2019 (5) TMI 1876 - HC - Indian Laws

Dishonor of Cheque - false and fabricated facts - illegal misuse of two blank cheques and he has filled up the amount from the account of the father of the applicant - section 138 of NI Act - HELD THAT - It is settled law that for considering the petition under Section 482 of the Code, it is necessary to consider as to whether the allegations in the complaint prima facie make out a case or not and the Court is not to scrutinize the allegations for the purpose of deciding whether such allegations are likely to be upheld in trial. It is also well settled that though the High Court possesses inherent powers under Section 482 of the Code, these powers are meant to do real and substantial justice, for the administration of which alone it exists or to prevent abuse of the process of the court - The High Court would be justified in exercising the said power when it is imperative to exercise the same in order to prevent injustice. The High Court, in the exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure, is required to examine whether the averments in the complaint constitute the ingredients necessary for an offence alleged under the Penal Code - Though the law does not require that the complaint reproduce the legal ingredients of the offence verbatim, the complaint must contain the basic facts necessary for making out an offence under the Penal Code. The applicant herein has heavily relied on the bank statement and passbook of his own account. However, whatever factual questions raised by the applicant are in a nature of defence to the complaint under Section 138(a) of the Negotiable Instruments Act. This is a case wherein the disputed questions of fact are involved. Under these circumstances, when there is disputed question of fact is involved and there is prima facie material showing that the cheques were issued by the accused to the complainant with his signature and there was monetary transaction between them, then in such case, inherent powers under Section 482 of the Code of Criminal Procedure cannot be exercised. It is clearly found that the applicant and his father issued different cheques to the complainant and accordingly, the complainant lodged different complaints and he has also initiated civil proceedings. This shows that there is prima facie liability of payment on the part of the applicant - Application dismissed.

Summary

Issues Involved:
1. Quashing of complaint under Section 138 of the Negotiable Instruments Act.
2. Allegations of cheque misuse and material alteration.
3. Existence of legally enforceable debt or liability.
4. Disputed questions of fact and evidence.
5. Applicability of Section 482 of the Code of Criminal Procedure.

Issue-wise Detailed Analysis:

1. Quashing of complaint under Section 138 of the Negotiable Instruments Act:
The applicant sought to quash the complaint filed under Section 138 of the N.I. Act, arguing that the complaint was based on false and fabricated facts and constituted an abuse of the legal process. The applicant contended that the cheque in question was issued in the name of 'Sai Catering Service,' and the complainant lacked documentary evidence to prove ownership of the firm, thus lacking the locus standi to file the complaint. The court, however, found that the allegations in the complaint prima facie made out a case under Section 138 of the N.I. Act, as the complainant had issued a notice stating he was the proprietor of the firm.

2. Allegations of cheque misuse and material alteration:
The applicant argued that the cheques were blank and issued as security, with material alterations made by the complainant, rendering them void under Section 87 of the N.I. Act. The court noted that these factual disputes, including the claim of blank cheques and material alterations, needed to be proved or disproved through evidence during the trial. The court emphasized that such disputed questions of fact could not be resolved in a petition under Section 482 of the Code of Criminal Procedure.

3. Existence of legally enforceable debt or liability:
The applicant contended that there was no legally enforceable debt or liability, as the cheques were issued as security and not against any existing debt. The court referred to precedents, including the case of Indus Airways Pvt. Ltd. v. Magnum Aviation Pvt. Ltd., which clarified that for an offence under Section 138, there must be a legally enforceable debt or liability subsisting on the date of the cheque's issuance. The court found that there was prima facie evidence of a monetary transaction and liability, as the cheques were issued by the applicant and his father, and the complainant had initiated civil proceedings as well.

4. Disputed questions of fact and evidence:
The applicant raised several factual defenses, including repayment of the amount and issuance of blank cheques. The court held that these were disputed questions of fact that required examination of evidence during the trial. The court reiterated that in a petition under Section 482, it could not scrutinize the merits of the allegations or resolve factual disputes, which were to be addressed in the trial court.

5. Applicability of Section 482 of the Code of Criminal Procedure:
The court emphasized that the inherent powers under Section 482 of the Code of Criminal Procedure should be exercised sparingly and with caution, primarily to prevent abuse of the court process or to ensure substantial justice. The court found that the present case involved disputed questions of fact and prima facie material showing the issuance of cheques by the accused, indicating a monetary transaction. Therefore, it was not a fit case for exercising inherent powers under Section 482 to quash the complaint.

Conclusion:
The application to quash the complaint under Section 138 of the N.I. Act was dismissed, as the court found prima facie evidence of liability and monetary transaction, and the disputed questions of fact needed to be resolved through trial. The court discharged the rule and vacated any interim relief granted.