from Non-MICR, by forgery for cheating. Further, in this petition a legal prosecution started by Court below cannot be curtailed.
10. Heard learned counsel for the parties and perused the case file. Respondent no.1 herein filed a complaint before JMIC, Jammu under section 420/406/468/120-B RPC. The relevant paras of complaint reads as under:-
"11) That the accused persons in response to the above civil suit of the complainant submitted written statement as defendants, in which they admitted that Cheque no 819501 dated 30.08.2010 drawn on State Bank of India, Karan Nagar Branch at. Jammu was presented by the defendant through their banker IDBI Bank Ltd. 44 Shakespeare Sarani, Kolkata-700017 and the cheque was returned unpaid. Accused persons have memo issued by the bank on record along with their written statement. It is pleaded by the CRMC No. 39/2013 Page 5 of 18 accused persons that the said cheque was dishonored on account of insufficiency of the funds in the account of accused.
12. The complainant was shocked to see that he had never issued any cheque of such a huge amount of Rs. 10880888/-(one crore eight lakh eight hundred eighty eight) to Khaitan Electrical Ltd. He was further shocked to know that a complaint u/s 138 Negotiable Instruments Act is filed against him in Calcutta. Complainant on inquiry came to know that he was cheated by the accused persons in a well planned conspiracy and surprisingly officials of IDBI Bank Ltd. 44, Shakespeare Sarani, Kolkata-700017 were also involved in the conspiracy to cause him wrongful loss and wrongful gain, to accused persons, who are associated with Khaitan Electricals Ltd.
13) That Khaitan Electrical Ltd. In course of its business has been taking the blank cheques from its dealers from time to time. The details blank cheques taken by the company from different dealers during 2006-2007 is annexed herewith as Annexure G. In this document the complainant's firm is shown at serial number 30. This document clearly shows that two blank cheques numbering 819501-2 with drawee bank as State Bank of India were deposited with Khaitan Electrical Ltd. Accused no. 5 & 6 dishonestly deceived complainant to give them blank cheques as security and promised not to use it without his prior permission. These blank cheques were entrusted to accused no. 5-6 for Khai:an Electrical Ltd at Jammu in the presence of Sanjeev Sharma employee of the Khaitan, Electrical Ltd. The complainant was given assurance of not using them without prior permission in any case by accused no. 5&6. Complainant gave them the blank cheque in addition to cash security kept with company amounting to Rs.10,00,000/-. As per understanding between the parties, these cheques were to be used by the accused persons with prior permission of complainant. Accused persons intentionally kept above mentioned two cheques with them with mala fide intention to use them in future to harass and deceive the complainant by interpolating/inserting huge amount on it and using it in the manner in which it is ordinarily used by them. The mala fide intention of the accused persons can be gathered from the fact that for last six years they never used this cheque as many a time payments were delayed during the course of business.
14) That in year 2006 complainant somehow managed to get Annexure G from some employee of the Khaitan Company. He requested accused no. 5 & 6 to return the cheques as complainant was making proper payments to them and moreover account number of complainant was also changed but cheques were never returned to him. Complainant also requested accused no. 2 to return these cheques in 2009 but he also refused to do so without any reason.
15) That the accused persons forged cheque no.819501 (hereinafter referred cheque) and presented it through their banker IDBI Bank Ltd and the CRMC No. 39/2013 Page 6 of 18
-bank issued a memo showing that the cheque is dishonored due to reason that it "exceeds arrangement as per opening balance". The cheque was a non MICR (Magnetic Ink character Recognition ) cheque issued from a Non MICR cheque book by the complainant in 2004 whereas the cheque which was presented in IDBI bank was a MICR cheque with same cheque number on which interpolation was done with MICR ink. Letter issued by Manager of State Bank of India Karan Nagar branch showing that the cheque is a non MICR cheque is annexed as Annexure H.
