2020 (12) TMI 1122 - HC - Indian Laws

Dishonor of Cheque - legally enforceable debt or not - rebuttal of presumption or not - several factual aspects /triable issues which are to be decided by the trial Court on concluding the trial - HELD THAT - The petitioners are not disputing the signatures on the said cheques. According to the petitioners, the said cheques were issued towards collateral security, but not towards legally enforceable debt. According to the second respondent, the said cheques were issued towards discharge of legally enforceable debt. The said issue is a triable one and the Court below will decide the same on conclusion of trial. The CC is of the year 2016. The present petition is filed under Section 482 of Cr.P.C. is also of the year 2016 and it is pending since then. The petitioners are not disputing the signatures on the said cheques. According to the petitioners, the said cheques were issued towards collateral security, but not towards legally enforceable debt. According to the second respondent, the said cheques were issued towards discharge of legally enforceable debt. The said issue is a triable one and the Court below will decide the same on conclusion of trial. The CC is of the year 2016. The present petition is filed under Section 482 of Cr.P.C. is also of the year 2016 and it is pending since then. The Apex Court in KAMAL SHIVAJI POKARNEKAR VERSUS THE STATE OF MAHARASHTRA AND ORS. 2019 (2) TMI 1894 - SUPREME COURT categorically held that quashing criminal proceedings is called for only in a case where complaint did not disclose any offence, or was frivolous, vexatious, or oppressive. If allegations set out in complaint did not constitute offence of which cognizance had been taken by Magistrate, it is open to High Court to quash the same - Defences may be available, or facts/aspects which when established during trial, may lead to acquittal, were not grounds for quashing complaint at threshold. At that stage, only question relevant is whether averments in complaint spell out ingredients of a criminal offence or not. The correctness or otherwise of the allegations had to be decided only in trial. At initial stage of issuance of process, it is not open to Courts to stifle proceedings by entering into merits of the contentions made on behalf of accused. Criminal complaints cannot be quashed only on the ground that allegations made therein appear to be of a civil in nature. If ingredients of offence alleged against accused are prima facie made out in complaint, criminal proceeding shall not be interdicted. Coming to the facts on hand, the only contention of the petitioners that the cheques in questions were issued by them towards collateral security but not legally enforceable debt, is a triable one. The Court below will decide the said issue basing on the evidence both oral and documentary available on record. Therefore, the proceedings cannot be quashed on the above said issue which is a triable issue in exercising of its powers under Section 482 of Cr.P.C. The petitioners have failed to establish any ground to quash the proceedings on the file of the II Special Metropolitan Magistrate, Cyberabad at Kukatpally. Petition dismissed.

Summary

Issues:
Quashing of proceedings under Section 482 of Cr.P.C. regarding the offence under Section 138 of the Negotiable Instruments Act, 1881 based on the contention of cheques being issued towards collateral security and not legally enforceable debt.

Analysis:
The petitioners argued that the cheques were issued as collateral security and not for a legally enforceable debt, referencing an agreement with the second respondent. However, the actual agreement was not provided, creating factual disputes to be resolved during trial regarding the purpose of the cheques and promissory notes issued. The court noted the need to determine if the cheques were indeed for a legally enforceable debt, a triable issue to be decided during the trial.

The complaint by the second respondent alleged that the cheques were issued to discharge a legally enforceable debt, emphasizing that the petitioners did not dispute their signatures on the cheques. The court highlighted that the issue of whether the cheques were issued for a legally enforceable debt or as collateral security is a triable matter, indicating that the court below would determine this issue at the conclusion of the trial.

Referring to the legal precedent set by the Apex Court, the judgment emphasized that criminal proceedings should only be quashed if the complaint does not disclose an offence or is frivolous, vexatious, or oppressive. It reiterated that at the initial stage, the focus should be on whether the allegations in the complaint constitute a criminal offence, with the actual determination of the allegations' correctness left for the trial stage. The court concluded that the contention regarding the purpose of the cheques being collateral security was a triable issue and not a ground to quash the proceedings under Section 482 of Cr.P.C.

In light of the above analysis and legal principles, the court dismissed the Criminal Petition, stating that the petitioners failed to establish grounds to quash the proceedings. Consequently, the interim order was vacated, and any pending miscellaneous petitions were to be closed.