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TMI Blog2024 (7) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... be a total ban on the exercise of such power where the situation so warrants, at the same time, there are limitations of self-restraint that are recognized and followed by the Courts in exercising this jurisdiction. One such limitation is where the petitioner had an alternate efficacious remedy, however, did not avail of the same within the period of limitation and thereafter filed the petition under Section 482 of the Cr.P.C. to overcome the objection of limitation. In Prabhu Chawla [ 2016 (9) TMI 1595 - SUPREME COURT] , the Supreme Court quoted with approval its earlier judgment in Madhu Limaye [ 1977 (10) TMI 111 - SUPREME COURT] , wherein it had been held that though availability of an alternate efficacious remedy of a Revision under Section 397 of the Cr.P.C. does not affect the amplitude of the inherent power under Section 482 of the Cr.P.C. that the High Court possesses, at the same time, easy resort to inherent power is not to be allowed except under compelling circumstances; it should not invade areas set apart for specific power under the Cr.P.C. itself. It was held that while it is true that Section 482 of the Cr.P.C. is pervasive, it should not subvert legal interdicts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refrom. 2. Since the Complaint Cases have been founded on the same transaction, though in respect of different cheques, and pertain to the same set of facts and circumstances, and mainly common contentions have been raised to seek quashing thereof, therefore, these petitions are being disposed of by way of this common judgment. Factual Matrix: 3. The above complaints have been filed by the Complainant, that is, Mr. Shivam Bhagat, alleging that the petitioners/accused are the Directors, Promoters, and Authorized Representatives of Swift Boutique Hotel Pvt. Ltd. (hereinafter referred to as the SBHPL ) and Swift Global Pvt. Ltd. (hereinafter referred to as the SGPL ), which are engaged in the business of hotels, catering, and other allied fields. SBHPL and SGPL collectively shall be referred to hereinbelow as the Companies . 4. It is stated that the petitioners jointly represented themselves to be the Directors, Promoters, and Authorized Representatives of the Companies and as being responsible for the management, functioning, working, and day-to-day affairs of the said Companies. The Complaint states that it is on these assurances that the Complainant decided to invest a huge amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal account(s) in addition to a cheque from the account of the said company duly and jointly signed by the petitioners, with a right to the Complainant to insert dates on the said cheques. It is stated that as per the SSSA, the petitioners also promised to pay the Complainant interest on all the aforesaid amounts and also assured that the cheques for the final interest amount would be issued at the time of said payment. 11. It is asserted in the Complaints that the promises and assurances of the directorship and registration of the shares in the name of the Complainant and all the warranties proved wrong and the petitioners failed to comply with the terms and conditions of the SSSA and the letter issued subsequently on 15.07.2010. It is stated that the Complainant sent a notice to the petitioners on 04.10.2012, informing them of his withdrawal from the arrangement and asking for his payments and interest in accordance with the SSSA and the subsequent letter dated 15.07.2010, however, no response was received by the Complainant from the Petitioners. 12. The Complainant deposited the cheques issued by the Petitioners from their personal accounts, all of which were returned as dishono ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer, the Complaint was listed before the Court of the learned Metropolitan Magistrate-03, North District Rohini Court, which Court, vide its order dated 22.01.2015, was pleased to issue summons to the accused/petitioner-Sachin Gogia. 20. The Complaint Cases are now pending adjudication before the Court of the learned Metropolitan Magistrate-03, North District, Rohini Courts, Delhi (hereinafter referred to as the Trial Court ). 21. In the complaints, the learned Trial Court framed Notice under Section 251 of the Cr.P.C. against the petitioners vide order dated 27.10.2022. Submissions of the Learned Counsels for the Petitioners: 22. Mr.Hrishikesh Baruah, the learned counsel for the petitioners in CRL.M.Cs. 1675/2022, 1688/2022, 1693/2022, and 1694/2022 submits that the complaint cases filed against the petitioners are liable to be dismissed as there is no legal debt or liability owed by the petitioners to the Complainant. He submits that the entire case of the Complainant is based on the buyback option under the SSSA dated 08.07.2010. He submits that in terms of Clause 4.2 of the SSSA, the option to buy back the shares could be exercised by the Complainant within a maximum period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgments of the Supreme Court in Indus Airways (P) Limited Ors. v. Magnum Aviation (P) Limited Anr. (2014) 12 SCC 539; and Dashrathbhai Trikambhai Patel v. Hitesh Mahendrabhai Patel, (2023) 1 SCC 578; and of this Court in Icon Buildcon Pvt. Limited v. Aggarwal Developers Pvt. Limited Ors., 2014 SCC OnLine Del 1563. 