Delhi High Court
Sumit Pratap vs Icici Bank Ltd. & Anr. on 6 December, 2019
Author: Rajnish Bhatnagar
Bench: Rajnish Bhatnagar
$~50
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 06.12.2019
+ WP(CRL.) 3417/2019 & CRL. M.A. 42101/2019
SUMIT PRATAP
..... Petitioner
Through: Mr. Anil Kaushik, Mr. Abhishek
Mishra and Mr. Akash Bhardwaj,
Advocates.
Versus
ICICI BANK LTD & ANR.
.....Respondents
Through: Mr. Puneet Kumar Bhalla, Adv. for
respondent No. 1.
Mr. R.S. Kundu, A.S.C. for the State
with Mr. Hitesh Vali and Bhagat
Singh, Advocates.
SI Sanjeev Kumar- P.S. Paharganj,
Delhi.
CORAM:
HON'BLE MR. JUSTICE RAJNISH BHATNAGAR
RAJNISH BHATNAGAR J. (ORAL)
CRL. M.A. 42102/2019
Exemption allowed, subject to all just exceptions.
The application stands disposed of.
WP(CRL.) 3417/2019 Page 1 of 13
WP(CRL.) 3417/2019 & CRL. M.A. 42101/2019
1. Issue notice. Ld. A.S.C. for the State who appears on advance
notice, accepts notice. Ld. counsel for the respondent No. 1who also
appears on advance notice, accepts notice.
2. The present Writ Petition has been filed by the petitioner under
articles 226 & 227 of the Constitution of India read with section 482 of
the Code of Criminal Procedure, 1973 for quashing of the criminal
complaint bearing CC No. 5939 of 2019 titled as "ICICI Bank Ltd.
Versus Sumit Pratap" pending before the Court of Ld. Metropolitan
Magistrate Ms. Tapasya Agarwal, Central District, Tis Hazari Courts,
Delhi and all other proceedings initiated out of the said complaint
including the order dated 03.06.2019.
3. Briefly stated the facts of the case are that in the year 2015 the
petitioner booked a flat which was proposed to be part of the project
named "Victory Ace"at Gautam Budh Nagar, UP (hereinafter called "the
project") floated by M/s Dream Procon Pvt. Ltd. (hereinafter called "the
builder"). The builder allotted flat bearing No. 2701, Tower A1, Unit
Type (Spade B) 3 BHK + 2T measuring 1495 Sq. feet and in pursuance
thereof the builder and the petitioner entered into an allotment agreement
according to which the total sale consideration for the said flat was Rs.
68,99,425/- and the same was a construction linked payment plan.
4. After the issuance of the allotment letter, the petitioner entered
into a tri-partite loan agreement dated 27.08.2015 with the builder and
respondent No. 1. As per the Tri-partite loan agreement, even though
WP(CRL.) 3417/2019 Page 2 of 13
petitioner is termed as the ällotee/borrower", the agreement dated
27.08.2015, is in the form of a Project financing agreement between the
builder and the respondent No. 1 Bank and it is the builder who is liable
to pay any amount advanced by the bank to the builder. The agreement
stipulates that upon the transfer of the flat or upon termination of the
allotment agreement, it is the builder who is liable to pay any such
amount of money advanced by the bank.
5. According to the petitioner after the execution of the agreement
dated 27.08.2015, the bank started disbursing funds directly to the
builder in advance which were in excess of what has been stipulated in
schedule B to the agreement dated 27.08.2015, which was in
contravention of the agreement as the builder did not adhere to the
construction schedule, as prescribed and agreed to between the parties.
Since the builder did not comply with the agreed timeline of construction
and was not in a position to deliver the possession of the flat as
construction activities had come to a halt and the builder had abandoned
the project, so the petitioner vide letter dated 03.10.2018, terminated the
allotment agreement and tri-partite loan agreement dated 27.08.2015 and
the fact of termination of the allotment agreement and the surrender of
the flat was also communicated to respondent No. 1 bank vide e-mail
dated 04.10.2018.
6. According to the petitioner, as per the tri-partite agreement dated
27.08.2015, upon termination the builder was obligated to either refund
the money to respondent No. 1 bank or enter into a fresh tri-partite
agreement with a new prospective buyer. However, the respondent No.
WP(CRL.) 3417/2019 Page 3 of 13
1 bank, instead of pursuing its remedies against the builder, with a
malafide intent of unjustly enriching itself presented cheque No. 355083
of Rs. 17,00,000/- dated 04.04.2019 for encashment in its own branch at
Jhandewalan Extension, New Delhi, which was one of few cheques
issued by the petitioner to respondent No 1 bank as security, in fact the
amount claimed by the respondent No. 1 was neither payable, nor due
and not a legally enforceable debt.
