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Present: Mr. K S Nalwa Advocate Vs. Amit Paul and Others ........ Petitioners - Court Judgment

LegalCrystal Citation
CourtPunjab and Haryana High Court
Decided On
AppellantPresent: Mr. K S Nalwa Advocate
RespondentAmit Paul and Others ........ Petitioners
Excerpt:
.....raised specific averments in the complaint in regard to territorial jurisdiction of the court at faridabad. counsel has argued that plea of the petitioners with respect to non-compliance of the provisions of section 202 cr.p.c.is untenable. to bring home her contention, counsel argues that before issuance of process to bimbra mohan lal 2013.09.11 13:22 i attest to the accuracy and integrity of this document chandigarh crl. misc. not m 253.of 2012 (o&m) 5 the petitioners.the judicial magistrate examined the complainant, heard arguments and considered the documents produced on record. to refute the contention of the petitioners with regard to factual controvers.raised in regard to cheque no.890458, it is submitted that the disputed question of facts cannot be adjudicated in proceedings.....
Judgment:

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not M 253.of 2012 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH -.- Crl.

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not M 253.of 2012 (O&M) Date of decision:

22. 08.2013 Amit Paul and others .......Petitioners Versus M/s Alchem International Limited .......Respondent Coram: Hon'ble MRS.Justice Rekha Mittal -.- Present: Mr.K S Nalwa, Advocate for the petitioners Ms Tanu Bedi, Advocate for the respondent -.- 1.

Whether Reporters of local papers may be allowed to see the judgment?.”

2. To be referred to the Reporter or not?.”

3. Whether the judgment should be reported in the Digest?.

Rekha Mittal, J.

The petitioneRs.by way of present petition filed under Section 482 of Code of Criminal Procedure (hereinafter to be referred as 'the Code') pray for quashing of criminal complaint captioned ‘M/s Alchem International Limited v.

M/s G.K.Enterprises and others’ (Annexure P11) under Section 138 read with Section 142 of the Negotiable Instruments Act, 1881 (for short, ‘the Act’) read with Section 420 of Indian Penal Code (for short, ‘IPC’) and summoning order dated 29.08.2009 (Annexure P12).passed by the Judicial Magistrate Ist Class, Faridabad and proceedings emanating therefrom.

The facts relevant for the disposal of the present petition are Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 2 that M/s Alchem International Limited (respondent herein) filed a complaint on the allegations that M/s G K Enterprises, a partnership concern of Amit Paul and Sumitra Paul was appointed as Super Stockiest by the complainant company, vide agreement dated 14.09.2006.

The complainant company supplied goods worth Rs.1,49,24,255/-.

The accused had been making payment against the goods supplied through payee’s account cheques and a sum of Rs.1,23,12,817/- had been paid by the accused.

The accused issued cheque bearing No.890458 dated 10.06.2009, for a sum of Rs.3,00,000/- and another cheque bearing No.507580 dated 10.06.2009 for a sum of Rs.12,91,345.00 in discharge of their liability against the goods received.

The cheques on presentation to the Bank got dishonoured with the remarks ‘payment stopped by the drawer’ vide return memo dated 26.06.2009.

The accused failed to make payment, despite notice dated 04.07.2009.

The petitioners have prayed for quashing of the criminal proceedings, primarily on three counts:- i) The Court at Faridabad does not have jurisdiction to take cognizance of the offence; ii) The Judicial Magistrate has failed to comply with the mandatory requirements of Section 202 Cr.P.C., as the petitioners are residents of Kolkata, outside the jurisdiction of the Court at Faridabad; and iii) The petitioners had issued new cheques in lieu of cheque No.890458 and the payment of the substituted cheques already realized by the complainant company.

Counsel for the petitioners argues that Hon’ble the Supreme Court of India in ‘K.

Bhaskaran v.

Sankaran Vaidhyan Balan’, (1999) 7 SCC 510.held that offence under Section 138 of the Act can be completed Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 3 only with the concatenation of a number of acts, namely, (1) drawing of the cheque; (2) presentation of the cheque to the bank; (3) returning the cheque unpaid by the drawee bank; (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount; and (5) failure of the drawer to make payment within 15 days of the receipt of the notice.

It was further held that if five different acts were done in five different localities, any one of the courts exercising jurisdiction in one of the five local areas can become the place of trial for the offence under section 138 of the Act.

