2023 (11) TMI 1278 - HC - Indian Laws

Dishonour of Cheque - non-payment against one dishonoured cheque - sufficient opportunity to be provided to a person who issues the cheque - HELD THAT - Once a cheque is issued by a person, it must be honoured and if it is not honoured, the person is given an opportunity to pay the cheque amount by issuance of a notice and if he still does not pay, he is bound to face the criminal trial and consequences. It is seen in many cases that the petitioners with malafide intention and to prolong the litigation raise false and frivolous pleas and in some cases, the petitioners do have genuine defence, but instead of following due procedure of law, as provided under the N.I. Act and the Cr.PC, and further, by misreading of the provisions, such parties consider that the only option available to them is to approach the High Court and on this, the High Court is made to step into the shoes of the Metropolitan Magistrate and examine their defence first and exonerate them. The High Court cannot usurp the powers of the Metropolitan Magistrate and entertain a plea of accused, as to why he should not be tried under Section 138 of the N.I. Act. This plea, as to why he should not be tried under Section 138 of the N.I. Act is to be raised by the accused before the Court of the Metropolitan Magistrate under Section 251 of the Cr.PC under Section 263(g) of the Cr.PC. The parameters of the jurisdiction of the High Court, in exercising jurisdiction under Section 482 Cr.PC, are now almost well-settled. Although it has wide amplitude, but a great deal of caution is also required in its exercise. The requirement is, the application of well known legal principles involved in each and every matter. Adverting back to the facts of the present case, this Court does not find any material on record which can be stated to be of sterling and impeccable quality warranting invocation of the jurisdiction of this Court under Section 482 Cr.PC at this stage. More so, the defence as raised by the petitioner in these petitions requires evidence, which cannot be appreciated, evaluated or adjudged in the proceedings under Section 482 of Cr.PC and the same can only be proved in the Court of law. There are no ground for quashing the CC NI Act 2459 of 2023 is made out and also there are no flaw or infirmity in the proceedings pending before the Trial Court. However, the Trial Court shall certainly consider and deal with the contentions and the defence of the petitioner in accordance with law. Petition dismissed.

Summary

Issues Involved:
1. Quashing of proceedings under Section 138 of Negotiable Instruments Act, 1881.
2. Validity of cheque issued as security.
3. Misuse of cheque and allegations of forgery.
4. Jurisdiction and powers of the High Court under Section 482 Cr.P.C.
5. Concurrent civil suit and criminal proceedings.

Issue-wise Detailed Analysis:

1. Quashing of Proceedings under Section 138 of Negotiable Instruments Act, 1881:
The petitioner sought to quash the proceedings in case CC NI Act 2459/2023, arguing that the cheque was issued as security and not for discharging any legally recoverable debt. The court emphasized that once a cheque is issued, it must be honored unless the issuer pays the amount upon receiving a notice. If unpaid, the issuer faces criminal trial. The court held that the High Court cannot usurp the powers of the Metropolitan Magistrate and entertain the accused's plea to avoid trial under Section 138 of the N.I. Act. The accused must present their defense before the Metropolitan Magistrate.

2. Validity of Cheque Issued as Security:
The petitioner argued that the cheque was issued as security and not for an existing debt. The court referenced the Supreme Court's judgment in Sripati Singh vs. State of Jharkhand, which stated that a cheque issued as security can mature for presentation if the loan is not repaid by the due date. The court dismissed the petitioner's argument, stating that even cheques issued as security are subject to Section 138 if dishonored.

3. Misuse of Cheque and Allegations of Forgery:
The petitioner claimed the cheque was misused and that the amount had been paid, supported by bank statements and ledger accounts. The court noted that these defenses require evidence and cannot be adjudicated under Section 482 Cr.P.C. The court also dismissed the argument that the cheque was undated and filled in different handwriting, emphasizing that such issues are to be addressed during the trial.

4. Jurisdiction and Powers of the High Court under Section 482 Cr.P.C.:
The court reiterated that the High Court's jurisdiction under Section 482 Cr.P.C. is limited and should be exercised with caution. The court found no material of "sterling and impeccable quality" to warrant quashing the proceedings at this stage. The defenses raised by the petitioner require a trial for proper adjudication.

5. Concurrent Civil Suit and Criminal Proceedings:
The petitioner argued that the criminal proceedings under Section 138 N.I. Act were counter to a civil suit filed for recovery of amounts. The court held that the existence of a civil suit does not preclude criminal proceedings under Section 138 N.I. Act. The court emphasized that the issues raised by the petitioner are matters of trial and cannot be resolved in a petition under Section 482 Cr.P.C.

Conclusion:
The court found no grounds to quash the proceedings under Section 138 of the N.I. Act and dismissed the petition. The trial court was directed to consider the petitioner's contentions and defenses in accordance with the law. The court also disposed of CRL.M.A. 12888/2023 accordingly.