7. Subsequently, on 12.05.2019, respondent No. 1 filed a criminal
complaint bearing CC No. 5939 of 2019 under section 138 of the
Negotiable Instruments Act against the petitioner. The Ld. Trial Court
vide impugned order dated 03.06.2019 issued summons vide a common
order against different accused in different complaints arising out of
separate transactions.
8. It is further the case of the petitioner that National Company Law
Tribunal, New Delhi ("NCLT") vide order dated 06.09.2019, passed in
Insolvency Petition bearing No. IB1771/(ND)/2018 titled as "Priyanshi
Arora Vs. M/s Dream Procon Pvt. Ltd." initiated Corporate Insolvency
Resolution Process (CIRP) against the builder and an Interim Resolution
Professional (IRP) has already been appointed. The IRP vide notice
dated 17.10.2019, invited the creditors of the builder to submit their
claims. According to the petitioner, he has also filed a petition bearing
No. IB1628/(ND)/2018 titled as "Sumit Pratap & Ors Vs. M/s Dream
Procon Pvt. Ltd." under Section 7 of the Insolvency and Bankruptcy
Code, 2016.
WP(CRL.) 3417/2019 Page 4 of 13
9. According to the petitioner, the continuation of the criminal
proceedings against him infringes on his right to liberty under Article 21
of the Constitution of India, as he is a victim of fraud perpetuated by
builder and the petitioner has been wrongfully arrayed as an accused for
an amount which is recoverable from the builder.
10. It is further the case of the petitioner that in view of the order
dated 06.09.2019, passed by the NCLT, the respondent No. 1 can submit
its claim against the builder to the IRP and the petitioner cannot be
arrayed as an accused at the behest of the officials of the respondent No.
11. According to the petitioner, the builder has acted in collusion as
firstly the bank disbursed excess funds in advance without the builder
complying with construction schedule and secondly instead of pursuing
its remedies against the builder as per the terms of tri-partite agreement
date 27.08.2015, the respondent No. 1 initiated criminal proceedings
against the petitioner with a malafide intent to extort money, hence this
petition.
12. It is urged by the counsel for the petitioner that upon the
termination of tripartite agreement dated 27.08.2015, it was the builder
who was suppose to refund the money to respondent No. 1 bank or enter
into a fresh tripartite agreement with a new perspective buyer. It is
submitted that the respondent No. 1 fraudulently presented the cheque in
question which was one of the few cheques issued by the petitioner to
respondent No. 1 as security and it is not a legal enforceable debt.
13. On the other hand, the counsel for the respondent No. 1 who
appears on advance notice submitted that there is no illegality in the
WP(CRL.) 3417/2019 Page 5 of 13
impugned order dated 03.06.2019 and the petitioner can take all his
defences during the course of trial and an offence U/s 138 NI Act is
technical in nature and defences which the petitioner can take are inbuilt.
14. Coming to the legal position and taking into consideration the
various provisions of Cr.PC which have been discussed in various
judgments time and again demonstrate that the Negotiable Instruments
Act, provides sufficient opportunity to a person who issues the cheque.
Once a cheque is issued by a person, it must be honoured and if it is not
honoured, the person is given an opportunity to pay the cheque amount
by issuance of a notice and if he still does not pay, he is bound to face
the criminal trial and consequences. It is seen in many cases that the
petitioners with malafide intention and to prolong the litigation raise
false and frivolous pleas and in some cases, the petitioners do have
genuine defence, but instead of following due procedure of law, as
provided under the NI Act and the Cr.PC, and further, by misreading of
the provisions, such parties consider that the only option available to
them is to approach the High Court and on this, the High Court is made
to step into the shoes of the Metropolitan Magistrate and examine their
defence first and exonerate them. The High Court cannot usurp the
powers of the Metropolitan Magistrate and entertain a plea of accused, as
to why he should not be tried under Section 138 of the NI Act. This plea,
as to why he should not be tried under Section 138 of the NI Act is to be
raised by the accused before the Court of the Metropolitan Magistrate
under Section 251 of the Cr.PC & under Section 263(g) of the Cr.PC.
Along with this plea, he can file necessary documents and also make an
WP(CRL.) 3417/2019 Page 6 of 13
application, if he is so advised, under Section 145(2) of the NI Act to
recall the complainant to cross-examine him on his plea of defence.
However, only after disclosing his plea of defence, he can make an
application that the case should not be tried summarily but as a summons
trial case.
