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TMI Blog2024 (2) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... authorization letter as claimed by the opposite party No.2 has been issued for the specific time period of 15 working days i.e. from 16.08.2020 till 30.08.2020 and there is no averment in the complaint made by the opposite party No.2 that the said letter has been extended further - It is admitted case of the complainant that the alleged authorization letter has not been issued by the applicant no.2, who being a Managing Director is solely authorized to issue any such letter on behalf of the Company, thus, there exists no debt or liability upon the applicants. Section 138 is structured in two parts, the primary and the provisory. The contents of the proviso place conditions on the operation of the main provision, while it does not form a constituent of the crime itself, it modulates or regulates the crime in circumstances where,unless its provisions are complied with, the already committed crime remains impervious to prosecution - The cause of action for prosecution will arise only when the period stipulated in the proviso elapses without payment. Ingredients of the offence have got to be distinguished from the conditions precedent for valid initiation of prosecution. The stipula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Court No.10, Lucknow. 4. Learned counsel for the applicants submitted that the present case arises out of complaint preferred by the opposite party no.2. The applicant no.1 is a company incorporated under the Companies Act, 1956 bearing Corporate Identification Number (CIN) U60301UP1957PLC023015 and having its registered office at Mehrab Tower, Sixth Floor TC-16V, Vibhuti Khand, Gomti Nagar, Lucknow (hereinafter referred as Company for sake of brevity). The applicant no.2 is the Managing Director of the Company and the affairs of the Company are run and managed by him. 5. Learned counsel for the applicants further submitted that on 17.11.2021, the opposite party no.2 preferred a complaint under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as N.I. Act for the sake of brevity) against the applicants before the learned trial court alleging there in that the applicant no.2 and other co-accused persons contacted him on behalf of the Company for the purpose of sale of hotel and authorized him to deal for the sale of it and agreed to pay Rs.10 Crores as a fee for the services to be rendered by him vide alleged Memorandum of Understanding (Annex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port regarding lost cheques, thus, it appears that the alleged cheques were handed over to the complainant with the connivance of an employee of the applicant Company only with the intention to misappropriate the alleged cheques. It is further argued that even though the alleged MoU was prepared as a draft, the same was only communicated through e-mail, which was neither signed by any of the parties nor any stamp or seal of the company was appended on it nor there is any date. An unsigned, unstamped, undated draft MoU/any agreement without payment of any stamp duty is inadmissible as a piece of evidence in the eyes of law. 9. Learned counsel for the applicants further submitted that the complainant has neither disclosed his own credentials or his alleged proprietorship firm KBJ Engineering Services such as PAN No./GSTIN No./Income Tax Returns so as to ascertain his capacity to crack the claimed deal of sale. 10. Learned counsel for the applicants further submitted that the complainant somehow got handover to the two blank cheques of the company with the connivance of an employee of the applicants' Company and thereafter, conspired to extract the money from the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could have been made out against the applicant Company and therefore, the connivance of the employee of opposite party No.3 cannot be ruled out. It is further submitted that the act/omission on the part of the concerned bank employee has also caused irreparable damage to the reputation and image of the applicant Company. It is further argued that it is the admitted case of the complainant that no bill was ever raised in discharge of the liabilities for which two alleged cheques were issued which casts suspicion over the story of the complainant as a person/firm providing any service and charging the fee of Rs.10 Crores is also liable for 18% GST/Service Tax which is a huge amount and cannot escape the eyes of tax department. Further, argument of learned Counsel for the applicants is that it is fact of common knowledge that the brokerage in any sale is paid in percentage and normally it is not more than 1% of an astronomical amount that too about 25% of the forged value of property, which is not believable. 15. Learned Counsel for the applicants further submitted that the two cheques of Rs.5 Crore presented by the opposite party No.2 before the incompetent Bank who has no juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also non speaking as the Magistrate has not considered any material available before him while summoning the applicants to face the trial. As such, the impugned order dated 22.07.2022 on the face of record appears to be unjustified and is passed against the provisions of the N.I. Act , therefore, the same is liable to be set aside by this Court alongwith the entire proceeding. 20. Learned counsel for the opposite party no.2 has opposed the argument raised by the learned counsel for the applicants and submitted that in lieu of the MoU sent by the complainant to the applicants vide email dated 08.10.2020, the applicant no.2 issued two post-dated cheques to the complainant bearing nos.955800 and 955801 dated 24.06.2021 for Rs.5,00,00,000/- each as security and ensured the complainant that if the payment of service fee is not made by the applicants, the complainant can present the cheques for encashment. He further submitted that the first advance payment in lieu of the sale of said hotel was made on 29.09.2020 and in part payments all the sale amount of the Hotel was paid till June, 2021 but even after receiving the sale amount of the said Hotel and repeated requests of the compla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, who did the specimen signatures. This fact has also been confirmed by a forensic expert, whose report is annexed as Annexure No.21 to the affidavit filed in support of the present application. 