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TMI Blog2025 (4) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... om, pending before the learned Metropolitan Magistrate-03 (NW), Rohini, Delhi (hereinafter 'petition no. 1'); and ii) CRL. M.C. 8002/2023 is filed challenging and seeking to quash the Complaint Case no. 3298/2019 under Sections 138, 141 and 142 of the Act and the summoning and cognizance order dated 06.03.2019 emanating therefrom, pending before the learned Metropolitan Magistrate-03 (NW), Rohini, Delhi (hereinafter referred to as 'petition no. 2'). 2. For the sake of brevity and convenience, petitioner-Mr. Manoj Goyal in CRL.M.C. 7912/2023 and CRL.M.C. 8002/2023 will be referred to as 'petitioner no. 1.' Petitioner- Ms. Kavita Rani Goyal in CRL. M.C. 7912/2023 and will be referred to as 'petitioner no. 2', and the petitioner-M/s MGI Developers and Promoters in CRL.M.C. 8002/2023 will be referred to as the 'petitioner firm.' AVERMENTS IN THE COMPLAINT CASES 3. In petition no. 1, i.e., CRL.M.C. 7912/2023, the respondent herein filed a complaint dated 25.01.2019 against petitioner no. 1 and petitioner no. 2 for the offences punishable under Sections 138, 141 and 142 of the Act. Averments made in the complaint for the sake of completeness read as under: "*** *** *** 2. That a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... One Thousand Two Hundred Only) and a cheque no.057141, dated 30/09/2018 for Rs. 35,00,000/-(Rupees Thirty Five Lacs Only) but they told the complainant that there are some financial constraints in his firm till first week of December, 2018 but they are issuing two cheques more cheques from their personal bank account towards the personal gurantee i.e. cheque bearing no. 114256, dated 30-09-2018 for Rs. 1,72,21,200/- (Rupees One Crore Seventy Two Lacs Twenty One Thousand Two Hundred Only) and a cheque no. 114257, dated 30/09/2018 for Rs. 35,00,000/-(Rupees Thirty Five Lacs Only) both drawn on Central Bank of India, Sehani Branch, Meerut Road, Gaziabad, U.P., in case the complainant wishes to withdraw his money prior to 15/12/2018 then he can use their personal cheques else after 15/12/2018 money would be realised from the cheques of the firm. 7. That in the terms of the Agreement to sell and discussion dated 30/09/2018, after consultation with accused no. 1, the complainant presented aforesaid cheques on 05/12/2018 i.e. cheque bearing no. 114256, dated 30-09-2018 for Rs. 1,72,21,200/- (Rupees One Crore Seventy Two Lacs Twenty One Thousand Two Hundred Only) and a cheque no. 114257, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid cheques amount as demanded in the said notice. 11. That the accused persons despite of the service of the said notice has failed to remit the payment due under the said cheques and/or this outstanding amount and as such have committed offence under section 138, 141 and 142 of the Banking Public Financial Institution and Negotiable Instrument Act, as amended up to date apart from other offences under other provisions of law. 12. That the cause of action arose at Delhi, where the cheques in question was received, the bank of the complainant falls within jurisdiction of this Hon'ble Court and the amount was also payable at Delhi and the offence has been committed within the jurisdiction of this Hon'ble Court and hence this Hon'ble Court has got the jurisdiction to entertain and try the present complaint. 13. That the cause of action for filing the complaint arose after the expiry of the period of 15 days from the service of the legal notice as the accused have failed to remit the payment demanded in the legal notice against the dishonoured cheques." 4. In petition no. 2, i.e., CRL. M.C. 8002/2023, the respondent herein filed a complaint dated 30.01.2019 again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personal bank account. 6. That when the accused persons could not execute the Sale Deed till 30/09/2018, in the terms of the Agreement to Sell, they in order to discharge their abovesaid liability towards complainant, issued two cheques i.e. cheque bearing no. 057140, dated 30-09-2018 for Rs. 1,72,21,200/- (Rupees One Crore Seventy Two Lacs Twenty One Thousand Two Hundred Only) and a cheque no.057141, dated 30/09/2018 for Rs. 35,00,000/-(Rupees Thirty Five Lacs Only) both drawn on Central Bank of India, Sehani Branch, Meerut Road, Gaziabad, U.P., in favour of complainant to clear his part liability towards the complainant. 7. That in the terms of the Agreement to sell and after consultation with accused no. 2, the complainant presented aforesaid cheques through his banker i.e., ESAF Bank Ltd. Sec. 7, Rohini, Delhi to banker of accused for realisation, but to the utter surprise of complainant aforesaid cheques were dishonoured by the banker of accused for the "Funds Insufficient". The banker of accused accordingly sent their cheque returning memos alongwith aforesaid dishonoured cheques to the banker of complainant. The said cheques and returning memos were sent to complainant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dishonoured cheque." SUBMISSIONS ON BEHALF OF THE PETITIONERS 5.1. Learned Senior Counsel appearing on behalf of the petitioners submitted that the agreement to sell was for a period of 2 years and as per the clause 7c of the said agreement, in