2014 (2) TMI 1399 - SC - Indian Laws

Dishonor of Cheque - criminal offence or not - Section 420 read with Section 120-B of the Indian Penal Code - HELD THAT - No doubt the views of the High Court in respect of averments and allegations in the FIR were in the context of a prayer to quash the FIR itself but in the facts of this case those findings and observations are still relevant and they do not support the contentions on behalf of the Appellants. At the present stage when the informant and witnesses have supported the allegations made in the FIR it would not be proper for this Court to evaluate the merit of the allegations on the basis of documents annexed with the memo of appeal. Such materials can be produced by the Appellants in their defence in accordance with law for due consideration at appropriate stage. On considering the facts of the present case it is found that the facts were properly noticed by the High Court on earlier occasion while examining the petition preferred by the Appellants for quashing of FIR of this case. The same view has been reiterated by the High Court in the order under appeal for not interfering with the order of cognizance by the learned Magistrate. Hence there are no good ground to interfere with the criminal proceedings against the Appellants at this stage. Appeal dismissed.

Summary

Issues:
Dismissal of petition under Section 482 of the Code of Criminal Procedure by the High Court for interference with the order of Chief Judicial Magistrate taking cognizance of offence under Section 420 read with Section 120-B of the Indian Penal Code.

Analysis:
The appeal was filed against the High Court's decision to not interfere with the order of the Chief Judicial Magistrate, Sriganganagar, dated 22.05.2000, which took cognizance of the offence under Section 420 read with Section 120-B of the Indian Penal Code. The case stemmed from a dispute where the informant, a partner of a firm dealing in cotton, alleged that the accused, who were directors of another company, induced him to transfer management and assets under false pretenses. The informant claimed that post-dated cheques issued by the new directors bounced, leading to a criminal complaint. The High Court previously dismissed a petition to quash the FIR, stating that there was a case worth investigating. Subsequently, the police investigation concluded the matter was civil, but the Magistrate rejected this, leading to the current appeal.

The Appellants argued that the FIR contained wrong allegations and did not establish a criminal offence, citing various communications as evidence. They relied on legal precedents to support their position that if a complaint only reveals a civil dispute without indicating a criminal offence, the criminal proceedings can be quashed. However, the Respondent contended that the FIR did disclose a criminal offence, referencing the High Court's earlier judgment in the same matter. The court emphasized that a set of facts could give rise to both civil and criminal liabilities, and the availability of a civil remedy does not warrant quashing criminal proceedings. It was noted that the High Court had previously examined the facts and found them sufficient to proceed with the case, leading the Supreme Court to dismiss the appeal, stating that there was no reason to interfere with the ongoing criminal proceedings against the Appellants.

The judgment clarified that the observations made were specific to the current stage and would not impact the Appellants' defense in future proceedings. The decision highlighted the importance of distinguishing between civil wrongs and criminal offences based on the allegations in the complaint to determine the course of legal action. The Supreme Court's ruling upheld the continuation of the criminal proceedings against the Appellants, emphasizing that the allegations in the FIR disclosed a criminal offence, warranting further investigation and legal action.