2022 (8) TMI 695 - SC - Indian Laws

Dishonor of Cheque - insufficient funds - double jeopardy or bar of Section 300(1) of Cr.P.C. - fraudulent and dishonest intention - Section 138 of the NI Act - conflicting situations - HELD THAT - It is deemed appropriate to refer this issue for decision by the larger bench to answer the following questions (1) Whether the ratio of the judgment, in the case of G. Sagar Suri 2000 (1) TMI 934 - SUPREME COURT and Kolla Veera Raghav Rao 2011 (2) TMI 1257 - SUPREME COURT lay down the correct law? or The view taken in the case of Sangeetaben Mahendrabhai Patel 2012 (4) TMI 728 - SUPREME COURT as followed in M/S. V.S. REDDY AND SONS VERSUS MUTHYALA RAMALINGA REDDY AND ANOTHER 2015 (9) TMI 1730 - SUPREME COURT which is subsequent and conflicting, lay down the correct proposition of law? (2) Whether on similar set of allegations of fact the accused can be tried for an offence under NI Act which is special enactment and also for offences under IPC unaffected by the prior conviction or acquittal and, the bar of Section 300(1) Cr.P.C. would attract for such trial? The questions of law have been formulated for answer by a larger bench for decision - the Registry is requested to place the file before Hon ble the Chief Justice of India for orders.

Summary

Issues Involved:
1. Quashment of proceedings under Sections 120B, 406, 420, and 34 of IPC.
2. Applicability of Section 300(1) of Cr.P.C. and the principle of double jeopardy.
3. Differentiation between offences under Section 138 of the NI Act and Sections 406, 420 of IPC.
4. Conflicting judicial precedents on the same set of facts leading to different offences under NI Act and IPC.

Issue-wise Detailed Analysis:

1. Quashment of Proceedings under Sections 120B, 406, 420, and 34 of IPC:
The appeal was filed against the High Court of Madras's decision to quash proceedings under Sections 120B, 406, 420, and 34 of IPC. The High Court had quashed these proceedings, stating that they arose from the same set of facts as the pending Section 138 NI Act case, and continuing both would be an abuse of process. The Supreme Court had to determine if the High Court's quashment was justified.

2. Applicability of Section 300(1) of Cr.P.C. and the Principle of Double Jeopardy:
The appellant argued that the plea of double jeopardy or bar under Section 300(1) Cr.P.C. applies only when the earlier and later offences are the same or have the same ingredients. The identity of the facts is not relevant; rather, the identity of the ingredients of the offences is crucial. The appellant cited the case of Sangeetaben Mahendrabhai Patel v. State of Gujarat to support that mens rea is not required under Section 138 of the NI Act but is essential under Section 420 of IPC.

3. Differentiation between Offences under Section 138 of the NI Act and Sections 406, 420 of IPC:
The Supreme Court examined whether the ingredients of offences under Section 138 of the NI Act and Sections 406, 420 of IPC are different. The appellant contended that while Section 138 of the NI Act does not require proof of mens rea, Sections 406 and 420 IPC involve fraudulent or dishonest intention. The respondents, however, relied on the judgment in Kolla Veera Raghav Rao v. Gorantla Venkateswara Rao, which held that prosecution under Section 420 IPC is barred by Section 300(1) Cr.P.C. when the facts are the same.

4. Conflicting Judicial Precedents on the Same Set of Facts Leading to Different Offences under NI Act and IPC:
The Court noted conflicting judgments. In Sangeetaben Mahendrabhai Patel, it was held that overlapping facts do not bar subsequent cases if the ingredients of the offences differ. Conversely, in G. Sagar Suri and Kolla Veera Raghav Rao, it was held that prosecution under IPC sections on the same facts as an NI Act case is barred by Section 300(1) Cr.P.C. The Court observed that these conflicting views need resolution by a larger bench to maintain consistency in law.

Conclusion and Referral to Larger Bench:
The Supreme Court concluded that the judgments in Sangeetaben Mahendrabhai Patel and the cases of G. Sagar Suri and Kolla Veera Raghav Rao are conflicting. To resolve this and maintain legal consistency, the Court referred the following questions to a larger bench:
1. Which judgment lays down the correct law: G. Sagar Suri and Kolla Veera Raghav Rao or Sangeetaben Mahendrabhai Patel?
2. Whether an accused can be tried for offences under both the NI Act and IPC on similar facts, unaffected by prior conviction or acquittal, and if Section 300(1) Cr.P.C. bars such trials.

The Registry was directed to place the file before the Chief Justice of India for further orders.