2016 (7) TMI 622 - SC - Indian Laws

Dishonour of cheques - proceedings were initiated under the Negotiable Instrument Act - Counter complaint was filing against the complainant u/s 411 read with Section 120 (B) of the Indian Penal Code, 1860 - Held that - As the dispute between the parties is purely of civil nature and the complaint filed by the respondent No.2 is an attempt to avoid obligation arising out of dishonour of cheques issued by the complainant. We, however, do not express any final opinion about the merits of the complaints filed by the appellants for dishonour of cheques which are said to be still pending. We are satisfied that the complaint filed by the complainant is clearly misconceived and is abuse of process of the Court. The High Court has not considered the merits of the contentions raised in the petition for quashing as noticed from the operative part of the order of the High Court.We, accordingly, allow this appeal and quash the proceedings in the complaint case filed by the respondent No.2.

Summary

Issues Involved:
Appeal against order declining to quash a complaint under Section 411 read with Section 120 (B) of the Indian Penal Code, 1860.

Detailed Analysis:

1. Issue of Complaint and Allegations:
The complaint was filed against the appellant-company for offenses under Section 411 read with Section 120 (B) of the IPC. The complainant alleged that the accused-company stopped the supply of material without terminating the agreement, leading to the issuance of two cheques by the complainant, which were not returned as required, constituting an offense under Section 411 of the IPC.

2. Plea for Quashing of Complaint:
The appellants moved the High Court seeking to quash the complaint, arguing that it was an abuse of the court process. They contended that the complainant was an agent of the accused-company and had acknowledged liability under a written agreement, and the complaint was filed as a counter to pending complaints under the Negotiable Instruments Act, among other legal actions taken by the parties.

3. Judicial Review and High Court Decision:
The High Court, while acknowledging the contentions raised by the appellants, held that the maintainability of the complaint needed to be examined based on the evidence presented by the parties at the appropriate stage. The High Court did not delve into the merits of the contentions raised for quashing the complaint.

4. Supreme Court's Decision and Rationale:
Upon hearing the parties and reviewing relevant documents, the Supreme Court found that the dispute between the parties was civil in nature, arising from the dishonor of cheques issued by the complainant. The Court noted that the complaint by the respondent was misconceived and an abuse of the court process, as it aimed to avoid obligations related to the dishonored cheques. The Supreme Court allowed the appeal and quashed the proceedings in the complaint case filed by the respondent.

In conclusion, the Supreme Court's judgment highlighted the importance of distinguishing between civil and criminal disputes, emphasizing that the complaint in question was an abuse of the court process. The decision to quash the proceedings underscored the Court's stance on preventing misuse of legal mechanisms to evade legitimate obligations, while also ensuring a fair examination of pending complaints related to dishonored cheques.