However, Hon’ble the Supreme Court, in a later judgment in ‘Harman Electronics Private Limited and another v.

National Panasonic India Private Limited, (2009) 1 SCC 72.has laid down that issuance of notice calling upon the drawee of the cheque to make payment within the stipulated period of 15 days in compliance of Section 138 of the Act, does not give rise to a cause of action and the cause of action accrues only on receipt of notice by the payee.

It is argued by counsel that as none of the fiRs.three acts aforesaid took place at Faridabad and giving of notice to the drawee of the cheque demanding payment of cheque amount from Faridabad does not give a cause of action to file a complaint, the Court at Faridabad does not have jurisdiction to entertain and try the offence under section 138 of the Act.

Another submission made by counsel is that the Judicial Magistrate Faridabad, did not conduct an inquiry in compliance with the provisions of Section 202 of the Code, summoned the petitioners as accused, admittedly, residing outside the local jurisdiction of the Court at Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 4 Faridabad, the summoning order is in clear breach of mandatory requirements of Section 202 of the Code and thus liable to be quashed.

For this purpose, counsel has relied upon ‘S.K.Bhowmik v.

S.K.Arora’, 2007(4) R.C.R.(Criminal) 650, ‘M/s Bharat Trading Company and others v.

State of Haryana and another’ (CRM M 3204.of 2010, decided on 01.11.2010).‘Smt.

Neeta Sinha v.

P S Raj Steel Private Limited’, 2010(3) R.C.R.(Criminal) 509, ‘Savera Sidhu v.

Harleen Sidhu and another’, 2011(2) RCR (Criminal) 442 and’ Shivjee Singh v.

Nagendra Tiwary and others’, 2010(3) Criminal Court Cases 580 (SC).Counsel further argues that in lieu of cheque No.890458, the petitioners issued cheques referred to in letter dated 18.12.2008 (Annexure P3).It is argued with vehemence that as the complainant had already encahsed the cheques issued in lieu of cheque in question, namely, cheque No.890458, the complainant was neither competent to present this cheque in June 2009 not can maintain criminal proceedings in regard to dishonour thereof.

Counsel for the respondent, on the contrary, argues that the petitioners have not challenged jurisdiction of the Court at Faridabad.

It is argued that territorial jurisdiction of a Court is a question of fact and law and as the petitioners did not raise this issue in the petition, the respondent is deprived to counter the claim of the petitioner.

However, it is submitted that the respondent/complainant has raised specific averments in the complaint in regard to territorial jurisdiction of the Court at Faridabad.

Counsel has argued that plea of the petitioners with respect to non-compliance of the provisions of Section 202 Cr.P.C.is untenable.

To bring home her contention, counsel argues that before issuance of process to Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 5 the petitioneRs.the Judicial Magistrate examined the complainant, heard arguments and considered the documents produced on record.

To refute the contention of the petitioners with regard to factual controveRs.raised in regard to cheque No.890458, it is submitted that the disputed question of facts cannot be adjudicated in proceedings under Section 482 Cr.P.C.Further dilating, counsel argues that the petitioners never requested the respondent not to present cheque No.890458 either through letter Annexure P3 or otherwise.

It is further contended that there are continuous transactions between the parties with regard to supply of goods and payment in lieu thereof and at present also, the respondent is in possession of several cheques issued by the petitioneRs.in discharge of their liability.

In the last, counsel argues that one of the cheques, sent through annexure P3 also got dishonoured on its presentation to the Bank, which falsifies and belies the claim of the petitioners that the petitioners have already discharged their liability qua cheque No.890458.

I have heard counsel for the parties and perused the records.

Indisputably, the petitioners have not raised the plea that the Court at Faridabad lacks jurisdiction to entertain and try the offence, a mixed question of fact and law.

A perusal of the complaint reveals that para 7 contains averments with regard to territorial jurisdiction of Court at Faridabad.

A relevant extract from para 7 reads as follows:- “7.

That the goods were supplied from Faridabad as per the terms of the agreement dated 14th Sept, 2006.

Both the cheques were received at Faridabad.

The Bimbra Mohan Lal cheques were presented by the complainant company 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 6 through their bank at Faridabad.

The information for stoppage of payment was received by the complainant company at Faridabad.

Therefore, the offence has been committed by all the three accused and they are liable to be prosecuted at Faridabad.”

Nodoubt, the respondent has not placed on record any document that the cheques were presented by the complainant Company through their Bank at Faridabad, but it is a question of evidence to be led on record.

