2021 (1) TMI 855 - HC - Indian Laws

Dishonor of cheque - pre-trial before the actual trial begins - rebuttal of presumption - Sections 118, 138 and 139 of the Negotiable Instrument Act - HELD THAT - It is manifestly clear that a dishonour would constitute an offence only if the cheque is returned by the bank ''unpaid' either because the amount of money standing to the credit of the drawer's account is insufficient to honour the cheque or that the amount exceeds the amount arranged to be paid from that account by an agreement with that bank. Now, for an offence under Section 138 NI Act, it is essential that the cheque must have been issued in discharge of legal debt or liability by accused on an account maintained by him with a bank and on presentation of such cheque for encashment within its period of validity, the cheque must have been returned unpaid. The payee of the cheque must have issued legal notice of demand within 30 days from the receipt of the information by him from the bank regarding such dishonor and where the drawer of the cheque fails to make the payment within 15 days of the receipt of the aforesaid legal demand notice, cause of action under Section 138 NI Act arises. This Court does not deem it proper, and therefore cannot be persuaded to have a pre-trial before the actual trial begins. A threadbare discussion of various facts and circumstances, as they emerge from the allegations made against the accused-applicant, is being purposely avoided by the Court for the reason, lest the same might cause any prejudice to either side during trial. But it shall suffice to observe that the perusal of the complaint case filed by opposite party no.2 and the statements of the complainant and her witnesses under Sections 200 and 202 Cr.P.C. makes out a prima facie case against the accused at this stage and there appear to be sufficient ground for proceeding against the accused. The prayer for quashing the impugned summoning order dated 13th March, 2019 as well as the entire proceedings of the Complaint Case No. 14 of 2019 under Section 138 of Negotiable Instrument Act, Police Station-Aurai, District-Bhadohi, pending in the Court of Additional Chief Judicial Magistrate, Bhadohi, Gyanpur, are refused.

Issues Involved:
1. Quashing of the summoning order dated 13th March, 2019.
2. Quashing of the entire proceedings of Complaint Case No. 14 of 2019 under Section 138 of the Negotiable Instruments Act.
3. Jurisdiction of the Additional Chief Judicial Magistrate, Bhadohi, Gyanpur.
4. Allegations of res judicata and parallel proceedings.
5. Validity of the legal notice and the Memorandum of Understanding.
6. Claims of mala fide intentions and abuse of process of law.

Issue-wise Detailed Analysis:

1. Quashing of the Summoning Order Dated 13th March, 2019:
The applicant sought to quash the summoning order issued by the Additional Chief Judicial Magistrate, Bhadohi, Gyanpur. The court examined whether the ingredients of Section 138 of the Negotiable Instruments Act were satisfied. The court noted that the cheques issued by the accused were dishonored due to insufficient funds, and the legal notice was duly served. The court held that all the statutory requirements under Section 138 were met, and thus, the summoning order was valid. The court found no reason to quash the summoning order.

2. Quashing of the Entire Proceedings of Complaint Case No. 14 of 2019:
The applicant also sought to quash the entire proceedings of the complaint case. The court observed that the complaint, along with the affidavits of the complainant and her witnesses, made out a prima facie case under Section 138 of the Negotiable Instruments Act. The court emphasized that the presumption under Sections 118 and 139 of the Act is in favor of the complainant and shifts the burden to the accused to rebut the presumption. The court found that the proceedings were not malicious or an abuse of the process of law and thus refused to quash the proceedings.

3. Jurisdiction of the Additional Chief Judicial Magistrate, Bhadohi, Gyanpur:
The applicant argued that the court in Bhadohi, Gyanpur, did not have jurisdiction. The court held that the jurisdiction was proper as the complainant's bank account, where the cheques were deposited and dishonored, was located in Bhadohi. The court referred to the Supreme Court's decision in Dashrath Rupsingh Rathod v. State of Maharashtra, which states that the place where the cheque is dishonored determines the jurisdiction. Thus, the Additional Chief Judicial Magistrate, Bhadohi, Gyanpur, had the jurisdiction to try the case.

4. Allegations of Res Judicata and Parallel Proceedings:
The applicant claimed that the proceedings were barred by res judicata as a similar complaint was filed in Pune. The court rejected this argument, stating that res judicata applies to cases already decided by a court. The court noted that the complaints were for different cheques and amounts, thus representing different causes of action. The court held that the proceedings in Bhadohi and Pune were not parallel but separate, each based on distinct transactions.

5. Validity of the Legal Notice and the Memorandum of Understanding:
The applicant questioned the validity of the legal notice and the Memorandum of Understanding (MoU). The court found that the legal notice complied with the statutory requirements, as it was served within the prescribed period. Regarding the MoU, the court noted that its registration status did not affect the validity of the cheques issued. The court emphasized that the primary issue was the dishonor of the cheques, which was adequately supported by the evidence.

6. Claims of Mala Fide Intentions and Abuse of Process of Law:
The applicant alleged that the proceedings were initiated with mala fide intentions and constituted an abuse of process. The court held that such claims involve questions of fact that should be adjudicated during the trial. The court cited several Supreme Court judgments, emphasizing that quashing proceedings at the pre-trial stage should be avoided unless the case falls within recognized categories justifying such action. The court found no justification to quash the proceedings on the grounds of mala fide intentions or abuse of process.

Conclusion:
The court refused to quash the summoning order dated 13th March, 2019, and the entire proceedings of Complaint Case No. 14 of 2019. The court found that the Additional Chief Judicial Magistrate, Bhadohi, Gyanpur, had proper jurisdiction, and the proceedings were not barred by res judicata or parallel proceedings. The legal notice and the MoU were deemed valid, and the claims of mala fide intentions were to be addressed during the trial. The application was rejected, and any interim orders were discharged.

← Previous Next →