16) That in order to understand difference between MICR and non MICR cheque it is important to note that MICR stands for Magnetic Ink Character cheques were validated and passed manually. The account numbers had to be manually validated and tagged. This MICR is a magnetic code that is conspicuously printed on the bottom of the cheque. When the cheque is placed under a MICR reader, the machine would automatically identify the account number and details of the person who issued the cheque. This aids in faster processing of cheques. In addition to their unique fonts, MICR characters are printed with a magnetic ink or toner. Magnetic printing is used so that the characters can be reliably read into a system, even when they have been overprinted with other marks such as cancellation stamps. The characters are read with a device similar in nature to the head of an audio tape recorder, and the letterforms' bulbous shapes ensure that each letter produces a unique waveform for the read head. The first 6 digits printed on a cheque is cheque no. Then 9 digits is MICR code First three digits (1-3) denote city and are same/identical first three digit of pin code of city for example first three digit of Pin code of Jammu =180 so first three digit of MICR code of all the bank branches located in Jammu must be 180. 4-6 digits denote for Bank each bank has given a three digit code, 4-6 digit is= Bank Code eg SBI code is"002"so 4-6 digit of MICR cod will be the bank code of SBI irrespective of its location in the India (7-9) Last three digits denote branch code, it is in serial wise, like the Branch Code of the Karan Nagar Branch of SBI Bank is 008 so the MICR umber written on all cheque books issued by the Jammu SBI Karan Nagar Branch will in all cases be 180002008.
17) That the accused persons were aware of the fact that the complainant has stopped the payment of all the cheques pending settlement of accounts. So accused no 3, 4 & 5 who were dealing with the financial matters of the Khaitan Company hatched a conspiracy in connivance with other accused persons and forged the cheque and presented it in IDBI.
18) That the cheque, which was produced in the IDBI bank by the accused persons was a forged cheque and memo issued by IDBI bank dishonoring the cheque was also forged. IDBI Bank is also involved in CRMC No. 39/2013 Page 7 of 18 criminal conspiracy against the complainant in order to defraud him of the huge amount of money."
11. The JMIC on 06.07.2011 passed detailed order. Relevant extract of the order reads as under:-
"Taking into account the nature of the acquisition put forth against the accused, the material available on records and applying my mind to the facts and circumstances of the case. I am of the opinion that the matter deserves thorough elucidation. That being so, I find it proper to postpone the issuance of processes of compelling the accused person and institute an enquiry u/s 202 of the Code of Criminal Procedure to ascertain the truth and false hood of the complaint against the accused. As responsibility imposed and confidence reposed by the Legislature on and in Magistrate as to exercise of his discretion in dismissing of the complaint and issuing the process against the accused is very onerous and the Magistrate has to exercise this responsibility and confidence Judiciously and not arbitrarily.
The object of enquiry and investigation u/s 202 of Cr.P.C is to ensure that no person is compelled to answer a Criminal Charge unless the court is satisfied that there is Prima Facie case for proceeding and issue process against him.
The Hon'ble Apex Court in Chander Dev Vs Parkash Chander Bose AIR 1963 SC 1430 has held:
"It is bounded duty of the Magistrate to elicit all facts not merely with a view to protect interest of the accused persons but also with a view to bring to book person or persons against whom grave allegations are made. The enquiry or investigation is, therefore, designed to afford the Magistrate an opportunity of either confirming or removing any hesitation he may feel in issuing process against the accused and to form an opinion as to whether process should be issued or not........."
Keeping in view the facts and circumstances of the case and in order to ascertain the truth and false hood of the complaint I deem it proper to hold an enquiry u/s 202 Cr.P.C before issuing the process against the accused. Hence SSP Crime Branch Jammu is directed to conduct an enquiry and submit a report on or before the next date of hearing fully elucidating therein the truth and false hood in the allegations made against the accused in the present complaint. Copy of this order along with copy of the complaint be forwarded to SSP Crime Branch Jammu for compliance."