26. He further submits that in terms of the SSSA and the letter dated 15.07.2010, two sets of cheques had been issued to the Complainant; one from the account of SGPL, while the others were issued from the personal accounts of the petitioners. He submits that in terms of the letter dated 15.07.2010, it was the petitioners who were to inform the Complainant as to which set of cheques are to be presented in case of default by the petitioners. He submits that the letter further stated that in case the Complainant is not so informed, the Complainant may present the personal cheques of the petitioners. He submits that, however, in either case, both set of cheques could not have been presented by the Complainant for encashment. He submits that the Complainant, however, proceeded to present both sets of cheques, far exceeding the liability owed by the petitioners and the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance were issued to the petitioners. The parties were then referred to Mediation and they tried to explore the possibility of arriving at an amicable settlement, however, the Settlement could not fructify. He submits that thereafter, the Covid-19 pandemic intervened because of which further time was taken to file the present petitions. He submits that, therefore, there is no delay in filing of the present petitions. 30. Mr. Madhav Khurana, learned counsel appearing for the petitioner-Mr. Akash Mishra, while adopting the arguments of Mr. Hrishikesh Baruah, learned Advocate, submits that Mr. Akash Mishra had resigned as a Director of SGPL and SBHPL on 17.04.2012, that is, even before the presentation of the cheques. He submits that, therefore, before the Offence under Section 138 of the NI Act was allegedly committed, Mr. Akash Mishra was not in control of the said Companies and could not have been made liable for the dishonour of the cheques. He submits that even the cheques that were given from personal accounts were, in fact, for and on behalf of the said Companies and could not have been presented for encashment by the Complainant once the said petitioner had resigned from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Prabhu Chawla (Supra); and of this Court in Satish Lamba Anr. v. NCT of Delhi Ors. (Order dated 14.09.2023 in Crl.M.C.4396 of 2023). 34. On merits, he submits that the submissions made by the learned counsels for the petitioners raise disputed questions of facts, which cannot be adjudicated by this Court while exercising its jurisdiction under Section 482 of the Cr.P.C; these disputes are best left to be determined by the Trial Court to adjudicate on after appreciation of evidence led by both the parties. In support, he places reliance on the judgments of the Supreme Court in HMT Watches Ltd. v. M.A. Abida Anr., (2015) 11 SCC 776; Womb Laboratories Pvt. Ltd. v. Vijay Ahuja Anr., 2019 SCC OnLine SC 2086; and, Rathish Babu Unnikrishnan v. State (Govt. of NCT of Delhi) Anr., 2022 SCC Online SC 513 . 35. On merits, he submits that in terms of Clause 4.2 of the SSSA, the Complainant had to exercise his option to offer the shares for buy-back by the petitioners within a period of 27 months. He submits that this option was exercised by the Complainant within the said period vide its notice dated 04.10.2012. He submits that Clause 18.2 of the SSSA relied upon by the petitioners is merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the balance sheet of the SBHPL, which amounts to an admission of debt in terms of the judgment of the Supreme Court in Asset Reconstruction Company (India) Limited v. Bishal Jaiswal Anr., 2021 SCC OnLine SC 321. 40. Countering the submission of the learned counsels for the petitioners that the cheques in question were not issued for the debt or liability in present, but only as security, and, therefore, complaints under Section 138 of the NI Act are not maintainable, the learned counsel for the Complainant, placing reliance on the judgments of the Supreme Court in Dashrathbhai Trikambhai Patel (Supra); Sripati Singh v. State of Jharkhand Anr., 2021 SCC OnLine SC 1002; and Sunil Todi Ors. v. State of Gujarat Anr., 2021 SCC Online SC 1174, submits that the debt or liability is to be considered on the date of presentation of the cheques; if such debt or liability exceeds the amount of the cheques on the said date, a complaint under Section 138 of the NI Act would be maintainable. 41. He submits that in the present case, as the petitioners had failed to buy-back the shares in spite of the notice dated 04.10.2012, the liability accrued, for which the Complainant rightly presented the ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts written into the same Code, such, for instance, in Section 397 (2) of the Cr.P.C.. 46. This Court in Vipin Kumar Gupta (Supra), placing reliance on its earlier judgment in Rajesh Chetwal v. State Neutral Citation no.2011:DHC:4313, held that though there is no period of limitation prescribed for filing of a petition under Section 482 of the Cr.P.C., the principles of inordinate delay and laches shall be applicable, and where such petitions are filed with an inordinate delay and laches, this itself shall be a ground to dismiss the same. 47. The other judgments relied upon by the petitioners on this issue are given on the peculiar facts of the said cases, where the Courts have found that there were compelling circumstances to justify the exercise of the powers under Section 482 of the Cr.P.C.. I do not find any such compelling circumstances being shown in the present set of petitions. 