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Biswanath Agarwalla and ors. Vs. the State - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Reported in1976CriLJ1901
AppellantBiswanath Agarwalla and ors.
RespondentThe State
Cases ReferredWest Bengal v. Mohan Singh
- a matter for judicial determination. it was also held that the high court in exercise of its inherent power can examine whether there is legal evidence justifying the conclusion of the lower court.6. mr. ghosh stated that the facts and circumstances in this case did not warrant a charge under section 420. the parties had transaction over a long time. in fact documents including bank statements would show that these started since 1949 and there was annual turnover of more than two lakhs for many years. in that background, dishonour of two cheques for amounts aggregating to little over rs. 3000/- could not be said to have amounted to cheating. he led considerable emphasis on the fact that the cheques were postdated ones. he emphasised that delivery of goods on credit and on the basis.....

Sudhamay Basu, J.

1. This Rule relates to an order dated the 22nd of July, 1974 passed by the Metropolitan Magistrate, 3rd Court, Calcutta whereby the learned Magistrate framed charges in case No. G. R. 521 of 1973 under Section 420, I.P.C. and Section 420/109, 'I.P.C. against' the petitioners.

2. The prosecution case is that during November, 1970 to February, 1971 the petitioners representing Calcutta Cycle Importing Company of 80-D, Bentinck Street, Calcutta had numerous transactions with T. I. and M. Sales Limited in respect of cycles components and other accessories. In course of the transaction goods were supplied to the petitioners against cheques. The goods were sent from Madras to the Branch office of the T. I. and M. Sales Limited, hereafter referred to as the complainant company. The delivery orders were handed over to the petitioners against cheques with instruction to present the cheque for encashment at a future date. In course of the aforesaid transaction some cheques were encashed but many others were dishonoured. The complainant company pressed for payment of the outstanding cheques and declined to make over further goods. Thereupon the petitioner, Promode Kumar Agarwalla, in March, 1971 entreated the complainant company's agent to allow him a little further time and assured full payment of the outstanding cheques. On his assurance that cheques would be fully honoured if deposited after the 30th of April, 1971 and on his representation, further delivery orders of the goods were made over to the petitioners on 16th of March, 1971 and 26th of March, 1971 against receipt of two cheques, both dated the 30th of April, 1971 for Rupees 1816.40 and Rs. 1413.30 respectively which were signed by Sri Biswanath Agarwalla. The cheques were presented on the 4th of May, 1971 for encashment but were dishonoured.

3. It appears that endeavours were made by the complainant to contact the firm of the petitioners but it was found that the business of Calcutta Cycle Importing Company at 80-D, Bentinck Street, Calcutta was closed and all stocks removed.

4. Under the circumstances one A. Stephens, as the Regional Sales Manager of T. I. and M. Sales Limited filed a complaint on 31-5-1971 before the then Chief Presidency Magistrate, Calcutta against the petitioners. On the said 31st of May, 1971 the learned Chief Presidency Magistrate directed D.C.D.D. to take cognisance and investigate the case. On the 6th of September, 1971 the petitioners surrendered before the Court and were released on bail. On 31st of May, 1973 the police submitted charge-sheet against the petitioners under Section 120-B read with Section 420, I.P.C. On the 22nd of July, 1974 the learned Metropolitan Magistrate, 3rd Court, after hearing the parties and perusing the documents as referred to under Section 173, Cr. P.C. framed charges under Section 420 against the petitioner. Promode Kumar Agarwalla and charges under Section 420 read with Section 109, I.P.C. against the petitioner Biswanath Agarwalla. The said order is challenged by the petitioners.

5. Mr. Prasun Ghose, learned Advocate in support of the Rule submitted that the materials on record were not sufficient to maintain the charges. Relying on the case of Sree Ram v. The State of Maharashtra reported in : [1961]2SCR890 , Mr. Ghose stated that the discretion of the Magistrate in framing charges was a judicial discretion and was liable to be set aside by a superior court. Although the aforesaid case of the Supreme Court was decided under Section 207(a) in a proceedings instituted on a police report the same, he submitted, also applied to the order of a Magistrate made under Section 251-A. Mr. Ghosh also referred to the case of Rajendra Nath v. The Deputy Superintendent of Police, Purulia reported in : 1972CriLJ268 in which it was held that the issue of process is a matter for judicial determination. It was also held that the High Court in exercise of its inherent power can examine whether there is legal evidence justifying the conclusion of the lower court.