12. Pursuant to order dated 06.07.2011 passed by JMIC, Crime branch conducted the investigation and after recording the statements of witnesses CRMC No. 39/2013 Page 8 of 18 found offence proved against the accused persons. The relevant findings of Crime branch read as under:-
"During the course of further enquiries the matter was taken up with the Khaitan Electrical Headquarters and summons u/s 160 Cr.PC were served to the management/suspects through E-mail and telephonic requests were made to the suspects for attending the investigation alongwith the records which included the original cheque No. 819501 amounting to Rs.1,08,80,888. Inspite of repeated requests most of the suspects avoided to attend the course of enquiry on one pretext or the other and neither did they provide the cheque in question. Two of the suspects namely Sh. Gopal Pareek, Chief Accounts Officer Khaitan Electrical, and Sh. Ujwal Jain Asst. General Manager Khaitan Electrical attended Crime Branch, Jammu and their statements were recorded. During the course of questioning both suspects admitted that huge amounts of money on different accounts was due to the complainant Sh. Raman Malhotra and in this regard a number of meetings took place between the company management and complainant Raman Malhotra at Kolkata, Chandigarh and Jammu and most of his ciaims were found to be genuine and have been agreed by the management during the process of reconciliation of accounts which has been reflected in minutes of meetings signed by both the parties. (i.e. Representative of company management and complainant Raman Malhotra). Both the suspects have admitted that blank cheques were being deposited with the company as security but who has misused these cheques is not in their knowledge. They have further stated that such a huge amount was not outstanding with the "Ruchi Sales Corporation" neither could they produce any document/bills which will suggest that goods worth such a huge amount were ever supplied to Ruchi Sales Corporation at any particular point of time.
During the course of further enquiries Sh. Zubin D Mistry S/o Dada Bhoi Khursheed Ji R/o Mumbai who was appointed as mediator by both the parties was also summoned to Crime Branch, Jammu, but he could not attend the investigation, however, he has submitted his self statement alongwith connected documents through E-mail on 19.1.2012 which are placed on record. The relevant portions of his statement are reproduced under:-
He has admitted that both parties had total five meetings three in Kolkata and two in Jammu, dates as a) 30/11/2011, to 02/12/2011 at Kolkata, Mr. Ujwal Jain not in meeting, b) 24/02/2012 to 27/02/2012 at Jammu, c) 19/06/2012 to 20/06/2012 at Jammu d) 05/08/2012 to 08/08/2012 at Kolkata,
e) 19/11/2012 at Kolkata, wherein Mr. Malhotra, Mr. Ujwai Join, Mr. Gopal Pareek, Mr. Swapan Dass, Myself along with Vice Chairman who was only in Kolkata meetings and Mr. Ujwal Jain and Mr. Gopal Pareek in last Kolkata meeting were not there.
In the last two meetings out of the claims of Ruchi Sales Corporation from 2000 to 2010 were accepted and cleared by company of around 1,32,00,000/- as recorded in last 19th & 20th June meeting in Jammu, wherein only sales returns were get to be tallied by both since Ruchi Sales claims for sales CRMC No. 39/2013 Page 9 of 18 returns was more and company informed having received less. This both parties were to meet at Chandigarh on 23th June, but could not for some or other reasons from both ends, even in last meeting on 8 August 2012 it was decided to meet at Chandigarh for three days along with Mr. Ujwal Jain and clear the resolve the balance of this matter of dispute amount of Rs.44 lacs only left balance subject to cross check by both parties. He has further stated that taking of blank cheques from measure C&F is true as it was policy in Khaitan Company and the same were being kept in the custody of Sr. Persons of the management. He has further stated that it is very evident as to some one concern in account department at that point of time of dispute, filled in the blank cheque and then may be at instructions of some Head of Department in accounts along with advise of advocate who had made out the case, have planted the said cheque. I had in the very first meeting noted in Kolkata that when company had produce an excel sheet of entire accounts and claim of Ruchi Sales had one very big point, total sales of Ruchi Sales Corporation as per company records Rs.2,01,31,000/- and claims are agreed by company Khaitan Electrical Ltd. 81,05,000/- therefore dispute amount to be settle was before any meetings was for only Rs.1,20,26,000/- which were then subject to verification, cross tally, supporting and given to Ruchi Sales Corporation so as to resolve all matters. I had once asked the Advocate Mr. Imtiyaz Ahmed in Kolkata who looks after all company 138 cases and also sits in our H.O as to why then said cheque was made and along with other 14 cheques which were stopped payment by Ruchi Sales Corporation to total of around 1,48,00,000/- he informed me then, that it is our normal practice in law to carry out such matters, which in turn brings pressure on the party to settle fast, this was not approved by me and that's the reason as a mediator taught in natural justice to both, went into depth of accounts and justify that no party takes more from any then legitimate due to each other. Therefore the case of the said cheque has wrongly been mitated out under wrong legal advice of advocate Mr. lmtiyaz Ahmed that is what hypothical is reasoning of mine I may be wrong also.