15. An offence under Section 138 of the NI Act is technical in nature
and defences, which an accused can take, are inbuilt; for instance, the
cheque was given without consideration, the accused was not a Director
at that time, accused was a sleeping partner or a sleeping Director,
cheque was given as a security etc. etc., the onus of proving these
defences is on the accused alone, in view of Section 106 of the Indian
Evidence Act, 1872. Since the mandate of the legislature is the trial of
such cases in a summary manner, the evidence already given by the
complainant by way of affidavit is sufficient proof of the offence and
this evidence is not required to be given again in terms of section 145(1)
of the NI Act and has to be read during the trial. The witnesses i.e. the
complainant or other witnesses can be recalled only when the accused
makes such an application and this application must disclose the reason
why the accused wants to recall the witnesses and on what point the
witnesses are to be cross examined
16. The offence under Section 138 of the NI Act is an offence in the
personal nature of the complainant and since it is within the special
knowledge of the accused as to why he is not to face trial under section
138 N.I. Act, he alone has to take the plea of defence and the burden
cannot be shifted to complainant. There is no presumption that even if an
WP(CRL.) 3417/2019 Page 7 of 13
accused fails to bring out his defence, he is still to be considered
innocent. If an accused has a defence against dishonour of the cheque in
question, it is he alone who knows the defence and responsibility of
spelling out this defence to the Court and then proving this defence is on
the accused. Once the complainant has brought forward his case by
giving his affidavit about the issuance of cheque, dishonour of cheque,
issuance of demand notice etc., he can be cross-examined only if the
accused makes an application to the Court as to, on what point he wants
to cross examine the witness(es) and then only the Court shall recall the
witness by recording reasons thereto.
17. Sections 143 and 145 of the NI Act were enacted by the
Parliament with the aim of expediting trial in such cases. The provisions
of summary trial enable the respondent to lead defence evidence by way
of affidavits and documents. Thus, an accused who considers that he has
a tenable defence and the case against him was not maintainable, he can
enter his plea on the very first day of his appearance and file an affidavit
in his defence evidence and if he is so advised, he can also file an
application for recalling any of the witnesses for cross-examination on
the defence taken by him.
18. In view of the procedure prescribed under the Cr.PC, if the
accused appears after service of summons, the learned Metropolitan
Magistrate shall ask him to furnish bail bond to ensure his appearance
during trial and ask him to take notice under Section 251 Cr.PC and
enter his plea of defence and fix the case for defence evidence, unless an
application is made by an accused under Section 145(2) of NI Act for
WP(CRL.) 3417/2019 Page 8 of 13
recalling a witness for cross-examination on plea of defence. If there is
an application u/s 145(2) of N.I. Act for recalling a witness of
complainant, the court shall decide the same, otherwise, it shall proceed
to take defence evidence on record and allow cross examination of
defence witnesses by complainant. Once the summoning orders in all
these cases have been issued, it is now the obligation of the accused to
take notice under Section 251 of Cr. PC., if not already taken, and enter
his/her plea of defence before the concerned Metropolitan Magistrate‟s
Court and make an application, if they want to recall any witness. If they
intend to prove their defence without recalling any complainant witness
or any other witnesses, they should do so before the Court of
Metropolitan Magistrate.
19. Now, coming to the jurisdiction, suffice it to say that the Court, in
exercise of its jurisdiction under Section 482 Cr.PC. cannot go into the
truth or otherwise of the allegations made in the complaint or delve into
the disputed question of facts. The issues involving facts raised by the
petitioner by way of defence can be canvassed only by way of evidence
before the Trial Court and the same will have to be adjudicated on merits
of the case and not by way of invoking jurisdiction under Section 482
Cr.PC. at this stage.
20. In Rajiv Thapar & Ors. V. Madan Lal Kapoor, (2013) 3 SCC
330, it has been held by the Supreme Court as under:
"28. The High Court, in exercise of its jurisdiction under
Section 482 of the Cr.P.C., must make a just and rightful
WP(CRL.) 3417/2019 Page 9 of 13
choice. This is not a stage of evaluating the truthfulness or
otherwise of allegations levelled by the
prosecution/complainant against the accused. Likewise, it is
not a stage for determining how weighty the defences raised
on behalf of the accused is. Even if the accused is successful
in showing some suspicion or doubt, in the allegations
levelled by the prosecution/ complainant, it would be
impermissible to discharge the accused before trial. This is
so, because it would result in giving finality to the
accusations levelled by the prosecution/ complainant, without
allowing the prosecution or the complainant to adduce
evidence to substantiate the same. The converse is, however,
not true, because even if trial is proceeded with, the accused
is not subjected to any irreparable consequences. The accused
would still be in a position to succeed, by establishing his
defences by producing evidence in accordance with law.