25. It is observed earlier that this Court is not a handwriting expert, though, prima facie from bare perusal of the cheques, both the signatures are different whereas, the cheques were issued on the same date. It is further observed that on perusal of the signature on the sale deed, which was executed by the applicants for sale of Hotel, wherein the signature of the applicant No.2 is present. thus, it transpires that signatures on the cheques and signature on the sale deed are different, there appears force in the argument of learned counsel for the applicants that the cheques were not signed by the applicant No.2 and this fact has also not been considered by the trial court while passing the impugned order. 26. It is further observed that though a case of breach of trust may be, both a civil wrong and a criminal offence, but there would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence. The present case is one of tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he operation of the main provision, while it does not form a constituent of the crime itself, it modulates or regulates the crime in circumstances where,unless its provisions are complied with, the already committed crime remains impervious to prosecution. The cause of action for prosecution will arise only when the period stipulated in the proviso elapses without payment. Ingredients of the offence have got to be distinguished from the conditions precedent for valid initiation of prosecution. The stipulations in the proviso must also be proved certainly before the offender can be successfully prosecuted. But in the strict sense they are not ingredients of the deemed offence under the body of Section 138 of the N.I. Act, though the said stipulations must also be proved to ensure and claim conviction. It is in this sense that it is said that the proviso does not make or unmake the offence under Section 138 of the NI Act. That is already done by the body of the sections. 29. Further, Hon ble the Supreme Court in case of Indus Airways Private Limited and Others Vs. Magnum Aviation Private Limited and others; (2014) 12 SCC 539 in para 9 has held as under:- 13. The explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the judgment has been extracted herein: This Court has noted that the object of the statute was to facilitate smooth functioning of business transactions. The provision is necessary as in many transactions' cheques were issued merely as a device to defraud the creditors. Dishonor of cheque causes incalculable loss, injury and inconvenience to the Vide the Banking, Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 payee and credibility of business transactions suffers a setback. At the same time, it was also noted that nature of offence under Section 138 primarily related to a civil wrong and the 2002 amendment specifically made it compoundable. 32. Further, a three Judge Bench of Hon'ble Supreme Court in Dashrath Rupsingh Rathod Vs. State of Maharashtra, 2014(9) SCC 129 in para 58 held as follows: 58. To sum up: 58. 1. An offence under Section 138 of the Negotiable Instruments Act 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for unsufficiency of funds or for the reason that the amount exceeds the arrange ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to continue, the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage. 34. Further the Hon'ble Supreme Court of India in the case Inder Mohan Goswami v. State of Uttaranchal (2007)12 SCC 1 has held that it would be relevant to keep into mind the scope and ambit of section 482 Cr.PC and circumstances under which the extra ordinary power of the court inherent therein as provisioned in the said section of the Cr.P.C. can be exercised, para 23 is being quoted here under:- 23. This court in a number of cases has laid down the scope and ambit of courts powers under section 482 Cr.P.C. Every High Court has inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent abuse of the process of the court. Inherent power under section 482 Cr.P.C. can be exercised: (i) to give effect to an order under the Code; (ii) to prevent abuse of the process of court, and (iii) to otherwise secure the ends of justice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of mind that there is sufficient basis for proceeding against the said accused and formation of such an opinion is to be stated in the order itself. The order is liable to be set aside if no reason is given therein while coming to the conclusion that there is prima facie case against the accused, though the order need not contain detailed reasons. A fortiori, the order would be bad in law if the reason given turns out to be ex facie incorrect. 36. Further, Hon ble the Supreme Court of India has provided guidelines in case of State of Haryana Vs. Bhajan Lal reported in 1992 Supp (1) SCC 335 for the exercise of power under Section 482 Cr.P.C. which is extraordinary power and used separately in following conditions:- 102.(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cure the ends of justice. The power of High Court is very wide but should be exercised very cautiously to do real and substantial justice for which the court alone exists. 39. Thus, in view of the law laid down by the Hon'ble Apex Court and the facts and circumstances, as narrated above and from the perusal of the record, the impugned summoning order dated 22.07.2022 passed in Complaint Case No.83520 of 2021, under Section 138 N.I. Act, Police Station P.G.I., District Lucknow and the entire proceeding are against the spirit and directions issued by the Hon'ble Apex Court and are liable to be set aside. 40. Accordingly, the impugned summoning order dated 22.07.2022 passed by Presiding Officer, Additional Court No.10, Lucknow in Complaint Case No.83520 of 2021, under Section 138 N.I. Act, Police Station P.G.I., District Lucknow and the entire proceeding pending before the Presiding Officer, Additional Court No.10, Lucknow is hereby set aside and reversed and the matter is remanded back to the trial court. Learned trial court concerned is directed to pass a fresh order within four months from today, keeping in view the discussions/observations and judgments of Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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