2020 (2) TMI 1599 - SC - Indian Laws

Dishonor of Cheque - cheque in question was issued since the shares could not be issued - HELD THAT - The complaint filed by the Appellants Under Section 138 of the NI Act is earlier in point of time. The complaint filed by Respondent No. 2 is more than two years later. Since the issue in both the cases revolves around the same cheque, therefore, we find that instead of quashing the FIR No. 3 of 2007, the ends of justice would meet if proceedings arising out of FIR No. 3 of 2007 are transferred to the Court of Judicial Magistrate, Surat, where the proceedings of other complaint Under Section 138 of the NI Act are pending so that the complaint filed by the Appellants and the proceedings arising out of FIR alleged by Respondent No. 2 are decided together to avoid contradictory judgments and to facilitate the issues which are common in both. The appeal is disposed of with the direction that the proceedings arising out of FIR No. 3 of 2007 PS Mehsana shall stand transferred to the Court of Judicial Magistrate, Surat where the proceedings of complaint No. 33537 of 2006 is pending.

Summary

Issues:
1. Quashing of FIR under various sections of the Indian Penal Code.
2. Allegations of cheque dishonor and fraudulent use.
3. Jurisdiction and transfer of proceedings.

Detailed Analysis:
1. The appeal challenged the High Court's order dismissing the petition to quash FIR No. 3 of 2007 under Sections 420, 406, 419, 467, 468, 379, 465, 475, 120-B, and 114 of the Indian Penal Code. The Appellants had initially filed a complaint under Section 138 of the Negotiable Instrument Act, alleging dishonor of a cheque issued by Respondent No. 2. Subsequently, Respondent No. 2 filed a complaint against the Appellants for various offenses, leading to the lodging of FIR No. 3 of 2007 based on the magistrate's order under Section 156(3) of the Code of Criminal Procedure.

2. The central issue revolved around cheque No. 567889, which was allegedly from the Company's cheque book where Respondent No. 2 was an officer. The Appellants claimed the cheque was given to them due to the non-issuance of shares after their contribution, while Respondent No. 2 alleged that the cheque, along with two others, was fraudulently used by the Appellants. The timing of the complaints was crucial, with the Appellants' complaint under Section 138 of the NI Act preceding Respondent No. 2's complaint by over two years.

3. The Supreme Court, after considering the commonality of the issues surrounding the disputed cheque in both complaints, decided that transferring the proceedings arising from FIR No. 3 of 2007 to the Court of Judicial Magistrate, Surat, where the Appellants' complaint under the NI Act was pending, would serve the interests of justice. This transfer aimed to ensure a consolidated adjudication of both cases to prevent conflicting judgments and address the shared issues effectively. The directive for the parties to appear before the designated court on a specified date ensured the continuation of legal proceedings in an orderly manner.