As has been noticed earlier, the petitioners have not raised any issue qua jurisdiction of Court at Faridabad, thereby depriving the respondent to file their proper response to counter the plea of the petitioners .

Counsel for the petitioners has not disputed that the agreement for supply of material was executed between the parties at Faridabad; goods were supplied to the petitioners from Faridabad; notice raising demand for payment of the cheque amount was issued from Faridabad; reply to the notice by the petitioners was sent at Faridabad and the respondent/ complainant has got no branch office, carrying on business at Kolkata.

In 'Smt.

Shamshad Begum v.

B Mohammed' (CRA No.1715 of 2008, decided on 03.11.2008).Hon’ble the Supreme Court of India while referring to 'K.Bhaskaran's case (supra).has affirmed the judgment of the Karnataka High Court by holding that the Mangalore Court has jurisdiction to try the case as the notice in writing to the drawer of the cheque demanding payment of the cheque amount was sent from Mangalore.

In the said case, all other acts i.e.drawing of the cheque, presentation of the cheque to the bank, return of the cheque unpaid took place at Bangalore.

With due regards to the observations made by the Hon’ble Apex Court in 'Harman Electronics Private Limited’s case (supra).the judgment in Smt.

Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 7 'Shamshad Begum’s case (supra) has not been referred much less distinguished while deciding 'Harman Electronics Private Limited's case (Supra).Keeping in view the facts and circumstances of the present case, I find myself unable to be persuaded with the submissions of counsel for the petitioners that the Court at Faridabad has no jurisdiction to take cognizance of the offence.

The second submission made by counsel with regard to non- compliance of Section 202 of the Code also merits rejection.

At the outset, it is pointed out that this issue is no longer res integra, thus, needs no debate for its decision.

The scope of inquiry under section 202 of the Code, has been discussed in detail by this Court in CRM M 1525.of 2010, wherein a reference has also been made to the decision in S K Bhowmik’s case (supra).This Court, on a detailed consideration of amendment made in Section 202 of the Code with effect from the year 2006, has recorded its conclusion that examination of the complainant, witnesses produced to support and corroborate version of the complainant and documents exhibited during evidence are a substantial compliance with the requirements of conducting an inquiry by the Court before issuing of process, in cases, where the accused resides outside the jurisdiction of the court concerned.

This apart, the need to hold an inquiry envisaged under Section 202 of the Code in a case under section 138 of the 1881 Act, has been dealt in Goenka Tradelinks PVT.Limited and Apex Health Care Private Limited and others (supra).wherein, after reference to the decision of Hon’ble the Supreme Court in 'K Bhaskaran's case (supra) and 'Harman Electronics Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 8 Private Limited's case (supra).has been held as quoted herein below:- “27.

Taking into consideration the nature of the proceedings under Section 138 of the Act and the law laid down in K.

Bhaskaran’s case (supra) that the complainant can choose any one of the couRs.having jurisdiction over any one of the local areas in which any one of the five acts i.e.drawing of the cheque; presentation of the cheque to the bank; returning the cheque unpaid by the drawee bank; giving notice in writing to the drawer of the cheque demanding payment of the cheque amount; and failure of the drawer to make payment within 15 days of the receipt of the notice, the provisions of Section 202 Cr.P.C.cannot be said to be applicable in proceedings under Section 138 of the Act, otherwise it would defeat the objectives of the provisions of Section 138 of the Act.

However, a Magistrate exercising powers under Section 138 of the Act can himself, while appreciating the preliminary evidence, hold an enquiry for his satisfaction regarding the prima facie commission of offence under Section 138 of the Act when the respondent/ accused is resident of different locality, keeping in mind that the list of the accused has not been unnecessarily enlarged with an oblique motive to cause harassment to the accused described as residents of distant areas but holding of an enquiry by police in every case under Section 138 of the Act under Section 202 Cr.P.C.is not the rule of law.

It is not out of place to mention here that the judgment in K.Bhaskaran’s case (supra) still holds the field despite a little variance in one of the five circumstances in the recent judgment by the Hon’ble Supreme Court in Harman Electronics Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 9 Private Limited and another Vs National Panasonic India Private Limited, (2009) 1 SCC 720.in which it was held that the single factor of issuance of notice under Section 138 (b) of the Act will not ipso facto tantamount to conferring a jurisdiction on the Courts of the area from where only notice has been issued.

