2022 (8) TMI 605 - HC - Indian Laws

Dishonor of Cheque - insufficient funds - seeking compounding of all the offences or withdrawal of the Complaint - section 138 of NI Act - HELD THAT - After dishonour of cheque, when the Complaint had been filed and pending trial, the Accused had settled the entire amount. Here in this case, the Accused had settled it on the first date of hearing before the learned Judicial Magistrate. Still the Complainant prevented the Court from proceedings with compounding offence on the basis of a reported ruling which was prevented to the learned Magistrate from ordering the closure of proceeding or by dropping further proceedings. Considering the facts with the subject matter of the case during the period of Covid lock down through out India each and every citizens of the country facing financial problem. Ignoring those circumstances, he placed reliance on the decision of the Hon'ble Supreme Court in M/S. METERS AND INSTRUMENTS PRIVATE LIMITED ANR. VERSUS KANCHAN MEHTA 2017 (10) TMI 218 - SUPREME COURT and had exhorting pressure on the Accused, who had already settled the dues and, who had already requested the Complainant not to proceed with lodging the Complaint under Section 138 of Negotiable Instruments Act was ignored by the Complainant. Those facts reminds the Shakespeare's Play Shylock . The Complainant is that on nature which cannot be entertained by the Court. It is a purely abuse of process of Court committed by the Respondent/Complainant. Therefore, in the light of the above, the rulings cited by the learned Counsel for the Respondent/Complainant is rejected. Considering the request of the Petitioner to the Complainant while furnishing the cheque to prove the bona fide, it is clearly stated that two cheques had been honoured but three cheques were requested not to be presented till arrangement of funds. Still the Respondent was hasty in presenting the cheque not heeding to the request of the Petitioner - Petition allowed.

Summary

Issues:
Quashing of case in STC.No.383 of 2020 on the file of Judicial Magistrate No.II, Chidambaram.

Analysis:
1. The petitioners, owners of a property, entered into an agreement with the respondent, a tenant running a hotel business, to return possession of the premises with interiors and items for a sum of Rs.88,00,000. The petitioners paid Rs.3,00,000 by cheque and issued postdated cheques for the balance amount. Due to financial constraints during the Covid-19 lockdown, they requested time to arrange funds for the last cheque, but the respondent presented it prematurely, causing it to bounce.

2. The petitioners raised funds, sent a Demand Draft to the respondent, and explained the delay in payment. Despite settling the amount, the respondent filed a complaint under Section 138 of the Negotiable Instruments Act. The petitioners appeared in court, reported the payment, and requested withdrawal of the case, but the respondent refused to compromise or withdraw the complaint.

3. The respondent argued that since the last cheque was dishonored, the complaint was valid, citing Supreme Court rulings on the matter. The respondent insisted on interests and costs, claiming the petitioners had not paid them, thus justifying the continuation of the case.

4. The court found that the petitioners had settled the amount before the complaint was filed, and the respondent's refusal to withdraw the case was unjust. The court rejected the respondent's reliance on Supreme Court rulings, emphasizing the extraordinary circumstances of the case, akin to Shakespeare's "Shylock," where the respondent's actions were deemed an abuse of the court process.

5. Ultimately, the court allowed the Criminal Original Petition, quashing the complaint in STC.No.383 of 2020, highlighting the respondent's unjust behavior and the petitioners' efforts to settle the matter, despite facing financial challenges during the pandemic lockdown.