9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (5) TMI 489 - HC - Indian LawsDishonor of Cheque - inter-corporate loan (in the form of deposit) given to petitioner being one of the Directors - HELD THAT - The underlying position is that an amount worth of ₹ 50 Lakh was advanced to petitioner/debtor beneficiary in the form of an inter-corporate deposit, upon certain agreed terms, simply to tied over the financial cricis faced by the RMPL, of which petitioner is one of the directors. Such amount was indisputably credited to the bank account of RMPL, maintained at HDFC bank. On the selfsame date of credit of inter-corporate deposit, an amount worth of ₹ 50 Lakh was diverted to a S.B.I. account maintained separately by the petitioner/beneficiary - Mr. Banjeree never disputed with the amount of inter-corporate deposit, and thus he was honest in his submission as regards the liability of the petitioner, he had with respect to the debt already incurred by petitioner in the form of inter-corporate deposit. A separate case under Section 138 of Negotiable Instruments Act is also pending against the petitioner. The settled proposition of law is that though there is civil remedy available in connection with a commercial transaction, but there is no legal impediment to launch a separate prosecution under Section 138 of N.I. Act, subject to the fulfilment of the ingredients constituting such offence, which is indeed different from the instant one, where fraudulent and dishonest intention on the part of the accused/petitioner are the essence of offence, complained of. Therefore, the instant prosecution is very much permissible and with the sanction of law. The instant revisional application fails being without any merits.
Issues Involved:
1. Quashing of proceedings under Sections 420/406/120B of the Indian Penal Code. 2. Determination of fraudulent or dishonest intention. 3. Civil dispute versus criminal prosecution. 4. Applicability of Section 482 Cr.P.C. for quashing proceedings. Issue-wise Detailed Analysis: 1. Quashing of Proceedings under Sections 420/406/120B of the Indian Penal Code: The petitioner sought to quash the proceedings in connection with G.R. Case No. 6166 of 2020, pending before the Additional Chief Judicial Magistrate, Barrackpore, related to Khardah Police Station Case No. 565 of 2020, under Sections 420/406/120B of the IPC. The case was initiated following a complaint by RMPL, which had provided an inter-corporate deposit of ?50,00,000 to the petitioner. The petitioner allegedly failed to repay the loan and issued a post-dated cheque that was dishonored due to stop payment instructions. The Criminal Investigation Department, West Bengal, took over the investigation due to the high-value financial fraud involved. 2. Determination of Fraudulent or Dishonest Intention: The petitioner’s counsel argued that there was no fraudulent or dishonest intention at the inception of the transaction, and the failure to repay was due to the impact of COVID-19. The petitioner had even paid interest on the loan on a couple of occasions. It was contended that mere failure to repay does not constitute cheating or criminal breach of trust without evidence of fraudulent intention from the beginning. The counsel cited several precedents, including Murari Lal Gupta Vs. Gopi Singh and Anil Mahajan Vs. Bhor Industries Ltd., to support the argument that the case was a civil dispute rather than a criminal offense. 3. Civil Dispute versus Criminal Prosecution: The State and the complainant’s counsel argued that the diversion of funds to another bank account indicated a dishonest intention. They contended that the existence of a civil remedy does not preclude criminal prosecution if the elements of a criminal offense are present. The complainant’s counsel referenced Indian Oil Corporation Vs. NEPC India Ltd. & Ors. and Amit Kapoor Vs. Ramesh Chander & Anr., emphasizing that the allegations disclosed a criminal offense and warranted continuation of the prosecution. The case under Section 138 of the Negotiable Instruments Act was separate and did not bar the current prosecution under Sections 406 and 420 IPC. 4. Applicability of Section 482 Cr.P.C. for Quashing Proceedings: The court examined the scope of Section 482 Cr.P.C., which allows the High Court to quash proceedings to prevent abuse of process or secure the ends of justice. The court referred to the principles laid down in State of Karnataka Vs. M. Devendrappa & Anr. and State of Orissa & Ors. Vs. Saroj Kumar Sahoo, noting that the power should be exercised sparingly and in rare cases. The court concluded that the allegations, if taken at face value, constituted a prima facie case of cheating and criminal breach of trust. The investigation was at an initial stage, and further collection of evidence was necessary. Conclusion: The court found that the petitioner’s arguments did not warrant quashing the proceedings at this stage. The investigation by the CID, West Bengal, was directed to be expedited. The revisional application was dismissed as without merit, and the case diary was ordered to be returned. The court emphasized that the principles of law cited by the parties would be applicable at the appropriate stage, pending the collection of materials during the investigation.
|