Besides this, the judgment in S.K.Bhowmik’s case (supra) did not deal with a case constituting of non-cognizable offences particularly offence under Section 138 of the Act.

It is held that in the light of the judgment of K.Bhaskaran’s case (supra).the ratio of the judgment of S.K.Bhowmik’s case (supra) is not applicable in the complaint under Section 138 of the Act and the summoning order in complaint under Section 138 of the Act cannot be questioned solely on the ground of violation of provisions of section 202 Cr.P.C.”

Counsel for the petitioners has failed to cite any contrary law laid down by a larger bench of this Court or the Hon'ble Supreme Court.

However, before parting with the decision on this issue, it is necessary to point out that Section 138 of the 1881 Act was introduced by way of an amendment effective from 01.04.1989.

These provisions were introduced with a view to encourage the culture of use of cheques and enhancing the credibility of the instruments.

The legislature intended to inculcate faith in the efficacy of banking operations and use of negotiable instruments in business transactions.

The penal provision is meant to discourage people from not honouring their commitments by way of payment through cheques.

Therefore, the laudable object to prevent bouncing of cheques and sustaining credibility of commercial transactions Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 10 resulting in enactment of Sections 138 and 141 of the 1881 Act are to be kept in mind while deciding the question of quashing for want of some procedural lapse.

In this view of the matter, the challenge of the petitioner to the proceedings for want of compliance with the provisions of Sections 202 of the Code, is no more sustainable and accordingly rejected.

A similar matter came up for consideration before Hon'ble the Supreme Court in 'National Bank of Oman v.

Barakara Abdul Aziz and another', (2013) 2 SCC 488.and Hon'ble Court, in para 6 of the judgment, held as quoted hereinbelow:- “The duty of a Magistrate receiving a complaint is set out in Section 202 of the Cr.P.C.and there is an obligation on the Magistrate to find out if there is any matter which calls for investigation by a criminal court.

The scope of enquiry under this Section is restricted only to find out the truth or otherwise of the allegations made in the complaint in order to determine whether process has to be issued or not.

Investigation under Section 202 of the Cr.P.C.is different from the investigation contemplated in Section 156 as it is only for holding the Magistrate to decide whether or not there is sufficient grounds for him to proceed further.

The scope of enquiry under Section 202 of the Cr.P.C.is, therefore, limited to the ascertainment of truth or falsehood of the allegations made in the complaint – (i) on the materials placed by the complainant before the Court (ii) for the limited purpose of finding out whether a prima facie case for issue of process has been made our; and (iii) for deciding the question purely from the point of view of the complainant without at all adverting to any defence Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 11 that the accused may have.”

This apart, under Section 118 of the Act, a presumption is available in favour of the holder of cheque that it is issued for consideration.

Section 139 of the Act raises a presumption in favour of the holder of the cheque.

A relevant extract from Section 139 of the Act, reads thus:- “139.

Presumption in favour of holder.

It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.”

The complainant stepped into the witness box, reiterated his case, exhibited documents relied upon.

The trial Court, on appraisal of averments set up in the complaint when examined in the light of oral and documentary evidence adduced in preliminary evidence came to conclusion that there are sufficient grounds to proceed against the petitioneRs.The procedure followed by the trial Court cannot be faulted with to accept the contention of the petitioners that the trial Court did not conduct inquiry in compliance with the requirements of Section 202 Cr.P.C or the process against the petitioners was issued without necessary compliance.

Counsel for the petitioners has raised a factual controveRs.with regard to liability of the petitioners qua cheque bearing No.890458.

Undoubtedly, the disputed questions of fact are not amenable to adjudication in proceedings under Section 482 Cr.P.C.Counsel for the respondent though did not deny issuance of cheques mentioned in Annexure P3, but one of the cheques statedly got dishonoured on its presentation.

A perusal of letter Annexure P3 otherwise does not reveal the value of those cheques purported to be issued in lieu of cheque No.890458.

In this view Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh Crl.

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not M 253.of 2012 (O&M) 12 matter, I do not find any merit in the contention of the petitioners that the proceedings are liable to be quashed as the petitioners have already discharged their liability qua cheque No.890458.

In view of what has been discussed herein above, finding no merit, the petition is dismissed.

(Rekha Mittal) Judge 22.08.2013 mohan Bimbra Mohan Lal 2013.09.11 13:22 I attest to the accuracy and integrity of this document Chandigarh


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