6. Mr. Ghosh stated that the facts and circumstances in this case did not warrant a charge under Section 420. The parties had transaction over a long time. In fact documents including Bank statements would show that these started since 1949 and there was annual turnover of more than two lakhs for many years. In that background, dishonour of two cheques for amounts aggregating to little over Rs. 3000/- could not be said to have amounted to cheating. He led considerable emphasis on the fact that the cheques were postdated ones. He emphasised that delivery of goods on credit and on the basis of post-dated cheques could not amount to cheating within the meaning of Section 420, Indian Penal Code. He relied on the case of H. K. Shaw v. Emperor reported in (1935) 39 Cal WN 1182. In that case the complainant firm sent a bill dated the 1st of July, 1934. No payment was made on the 2nd of July, 1934. An assistant of the firm met the accused and pressed him for payment. The accused then gave cheque for the amount of the bill and the same was receipted with a revenue stamp under the signature of the assistant. The cheque which was dated the 3rd of July, 1934, was dishonoured on the 4th of July. The complainant firm sent another representation to receive the payment of the bill, but no payment was made. It was held that a person paying a bill by a cheque, of-date or post-dated, and obtaining the bill receipted as by the cheque, cannot be charged under Section 420, Indian Penal Code on the cheque being dishonoured inasmuch as he does not induce the delivery of any property or the making of any valuable security. It was observed that a cheque was only a promise to pay either on demand or upon the date to which it has been post-dated. Therefore, the only effect of the receipt was an acknowledgment that a promise to pay has been given by means of the cheque. In R. S. Ratra v. Ganesh, reported in AIR 1940 Lah 93 : 41 Cri LJ 394 giving of a post-dated cheque in lieu of money due with the knowledge that the drawer had no funds in the Bank was held not to amount to cheating in the absence of evidence to show that the payee parted with any property or deed or omitted to do anything which he would not have done or omitted to do if he had known that the cheques would be dishonoured. It was held that the remedy lay in a civil court. Another case strongly relied on was Chidambaram Chettiar v. Shanmugham Pillai reported in AIR 1938 Mad 129 : 39 Cri LJ 261. It was held that a post-dated cheque in payment of goods already received is a' mere promise to pay on a future date and a broken promise is not a criminal offence. Cheating is both deception and dishonest inducement to do or omit to do something. Mere deception is not a Criminal offence. It was further held in that case that not every immoral act was criminal. It is an abuse of the process of Court to attempt to create new crime in order to compel men to conform to the high standards of probity in business dealings or to force them to execute their promises. Mr. Ghosh then relied on the case of Mahadeo Pro-sad v. The State of West Bengal reported in : AIR1954SC724 for the proposition that where the change against the accused is under Section 420 in that he induced the complainant to part with the goods, on the understanding that the accused would pay for the same on delivery but he did not pay, if the accused had at the time he promised to pay cash against delivery an intention to do so, the fact that he did not pay would not convert the transaction into one of cheating. The same case also held that if on the other hand he had no intention whatsoever to pay but merely said that he would do so in order to induce the complainant to part with the goods then a case of cheating would be established.

7. The crux of the matter is does the failure to provide funds for the cheque amount to a mere breach of promise giving rise to a civil liability or does it constitute an offence under Section 420, Indian Penal Code An intention of the drawer seems to be an important factor in deciding the question. Mr. Ghosh laid stress on the large volume of business between the parties existing over years. That, however, is only the background. The learned Magistrate did not take into consideration dishonour of many cheques given against delivery. He considered the issue of the two cheques dated the 30th April, 1971, under the circumstances of the case as inducement to supply the goods. On an analysis of the facts and circumstances it would appear that this is not a case of attempting to wipe out the existing liability by post-dated cheque. The learned Magistrate looked upon the two cheques as being issued against delivery of goods with assurance . that these would be honoured on due date end in due course. But for the assurance that the cheque would be honoured on due date the complainant would not deliver the goods. If the learned Magistrate took that view of the matter we cannot say at this stage that he had no reason to frame the charges as he did. We, therefore, do not see any merit on the application.

8. There is, yet another hurdle in the way of Mr. Ghosh. Section 397 Sub-section (2) of the new Criminal Procedure Code specifically provides that the power of revision shall not be exercised in relation to any interlocutory order. An interlocutory order has not been defined. No single general test for finality can be laid down as final or interlocutory nature of order has to be considered in relation to the particular purpose for which it is required. The criterion for determination of whether an order in criminal proceedings is final is not different from that in a civil proceeding. That was settled long ago in the case of Kuppuswami v. The King reported in AIR 1949 FC 1 : 49 Cri LJ 625 and reiterated in Mohan Lal v. The State of Gujarat reported in : 1968CriLJ876 . In the latter case it: was recognised that a judgment or order may be final for one purpose and interlocutory for another or final as to part and interlocutory as to part. However, generally speaking a judgment or order which determines the principal matter in question is termed final. Shelat, J., noted some English decisions where four tests were applied to determine the question; (1) Was the order made upon an application such that a decision in favour of either party would determine the main dispute (2) Was it made upon an application upon which the main dispute could have been decided '? (3) Does the order as made determine the dispute (4) If the order in question is reversed would the action have to go on Justice Bachawat, while delivering a separate judgment noted that in a civil proceedings the order is final if it finally decides the rights of the parties. If it does not decide the rights of the parties the order is interlocutory though it conclusively determines some subordinate matter and disposes of the proceedings in which the subordinate matter is in controversy. He relied on AIR 1920 PC 86 (Firm Ramchand Manjimal v. Firm G.V. Ratanchand), Generally speaking, as Osborne puts it in Concise Law Dictionary 5th Edition, page 172 while an order determines the rights of the parties the interlocutory order leaves something further to be done to determine those rights. Wharton's law Dictionary (14th Edition) states that an interlocutory order or judgment is one made or given during the progress of an action but which does not finally dispose of the rights of the parties. Mr. Ghosh also conceded fairly that an order which did not generally speaking finally set the controversy at rest and kept the action alive is not final. Framing of charge after all is nothing but written formulation of specific accusations made with certainty and communicated to the accused so that he may defend himself. Formulation of the charge, therefore, cannot in any view of the matter be said to finally determine the matter in issue. The controversy between the parties is hardly set at rest. In that view of the matter we have no doubt that framing of charge is an interlocutory order.