1. In support of his statement the mediator and the complainant have provided documents which clearly show that a huge amount of more than one Crore is due to the complainant (Ruchi Sales Corporation) from Khaitan Electrical Ltd, which have been agreed by the parties as per the minutes of meeting held on 19 Feb, 2012 and minutes of meetings have been signed by suspect Swpan Kumar Dass, accounts head of the company, Raman Malhotra Complainant and Mediator Zubin D. Mistary.
2. There is a difference of replacement of material i.e. the appliances/goods which are called back from the customers within warranty period for actual replacement by the company. The Ruchi Sales Corporation have made much replacement to the customers which they were supposed to get from the Company ( Khaitan Electrical Ltd.), but the replacements has not been made which has resulted into heavy loss for Ruchi Sales Corporation and same is reflected in the statement signed by both the representatives of Khaitan Electrical Ltd. Ruchi Sales Corporation and arbitrator/Mediator Sh. Zubin D. Mistary.
CRMC No. 39/2013 Page 10 of 183. The thorough scrutiny of cheque No.819501 amounting to Rs.1,08,80, 888/- deposited as a blank cheque by the complainant with the company as security, evidently seems to have been tampered with by changing it from Non MICR to MICR and tampering is evident to open eye. Further no stamps of Ruchi Sales Cbrporation are affixed which are being appended on routine cheques by Ruchi Sales Corporation. Further no bank memo was with this cheque and the same has been authenticated by RBI also with regard to this cheque. The RBl report is also on record.
4. Instead of repeated requests the key suspects did not attend the investigation neither did they provide original cheque with bank memo nor did they intimate the antecedents of person who has presented this cheque in the bank.
5. Instead of cooperating with the Investigating agency they used pressure tactics by filing a civil suit u/s 138 (NIA) against the complainant at Kolkata, so that he can fall in line and further filed a complaint before Id. CJM that they are being harassed by Crime Branch at the behest of Complainant Sh. Raman Malhotra.
6. Independent witness i.e. Sh. Zubin D Mistry who acted as Mediator on behalf of the both the parties and is a signatory of the proceedings has stated that the company advocate Mr. Imtiyaz Ahmed when told about the cheque in question and case filed by him against Ruchi Sales Corporation informed Sh. Zubin D Mistry that it is our normal practice to carry out such matters which in turn brings pressure on the party to settle fast, which clearly shows the Criminal intention of the company management towards the complainant.
Keeping in view, the above facts and circumstances wherein prima facie, it has been established that huge amounts of money were due to the complainant Raman Malhotra owner of Ruchi Sales Corporation, Jammu as per documentary evidence and further tampering on the cheque No 819501 is also evident on the basis of which the suspects have filed a suit u/s 138 Negotiable Instrument Act against Sh. Raman Malhotra Complainant in the Court Metropolitan Magistrate Kolkata to pressurize him for settling the disputes as per their conditions, as they were owing huge amounts towards the complainant. The above discussed omissions and commissions on part of the suspects attract the provisions of forgery and cheating on part of the suspects.
