2022 (4) TMI 556 - HC - Indian Laws

Dishonor of Cheque - cause of action - whether the dishonour of the cheques could have only given a cause of action to register an FIR for an offence u/s. 420 IPC or whether the cause of action was only for the filing of an offence u/s. 138 of the Negotiable Instruments Act? - HELD THAT - When a Special Law has been enacted to deal specifically to deal with cases of dishonour of a cheque, if in such a case the complainant who was suffered the loss on account of the dishonour of the cheques is also permitted to register an offence under the IPC, it would go to negate the very purpose for which the special law has been enacted. In such cases, experience is shown that the accused files an FIR against the complainant for offence under section 406, 420 or 379 of IPC for either theft or criminal breach of trust with regard to the cheques that have been entrusted to the complainant or for an outright act of cheating. It is a well settled principle of law that the general law will not prevail over the Special Law as enshrined in the maxim generalia specialibus non derogant. This Court takes great umbrage to the conduct of the senior counsel who has cast aspersions on the neutrality of the Court without adequate cause. However, the Court refuses to recuse itself and condemns the conduct and the words used by the senior counsel in the strongest possible terms. The Court was cut short by Mr. Mrigendra Singh before it could complete its observation that in the State of Madhya Pradesh, in comparison to other States, the situation is far better and the tendency of burking the crime rate is far lesser. The Senior Advocate in question is an Office Bearer of the Bar Council - The action taken will be a moment of truth, not just for the institutions of the Bar and the Bench, but to the people of this state with regard to the extent to which the Bar Council is willing to go in order to bring in line the erring members in the profession. An investiture of honour on a member of the Bar by designating him as a Senior Advocate is not for his vast knowledge, erudition, articulation and legal acumen alone, but it is an occasion where the court has acknowledged the Counsel s poise, patience and most importantly, his extreme grace, reflected in his conduct as a counsel. It is unbecoming of a person who dons silk to address the court in such a manner as has happened today only because he feels that the court does not agree with his submissions. Petition allowed.

Summary

Issues:
Quashing of FIR under section 420 of IPC based on dishonored cheques and allegations of theft and fraud.

Analysis:

Issue 1: Allegations in the FIR and 161 statement
The petitioners sought to quash Crime No.180/2013 registered against them under section 420 of IPC based on dishonored cheques. The FIR detailed allegations of the respondent being cheated by the petitioners through dishonored cheques totaling 64 lakhs. However, discrepancies arose when the 161 statement added suspicions of theft against the petitioners, lacking specific details. The court noted the speculative nature of these allegations, suggesting an afterthought to implicate the petitioners for theft.

Issue 2: Legal complexities of family property division
The petitioners argued a complex family property division involving multiple parties, including the respondent and deceased family members. A partition and subsequent MOU outlined the distribution of property shares among the family members. The court considered these details to understand the background of the case and the relationships between the parties.

Issue 3: Dishonored cheques under IPC vs. NI Act
The central question was whether dishonored cheques leading to a loss could constitute an offense under section 420 of IPC or solely under section 138 of the Negotiable Instruments Act. The court emphasized the importance of special laws like the NI Act in dealing with specific offenses. It highlighted the principle that general laws should not override special laws, suggesting that civil remedies might be more appropriate in cases like these instead of criminal prosecution.

Issue 4: Allegations of bias and misconduct
During the proceedings, allegations of bias and influence were raised regarding the filing of the FIR, including insinuations about the respondent's husband being a senior police officer. The court condemned the behavior of a senior counsel for casting aspersions on the court's neutrality. The court also noted the importance of decorum and respect in legal proceedings, especially from senior advocates.

Conclusion:
After considering the arguments and circumstances, the court allowed the petition, quashing the FIR and all subsequent proceedings. Additionally, the court forwarded the order to the Chairman of the State Bar Council of Madhya Pradesh for appropriate action against the senior counsel for unprofessional conduct. The judgment highlighted the significance of upholding legal standards, maintaining decorum in court proceedings, and respecting the integrity of the judicial process.