There is an endless list of judgments rendered by this Court
declaring the legal position, that in a case where the
prosecution/ complainant has levelled allegations bringing
out all ingredients of the charge(s) levelled, and have placed
material before the Court, prima facie evidencing the
truthfulness of the allegations levelled, trial must be held.
29. The issue being examined in the instant case is the
jurisdiction of the High Court under Section 482 of the
Cr.P.C., if it chooses to quash the initiation of the prosecution
against an accused, at the stage of issuing process, or at the
stage of committal, or even at the stage of framing of
charges. These are all stages before the commencement of
the actual trial. The same parameters would naturally be
available for later stages as well. The power vested in the
High Court under Section 482 of the Cr.P.C., at the stages
referred to hereinabove, would have far reaching
consequences, in as much as, it would negate the
prosecution's/complainant's case without allowing the
prosecution/complainant to lead evidence. Such a
determination must always be rendered with caution, care
WP(CRL.) 3417/2019 Page 10 of 13
and circumspection. To invoke its inherent jurisdiction under
Section 482 of the Cr.P.C. the High Court has to be fully
satisfied, that the material produced by the accused is such,
that would lead to the conclusion, that his/their defence is
based on sound, reasonable, and indubitable facts; the
material produced is such, as would rule out and displace the
assertions contained in the charges levelled against the
accused; and the material produced is such, as would clearly
reject and overrule the veracity of the allegations contained in
the accusations levelled by the prosecution/complainant. It
should be sufficient to rule out, reject and discard the
accusations levelled by the prosecution/complainant, without
the necessity of recording any evidence. For this the material
relied upon by the defence should not have been refuted, or
alternatively, cannot be justifiably refuted, being material of
sterling and impeccable quality. The material relied upon by
the accused should be such, as would persuade a reasonable
person to dismiss and condemn the actual basis of the
accusations as false. In such a situation, the judicial
conscience of the High Court would persuade it to exercise
its power under Section 482 of the Cr.P.C. to quash such
criminal proceedings, for that would prevent abuse of process
of the court, and secure the ends of justice."
21. Upon analyzing the provisions of the NI Act, it is clear that
Section 138 of the Act spells out the ingredients of the offence as well as
the conditions required to be fulfilled before initiating the prosecution.
22. These ingredients and conditions are to be satisfied mainly on the
basis of documentary evidence, keeping in mind the presumptions under
Sections 118 and 139 of the NI Act and Section 27 of the General
Clauses Act, 1897 as well as the provisions of Section 146 of the Act.
23. The provisions of Sections 142 to 147 lay down a Special Code
for the trial of offences under the Chapter XVII of the N.I. Act. While
WP(CRL.) 3417/2019 Page 11 of 13
considering the scope and ambit of the amended provisions of the Act,
the Supreme Court in Mandvi Co. Op. Bank Ltd. v. Nimesh B. Thakore ,
AIR 2010 SC 1402, has held that the provisions of Sections 143, 144,
145 and 147 expressly depart from and override the provisions of the
Cr.PC, the main body of adjective law for criminal trials. The Supreme
Court has further held as under:-
"17. It is not difficult to see that sections 142 to 147 lay down a
kind of a special code for the trial of offences under Chapter
XVII of the Negotiable Instruments Act and sections 143 to
147 were inserted in the Act by the Negotiable Instruments
(Amendment and Miscellaneous Provisions) Act, 2002 to do
away with all the stages and processes in a regular criminal
trial that normally cause inordinate delay in its conclusion and
to make the trial procedure as expeditious as possible without
in any way compromising on the right of the accused for a fair
trial."
24. The parameters of the jurisdiction of the High Court, in exercising
jurisdiction under Section 482 Cr.PC, are now almost well-settled.
Although it has wide amplitude, but a great deal of caution is also
required in its exercise. The requirement is, the application of well
known legal principles involved in each and every matter. Adverting
back to the facts of the present case, this Court does not find any material
on record which can be stated to be of sterling and impeccable quality
warranting invocation of the jurisdiction of this Court under Section 482
Cr.PC at this stage. More so, the defence as raised by the petitioner in the
petition requires oral as well as documentary evidence, which cannot be
appreciated, evaluated or adjudged in the proceedings under Section 482
of Cr.PC.
WP(CRL.) 3417/2019 Page 12 of 13
25. Accordingly, I find no flaw or infirmity in the proceedings
pending before the Trial Court. However, the Trial Court shall certainly
consider and deal with the contentions and the defence of the petitioner
in accordance with law.
26. The prayers are untenable in law. Accordingly, the petition is
dismissed and CRL. M.A. 42101/2019 is also disposed of accordingly.
RAJNISH BHATNAGAR, J.
DECEMBER 06, 2019 Sumant WP(CRL.) 3417/2019 Page 13 of 13