13. JMIC after perusing the report of Crime branch, issued process against petitioners on 05.01.2013.
14. In 2008 (3) SCC 753 case titled Som Mittal v. Govt. of Karnataka, it has been held as under:-
"(10) In a catena of decisions this Court has deprecated the interference by the High Court in exercise of its inherent powers under Section 482 of the CRMC No. 39/2013 Page 11 of 18 Code in a routine manner. It has been consistently held that the power under Section 482 must be exercised sparingly, with circumspection and in rarest of rare cases. Exercise of inherent power under Section 482 of the Code of Criminal Procedure is not the rule but it is an exception. The exception is applied only when it is brought to the notice of the Court that grave miscarriage of justice would be committed if the trial is allowed to proceed where the accused would be harassed unnecessarily if the trial is allowed to linger when prima facie it appears to Court that the trial would likely to be ended in acquittal. In other words, the inherent power of the Court under Section 482 of the Code of Criminal Procedure can be invoked by the High Court either to prevent abuse of process of any Court or otherwise to secure the ends of justice.
(11) This Court, in a catena of decisions, consistently gave a note of caution that inherent power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases. This Court also held that the High Court will not be justified in embarking upon an inquiry as to the reliability or genuineness or otherwise of the allegations made in the F.I.R. or the complaint and that the extra-
ordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whims and caprice.
(12) We now refer to a few decisions of this Court deprecating the exercise of extra ordinary or inherent powers by the High Court according to its whims and caprice.
(13) In State of Bihar v. J.A.C. Saldanha (1980) 1 SCC 554 this Court pointed out at SCC p. 574:
The High Court in exercise of the extraordinary jurisdiction committed a grave error by making observations on seriously disputed questions of facts taking its cue from affidavits which in such a situation would hardly provide any reliable material. In our opinion the High Court was clearly in error in giving the direction virtually amounting to a mandamus to close the case before the investigation is complete. We say no more.
(14) In Hazari Lal Gupta v. Rameshwar Prasad (1972) 1 SCC 452 this Court at SCC p. 455 pointed out:
In exercising jurisdiction under Section 561-A of the Criminal Procedure Code, the High Court can quash proceedings if there is no legal evidence or if there is any impediment to the institution or continuance of proceedings but the High Court does not ordinarily inquire as to whether the evidence is reliable or not. Where again, investigation into the circumstances of an alleged cognizable offence is carried on under the provisions of the Criminal Procedure Code, the High Court does not interfere with such investigation because it would then be the impeding investigation and jurisdiction of statutory authorities to exercise power in accordance with the provisions of the Criminal Procedure Code.CRMC No. 39/2013 Page 12 of 18
(15) In Jehan Singh v. Delhi Administration (1974) 4 SCC 522 the application filed by the accused under Section 561-A of the old Code for quashing the investigation was dismissed as being premature and incompetent on the finding that prima facie, the allegations in the FIR, if assumed to be correct, constitute a cognizable offence.
(16) In Kurukshetra University v. State of Haryana (1977) 4 SCC 451, this Court pointed out:
It surprises us in the extreme that the High Court thought that in the exercise of its inherent powers under Section 482 of the Code of Criminal Procedure, it could quash a first information report. The police had not even commenced investigation into the complaint filed by the Warden of the University and no proceeding at all was pending in any court in pursuance of the FIR. It ought to be realized that inherent powers do not confer an arbitrary jurisdiction on the High Court to act according to whim or caprice. That statutory power has to be exercised sparingly, with circumspection and in the rarest of rare cases.(emphasis supplied) (17) In State of Bihar v. Murad Ali Khan (1988) 4 SCC 655 this Court held that the jurisdiction under Section 482 of the Code has to be exercised sparingly and with circumspection and has given the working that in exercising that jurisdiction, the High Court should not embark upon an enquiry whether the allegations in the complaint are likely to be established by evidence or not."