9. Mr. Ghosh further argued that even if it is an interlocutory order the Courts inherent power under Section 482 of the Criminal Procedure Code should be invoked in this regard. It is not circumscribed by the provisions of Section 397(2). He cited several cases of the Supreme Court. In the case of Krishnamurty Iyer v. The State of Madras, reported in : AIR1954SC406 the Supreme Court on the facts of that case held that the High Court was justified in quashing the charges in the exercise of its inherent power even before the conclusion of the trial. It was however, held that further trial in the circumstances of the case would not advance the cause of justice and hence the order of the High Court directing the trial was quashed. In the case of R. P. Kapoor v. The State of Punjab reported in : 1960CriLJ1239 the Supreme Court was of the view that the inherent jurisdiction of the High Court could be exercised to quash the proceedings in appropriate case either to prevent the abuse of the process of any Court or otherwise to secure the ends of justice. It was not possible, desirable or expedient to lay down any inflexible rule which would govern the exercise of this inherent jurisdiction. Some of the categories of the cases where inherent jurisdiction to quash proceedings should be exercised were given. At the same time it was emphasised that the inherent power of the High Court under Section 561-A, Criminal Procedure Code (old) cannot be exercised in regard to the matters specifically covered by the other provisions of the Code. In the case of Delhi Development Authority v. Lila Bhagat reported in : AIR1975SC495 it was held by the Supreme Court 'that in an appropriate case it may be permissible to protect person from illegal vexatious prosecution by granting appropriate rule or in exercise of the inherent or revisional powers of the High Court. In the case of Superintendent and Remembrancer, West Bengal v. Mohan Singh reported in : 1975CriLJ812 it was observed by the Supreme Court that Section 561-A preserves the inherent power of the High Court to make such orders as it deems fit to prevent the abuse of the process of the Court or to secure the ends of justice. The aforesaid cases, no doubt, showed that in appropriate cases the High Court can interfere with matters like the framing of the charges under its revisional or inherent powers but those cases were decided on the basis of the Old Criminal Procedure Code of 1898. In the old code there was no bar to the exercise of revisional powers in case of interlocutory order. The imposition of the bar changes the context of use of inherent power of the Court in this respect. It is the inadequacy inherent in the Code which fails to provide for all contingencies which has called for the creation of and saving the inherent power of the Court to act ex debito justitiae. The same also explains why this inherent power is not to be exercised in matters specially covered by the other provisions of the Code'. If such is the nature of the power should it be exercised in fields such as interlocutory orders which have been forbidden for the use of revisional powers by the Court Section 397(2) is a bar which apparently fetters the revisional powers of the Court only. There is nothing in Section 482, Criminal Procedure Code that it is to be read subject to Section 397(2). But even then should the Court, when it is unable to exercise its revisional powers in case of interlocutory orders, take recourse to its inherent powers in that field Indiscriminate or frequent use of the inherent powers in that fashion would obviously render nugatory the bar put by Section 397(2). It would be doing indirectly what the Court is directly forbidden to do under Section 397(2). While we would not like to fetter or circumscribe the ambit of the inherent powers of this Court which is a mighty reservoir to be drawn upon by the litigants in cases where the channels of other legal remedies under the Code are dried up, at the same time it would be inadvisable to expand its ambit possibly except in rare cases to spheres specifically sought to be excluded by the Code. It would be risky to attempt formulations of principles to be followed in this regard. Circumstances may arise where a failure to exercise the inherent powers in case of interlocutory orders may occasion great hardship. To inhibit or carve or deny the Court's power to provide remedies on such occasion may cause injustice for the removal of which alone the Court exists. Supposing an order is purported to be passed, for example, by a Sessions Court erroneously in exercise of its revisional powers in an interlocutory order (which would be a nullity) should this Court refrain from quashing that illegality

10. The result is that the application fails not only on grounds of merit but also because it is an application which seeks to invoke this Court's revisional powers on an interlocutory order. As to the larger question whether the Court should in a case involving an interlocutory order invoke its inherent powers at all we have discussed some aspect of the matter as the point was raised in this case. But we make it clear that exercise of the inherent powers is not called for in this case. The Rule is discharged.

P.K. Chanda, J.

11. I agree.

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