2015 (3) TMI 1386 - SC - Indian Laws

Dishonor of Cheque - insufficiency of funds - It is alleged by the present Respondent (accused) in the petition that Balakrishnan, instead of getting the mortgage deed executed, obtained an agreement of sale from aforesaid two persons with false and incorrect recitals - HELD THAT - The defence of the Respondent (accused) before the High Court, in the petition filed Under Section 482 of the Code, is nothing but absolutely factual in nature, which is neither admitted by the complainant, nor apparent on the face of the record. Such type of disputed factual defences could have been appreciated only by the trial court, after the parties led their evidence. The High Court committed grave error of law in examining the allegations and counter allegations which are disputed and factual in nature in a proceeding Under Section 482 of the Code. There are no option but to set aside the order passed by the High Court as it has entered into highly disputed questions of fact and concluded that the material before it was sufficient to cause reasonable suspicion in the case of the complainant. That is not the ground on which powers Under Section 482 of the Code can be exercised by the High Court - appeal allowed.

Summary

Issues:
Appeal against quashing of criminal proceedings under Section 138 of Negotiable Instruments Act, 1881 by High Court exercising powers under Section 482 of the Code of Criminal Procedure, 1973.

Analysis:
The case involved an appeal against the order of the High Court quashing criminal proceedings initiated against the Respondent for an offence under Section 138 of the Negotiable Instruments Act, 1881. The Respondent had borrowed a sum of money and issued a post-dated cheque for repayment, which bounced due to insufficient funds. The Appellant demanded payment through a notice, but the Respondent replied falsely alleging that the loan was taken by her father and son-in-law. The Respondent challenged the criminal complaint by stating that the cheques were taken as security for a different transaction involving her son-in-law and father. The High Court quashed the proceedings based on disputed factual defenses, which the Supreme Court found to be an error. The Supreme Court cited the scope of Section 482 of the Code, emphasizing that the power to quash proceedings is limited to cases where the complaint is frivolous, vexatious, or does not disclose any offense. The Court set aside the High Court's order, reviving the criminal complaint for further proceedings before the trial court.

This judgment highlights the importance of not delving into disputed factual defenses at the stage of quashing proceedings under Section 482 of the Code. The Court emphasized that such defenses should be examined during trial, rather than in a proceeding to quash criminal proceedings. The judgment also reiterates the limited scope of the High Court's power under Section 482, emphasizing that it should only be exercised in cases where the complaint lacks merit or is frivolous. By setting aside the High Court's order and reviving the criminal complaint, the Supreme Court ensured that the trial court would have the opportunity to evaluate the disputed factual contentions and reach a decision based on evidence presented by both parties.