15. In Andhra Pardesh vs. Goconda Linga Swamy AIR 2004 3967; it is held that - The complaint/F.I.R. has to be read as a whole. If it appears that on consideration of the allegations in the light of the statement made on oath of the complainant or disclosed in the F.I.R. that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint/F.I.R. is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court. When information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in Court which decides the fate of the accused person. The allegations of mala fides against the informant are CRMC No. 39/2013 Page 13 of 18 of no consequence and cannot by itself be the basis for quashing the proceeding.
16. In view of above law, criminal proceeding can only be quashed in order to prevent abuse of process of law or to otherwise secure the ends of justice. The expression ends of justice and to prevent abuse of process of any court are intended to work out either when an innocent person is unjustifiable subjected to an undeserving prosecution or if an ex-facie all merited prosecution is throttled at the threshold without allowing the material in support of it. This court while exercising the power under section 561-A Cr.P.C., does not function as court of trial, appeal or revision. Inherent jurisdiction has to be exercised sparingly, carefully and with great caution. These powers cannot be used to stifle the legitimate prosecution. This is discretionary power vested in High Court to do substantial justice.
17. In the present case, investigation conducted by Crime Branch clearly reveals that huge amount more than one crore is due towards respondent no.1 (complainant) from the petitioner and Proforma respondents herein; it has also been established during investigation conducted by C/B that cheque no.819501 allegedly amounting to Rs.1,08,80,888/- has been tampered with, by changing it from non-MICR to MICR, and tampering was evident from open eye. I have myself perused the photocopy of cheque, the overlapping on cheque number is apparent and MICR number has been impressed on it.
18. Further the finding of C/B with regard to forgery of cheque no.819501 by converting it Non-MICR to MICR, is evident from the fact that the cheque no.819503 which has been issued after alleged forged cheque is non MICR. Further cheque no. 819503 is dated 1/3/2004 for amount of Rs.1 lakh, whereas cheque in dispute, which is having cheque no.819501 bears date as 30.8.2010. Had petitioner and Proforma respondents been so fair and CRMC No. 39/2013 Page 14 of 18 honest, they would have appeared before C/B; but C/B has categorically stated that key suspects despite repeated request, they neither appeared nor intimated the antecedent of person who presented the cheque in dispute. There is also finding of C/B that one independent witness Zubin D Mistry who acted as mediator on behalf of both the parties and is signatory of proceedings, has stated that company advocate told him that, cheque bounce case has been filed to put pressure on party to settled dispute. Respondent no.1 (complainant) also lodged a complaint in this regard before RBI on 14.6.2011; RBI conducted the investigation in detail and RBI held that ( concluding para ) "The office had examined the facts and circumstances made by the parties. It was observed that this is an issue of alleged fraudulent interpolation of a MICR cheque no. on a non-MICR cheque. SBI states that the instrument was not paid and this in effect has helped to stave off the loss. However, since the request is for investigation into the issue of encoding of the cheque, the complaint is outside the ambit of the Banking Ombudsman scheme. As the bank was not found to be deficient in service given the circumstances narrated by the bank, the case has been closed under clause 13(a) of the Banking Ombudsman Scheme, 2006. However, it may be added that the Banking Ombudsman is only an alternate forum for grievances redressal and the complainant is free to approach any other forum, if they so desires, for redressal of their complaint."
