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TMI Blog1999 (11) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the case it is revealed that one Shanku Concretes Pvt. Ltd., Halol, District Panchmahals, a company incorporated through its Managing Director Mr. Jaidev Kotak, residing at Bombay, obtained advance of ₹ 15 lacs from one Balbhadrasinh Indrasinh Zala, residing at Surendranagar. It appears that vide an agreement dated 5th June, 1995, the company Shanku Concretes Pvt. Ltd. through its Managing Director Mr. Jaidev Kotak entered into a contract with the above said Balbhadrasinh Indrasinh Zala and obtained advances by way of a debt of ₹ 15 lacs to promote the production of the company. On that day, the amount of ₹ 15 lacs were paid to Mr. Jaidev Kotak, Managing Director. The agreement termed that the amount was to be returned after six months and during that period Managing Director Mr. Jaidev Kotak, as per the arrangement between the parties, issued seven cheques of due dates with a stipulation that if cheques are bounced, Balbhadrasinh Indrasinh Zala may take action against the company. Then, thereafter, a Criminal Case No. 132 of 1996 came to be filed by said Balbhadrasinh Indrasinh Zala in the court of Judicial Magistrate, First Class, at Lakhtar, against two a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and can be divided in two parts - (i) quashing of the complaint i.e. criminal case pending before the learned Judicial Magistrate, First Class at Lakhtar and (ii) to quash the proceeding of issuing notices to petitioners No. 2 and 3 to implead them as accused in the criminal case referred above. 7. While dealing with the first part of the matter, learned Advocate Mr. N.K. Majmudar urged that a civil suit has been filed by the complainant for the money advanced and agreement between the parties was executed and as per the arrangement of the agreement, the cheques were offered as a collateral security and, therefore, the transaction was exclusively and entirely a civil transaction and which would not attract criminal liability under Section 138 of the Act. Mr. Majmudar, for this, has relied upon a decision of the High Court of Madras in the matter of BALAJI SEAFOODS EXPORTS (INDIA) LTD vs. MAC INDUSTRIES LTD, reported in 1999 Current Criminal Reports, 424 wherein it was held that undated cheques given as security and bounced, would not attract the provision of Section 138 of the Negotiable Instruments Act. On the second part of the matter, learned Advocate Mr. Majmudar urged tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d decision of this court in MISC. CRIMINAL APPLICATION NO. 6224 of 1996, wherein the accused was relegated to the Magistrate for making an application for dropping of the proceedings. Sofar as the present matter is concerned, Mr. Vyas has urged that Sec 141(2) would be attracted and not Section 141(1). Petitioners No. 2 and 3 are very well the Directors of the Company i.e. original accused No. 1 and are liable to answer the complaint, which is filed under Section 138 of the Negotiable Instruments Act. Mr. Vyas urged that any person connected with the crime may be arraigned as an accused in a complaint because the court is not taking the cognizance of the accused but the court takes the cognizance of the offence. For this, Mr. Vyas has relied upon a decision of the Apex Court in the matter of RAGHUBANS DUBEY vs. STATE OF BIHAR, reported in AIR 1967 SC 1167. Mr. Vyas, to canvass his contention that the other Directors under Sec. 141(2) are liable, has relied upon a decision of this Court in the matter of BHAVESH BHARATBHAI MEHTA vs. STATE OF GUJARAT, reported in 1999 (2) GLR 1323. 9. Having considered the rival contentions and on scrutinising the record, it appears that the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. 10. Pursuing Section 138 of the Negotiable Instruments Act, the part of the section, which is relevant for this matter is for the discharge, in whole or in part, of any debt or other liability the preexisting condition is, there must be the existence of any debt or any other liability, for which the cheque might have been issued and bounced. Reverting back to the facts of the case, it is an admitted case that the company i.e. the original accused No. 2 wanted to promote its production and, therefore, borrowed ₹ 15 lacs from the original complainant i.e. the present respondent No. 2. The Managing Director, at present absconding, original accused No. 2 on behalf of the company original accused No. 1, entered into an agreement, clearly binding himself and the company, to repay the amount within six months from the date of the execution of the agreement. It clearly appears that to ensure the due performance of the terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the money, making a statement to repay the same at some future date, the cheques were issued for due performance. Therefore, the transaction from its very nature or from the intention of the parties, as reflected in the agreement executed between the parties, is purely of a civil nature, for which a civil suit has already been filed. The very fact that the payment was agreed to some future date and there was no debt or liability on the date of delivery of the cheques, will take the case out of the purview of the Section 138 of the Negotiable Instruments Act. 15. Sofar as the arguments of Mr. Vyas that this application at the instance of petitioners No. 2 and 3 is not maintainable to the benefit of the accused No. 2 i.e. Mr. Jaidev Kotak is concerned, the same cannot be upheld for the simple reason that the powers of the High Court under Section 482 are so wide as even to entertain a suo moto petition or anything which is brought to the notice of the High Court by any person and, therefore, mere fact that this petition is filed by petitioners No. 2 and 3 who were not the accused in the complaint, could not be a ground to reject the petition. 16. The other arguments advanced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Section 245 of the Criminal Procedure Code, he is debarred from approaching the court even at an earliest (sic earlier) point of time when the Magistrate takes cognizance of the offence and summons the accused to appear to contend that the very issuance of the order of taking cognizance is invalid on the ground that no offence can be said to have been made out on the allegations made in the complaint petition. It has been held in a number of cases that power under Section 482 has to be exercised sparingly and in the interest of justice. But allowing the criminal proceeding to continue even where the allegations in the complaint petition do not make out any offence would be tantamount to an abuse of the process of court, and therefore, there cannot be any dispute that in such case power under Section 482 of the Code can be exercised. Bearing in mind the parameters laid down by this Court in several decisions for exercise of power under Section 482 of the Code, we have examined the allegations made in the complaint petition and the statement of the complainant and the two other witnesses made on oath before the Magistrate. We are clearly of the opinion that the necessary ingredient ..... X X X X Extracts X X X X X X X X Extracts X X X X
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