48. In the present case, summons had been issued to the petitioners on the complaints by Orders dated 27.07.2013. Thereafter, in view of the judgment of the Supreme Court in Dashrath Rupsingh Rathod (Supra), these complaints were transferred to the Court of the learned JMFC, Gurugram, Haryana. Even t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Clause 18.2 of the SSSA, that is, inadequate period of notice and not giving of notice to the SGPL. 53. I shall first reproduce the above Clauses of the Agreement. Clause 4 of the SSSA reads as under:- 4. TRANSFER OF SHARES 4.1 Restriction. No Shareholder shall, for a period of six months from the Effective Date, directly or indirectly, sell, transfer, assign, pledge, hypothecate, or otherwise dispose of or encumber any part of or interest in the legal or beneficial ownership, including in the event of the death or bankruptcy of a Shareholder, ( Transfer ) of any Shares to any third party unless such Transfer is in accordance with the terms of this Agreement. Any sale, assignment, transfer, pledge, hypothecation or other encumbrance or disposition of Shares not made in conformance with this Agreement shall be null and void, shall not be recorded on the books of the Company and shall not be recognized by the Company. 4.2 After expiry of the aforementioned period of six months, and within the next 15 months, i.e. upto the expiry of the 21st month, the Investor may give six months notice to SG of its intention to sell its shareholding. After the expiry of the twenty one months, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties and considering their evidence. This question may not be answered at this stage by this Court without letting the parties lead their respective evidence. 57. As regards the plea of the petitioners that the notice is not addressed to SGPL, as noted hereinabove, it is the case of the Complainant that the notice is addressed to the petitioners who were the Directors and Promoters of SGPL and, therefore, in terms of the judgment of this Court in Sarabjit Singh (Supra), which has also been affirmed by the Supreme Court in M Tech Developers Private Limited v. State (NCT of Delhi) Ors. (2019) 14 SCC 806, this would be a deemed notice to the company, that is, the SGPL itself. I, prima facie, find force in the submission of the learned counsel for the Complainant. 58. The liability of the petitioners also arises from their own letter dated 15.07.2010, which, inter alia, obliges them as under: - 3) That, in view of your high sensitivity towards safety and growth of your investment, and our faith in our project as warranted by our representations, the 3 promoters in their individual as also in their official capacities as directors of SG AND SBH has agreed to give you an option of op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the SSSA and the letter dated 15.07.2010 surpasses the amounts mentioned in the cheques. These again are issues to be determined by the learned Trial Courts, and this Court cannot enter into such disputed questions of facts at this stage. 61. In Sunil Todi Ors. (Supra), the Supreme Court has observed as under:- 31. The object of the NI Act is to enhance the acceptability of cheques and inculcate faith in the efficiency of negotiable instruments for transaction of business. The purpose of the provision would become otiose if the provision is interpreted to exclude cases where debt is incurred after the drawing of the cheque but before its encashment. In Indus Airways, advance payments were made but since the purchase agreement was cancelled, there was no occasion of incurring any debt. The true purpose of Section 138 would not be fulfilled, if debt or other liability is interpreted to include only a debt that exists as on the date of drawing of the cheque. Moreover, Parliament has used the expression debt or other liability . The expression or other liability must have a meaning of its own, the legislature having used two distinct phrases. The expression or other liability has a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar that the Court should be slow to grant the relief of quashing a complaint at a pre-trial stage, when the factual controversy is in the realm of possibility particularly because of the legal presumption, as in this matter. What is also of note is that the factual defence without having to adduce any evidence need to be of an unimpeachable quality, so as to altogether disprove the allegations made in the complaint. 17. The consequences of scuttling the criminal process at a pre-trial stage can be grave and irreparable. Quashing proceedings at preliminary stages will result in finality without the parties having had an opportunity to adduce evidence and the consequence then is that the proper forum i.e., the trial Court is ousted from weighing the material evidence. If this is allowed, the accused may be given an un-merited advantage in the criminal process. Also because of the legal presumption, when the cheque and the signature are not disputed by the appellant, the balance of convenience at this stage is in favour of the complainant/prosecution, as the accused will have due opportunity to adduce defence evidence during the trial, to rebut the presumption. 18. Situated thus, to n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the offence of, what may be loosely called dishonour of cheque can be constituted for the purpose of prosecution and punishment. It is held by the Supreme Court in K. Bhaskaran v. Sankaran Vaidhyan Balan, that : 14. The offence under Section 138 of the Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the said offence : (1) drawing of the cheque, (2) presentation of the cheque to the bank, (3) returning the cheque unpaid by the drawee bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice. 35. Different persons can be in-charge of the company when each of the series of acts of commission and omission essential to complete the commission of offence by the company were being committed. To take an example, in the case of a company, A might be in charge of the company at the time of drawing the cheque, B might be in charge of the company at the time of dishonour of cheque and C might be in charge of the company at the time of failure to pay within 15 days of the receipt of the dema ..... X X X X Extracts X X X X X X X X Extracts X X X X
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