19. The argument of counsel for petitioner that these proceedings are counter blast to the complaint filed under section 138 of N.I Act at Calcutta, is not tenable, because there is clear cut finding of investigating agency that forgery has been committed for cheating the complainant, as cheque has been tampered. Another argument that civil proceeding are pending before District Judge, Jammu, so present complaint is not maintainable, is also not tenable as civil suit is pertaining to rendition/settlement of account and not pertaining to CRMC No. 39/2013 Page 15 of 18 cheque in question. Further, law is clear that civil and criminal liability can go simultaneously, when there is element of criminal act in allegations also. Another argument of counsel for petitioner is that in terms of section 20 of N.I. Act, even if it is considered that cheque in question has been converted from Non MICR to MICER, there was implied authority of drawer to holder to do this, as signature on cheque has been admitted. I have gone through this aspect of matter, legally this argument is not tenable, because holder can fill date and amount, but cannot forge material altercation in the cheque. Both MICR and non MICR have different kind of cheque books issued by bank to his customer. Previously banks had been issuing non MICR cheque books, now banks have stopped issuance of non-MICR cheque books. This has necessitated the change of MICR Codes and issuance of cheque books with new MICR codes. The MICR code has nine digits in it with each three digits signifying some important information about the transaction and the bank. The first three digits in the MICR code represent the city code that is the city in which the bank branch is located. In most cases it is in line with the PIN code of the postal addresses in India. The next three digits stand for the bank code while the last three digits represent the bank branch code. For example, if you have an account with State Bank of India (SBI) Mumbai (Central) then its nine digit MICR code will be 400002009 wherein: 400, the first three digits representing the city code for Mumbai; 002, the next three digits representing the bank code for SBI; And 009, the last three digits representing the bank branch code for Andheri (West). Unlike the manual clearing of cheques where there is a possibility of many human errors and subsequent delay in clearing, the MICR code on the cheque printed with a unique magnetic ink usually iron oxide has magnetic material present in it and thus makes it machine-readable and almost error proof. Under this method the reading machine or a cheque sorting machine reads through a cheque when inserted and identifies the branch the cheque belongs to and activates the automation clearing process. The MICR code is so clear and fine that the machine could read it even if the CRMC No. 39/2013 Page 16 of 18 MICR code isn't visible due to other marks or stamps on it. Holder of cheque or bank cannot on their own can change non MICR cheque into MICR, without permission of drawer, because it amounts to forgery. Forgery is defined under Section 463 RPC. Forgery is defined under Section 463 RPC.
"463. Forgery- Whoever makes any false document or part of a document, with intent to cause damage or injury to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery."
20. Making of false document is defined in Section 464 of RPC.
"Sec.464. Making a false document -A person is said to make a false document or false electronic record- First- who dishonestly or fraudulently-makes, signs seals or executes a document or a part of a document; makes or transmits any electronic record or a part of any electronic record;affixes any digital signature on any electronic record ;makes any mark denoting the execution a document or the authenticity of the digital signature; with the intention of causing it to be believed that such document or part of document, electronic record or digital signature was made, signal, sealed, executed, transmitted or affixed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed, executed or affixed; or Secondly- who, without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document or an electronic record in any material part thereof, after it has been made, executed or affixed with digital signature either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly- Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document or an electronic record or to affix his digital signature on an electronic record, knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practiced upon him, he does not know the contents of the document or the nature of the alteration]."
21. As per sections 463/464 RPC, the person who is charged with offence of forgery has to make sign, seal and to execute a document or part of document, which he knows that it is false. To attract sections 468 there has to be alteration of document or part of document dishonestly and fraudulently. Further, if the document is to be altered, it has to be some gain or with such objective on the part of the accused. In the present case, there are clear cut allegations that accused have altered the cheque, CRMC No. 39/2013 Page 17 of 18 knowingly that non-MICR cheque has no value and only MICR cheque can be valid. It is not case of petitioner that there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceeding. The laws cited by counsel for petitioner, are not applicable because facts of those cases are quite different to that of present case.
22. Hence, this petition is dismissed. Stay, if any, is vacated. Record be sent back to the trial Court forthwith for further proceeding.
( Sanjay Kumar Gupta ) Judge Jammu 03.11.2018 Narinder CRMC No. 39/2013 Page 18 of 18