2009 (12) TMI 1055 - HC - Indian Laws

Summary

Issues Involved:
1. Issuance of process in Summary Criminal Case No. 2972 of 2004.
2. Alleged misuse of a blank cheque.
3. Legal principles regarding the issuance and use of blank cheques.
4. Abuse of process of law.

Summary:

1. Issuance of Process in Summary Criminal Case No. 2972 of 2004:
The petition challenges the issuance of process in Summary Criminal Case No. 2972 of 2004, confirmed by the Additional Sessions Judge-2, Jalgaon, in Criminal Revision Application No. 142 of 2006. The respondents filed a criminal case against the petitioners for an offence punishable u/s 138 of the Negotiable Instruments Act, alleging that a cheque for Rs. 50,90,622/- issued by the petitioners was dishonoured.

2. Alleged Misuse of a Blank Cheque:
The petitioners argued that the cheque in question was a blank cheque issued in good faith, as confirmed by a letter dated January 7, 2003, and that it was misused by the respondents. They contended that the amount on the cheque was falsely inflated to Rs. 50,90,622/-, whereas the actual outstanding amount was much lower, as evidenced by various letters and documents.

3. Legal Principles Regarding the Issuance and Use of Blank Cheques:
The court considered several legal precedents and principles, including:
- Natural Sugar and Allied Industries Ltd. v. Razzak s/o. Hazi Gaffar: At the stage of issuance of process, it is not permissible to go into the allegations of the complaint.
- State of Madhya Pradesh v. Awadh Kishore Gupta: The High Court should exercise caution in quashing proceedings and should not stifle legitimate prosecution.
- Purushottam s/o. Maniklal Gandhi v. Manohar K. Deshmukh: It is open for a holder to fill up blanks in a cheque, but misuse of a blank cheque can be considered a breach of trust.
- Section 20 of the Negotiable Instruments Act: The holder of a blank cheque is not entitled to recover more than the amount intended by the drawer.

4. Abuse of Process of Law:
The court found that the petitioners had presented sufficient evidence to suggest that the blank cheque was misused and that the complaint was an abuse of the process of law. The court emphasized that criminal prosecutions under Section 138 of the Negotiable Instruments Act should not be used as a pressure tactic for recovery of money.

Conclusion:
The court concluded that the continuation of the prosecution under Section 138 of the Negotiable Instruments Act would be an abuse of the process of law. Therefore, the order of issuance of process was quashed and set aside, and the writ petition was allowed. Rule made absolute accordingly.