case of breach of the agreement, i.e., on failure to hand-over the commercial units to the respondent, a post-dated cheque for a sum of Rs. 35,00,000/- (Rupees thirty five lakhs only) bearing no. 057141 dated 30.09.2018 (hereinafter referred to as the 'appreciation money') was to be encashed by the respondent, over and above Rs. 1,72,21,200/- (Rupees one crore seventy two lakhs twenty one thousands and two hundred) (hereinafter referred to as 'the principal amount',) which was given to the respondent by petitioner no. 1 vide a post-dated cheque bearing no. 057140 dated 30.09.2018. It was submitted that without any liability or debt, the said post-dated cheques have been misused by the respondent. It was further submitted that the respondent has filed 5 complaints against petitioner no. 1, including the present ones. The said complaints are as under: a) Ct. Case No. 3298/2019 for Rs. 1,72,21,200/- crores and Rs. 35,00,000/- lakhs. b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fifty thousands only), whereas petitioner no. 1 had repaid an amount of Rs. 97,00,000/- (Rupees ninety-seven lakhs only) in the names of various family members of the respondent and therefore no liability was existing at the time of presentation of the said cheques. 5.3. Learned Senior Counsel for the petitioners submitted that an arbitration petition bearing no. 273/2023 is already pending before a Coordinate Bench of this Court for alleged violation of the same agreement to sell dated 07.11.2016. On this account, it is submitted that the subject matter of the said agreement is sub judice in the arbitration petition before the said Bench. Learned Senior Counsel for the petitioners submitted that the pendency of the arbitration proceedings and the present complaints are violative of Article 20 of the Constitution of India, leading to multiple prosecutions on the same cause of action. 5.4. It was also argued by learned counsel for the petitioners that the respondent has concealed the filing of other complaints which is contradictory to the law laid down by the Hon'ble Supreme Court in Damodar S. Prabhu vs. Sayed Babalal H. (2010) 5 SCC 663, in which it was held that a complaint u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge." 5.5. Learned Senior Counsel further argued that no specific averment has been made qua petitioner no. 1 in his capacity as the proprietor of the petitioner firm. Reliance was placed on the judgement of the Hon'ble Supreme Court in Ashok Mal Bafna vs. Upper India Steal Manufacturing and Engineering Company Limited (2018) 14 SCC 202 in paragraphs 8 to 10, and 12 and 13. The said reads as under: "8. Interpreting the provisions of Section 141 this Court in National Small Industries Corpn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory requirements as well as settled principles of law before making a person vicariously liable. 13. The superior courts should maintain purity in the administration of justice and should not allow abuse of the process of court. Looking at the facts of the present case in the light of settled principles of law, we are of the view that this is a fit case for quashing the complaint. The High Court ought to have allowed the criminal miscellaneous application of the appellant because of the absence of clear particulars about the role of the appellant at the relevant time in the day-to-day affairs of the Company." 5.6. Learned Senior Counsel with respect to petitioner no. 2 in CRL.M.C. 7912/2023 further submitted that the subject cheques which had been issued were from the joint account of the petitioners. Admittedly, the said cheques had not been signed by petitioner no. 2. It is also an admitted fact that petitioner no. 2 was neither a part of the agreement to sell nor related to the petitioner firm which had entered into an agreement to sell with the respondent. It is submitted that in the above circumstances, petitioner no. 2 has no role to play and could not have been prosecut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t over and above the principal amount in case the petitioner no. 1 failed to adhere to the terms of the agreement to sell dated 07.11.2016. It was submitted that in addition to the said personal guarantee, petitioner no. 1 had undertaken to attach the personal properties of himself as well as of his wife (petitioner no. 2) with the respondent for the payment of the said amount(s). In furtherance of the same, it is submitted that petitioner no. 1 had issued post-dated cheques from his personal account towards the refund of the principal amount and payment of the appreciation amount. 6.4. Learned counsel for the respondent submitted that with respect to the contention of petitioner no. 1 regarding lack of specific averments made in the Complaint Case no. 3928/2019 (subject-matter of petition no. 2) concerning petitioner no. 1, it was pointed out that the cheques in question had been issued on behalf of the petitioner firm, whose sole proprietor was the petitioner no. 1. It was submitted that the proprietorship concern is not a separate legal entity and cannot be distinguished from its proprietor. 6.5. It was submitted on behalf of the respondent that there was no multiplicity of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heques which had been issued by petitioner no. 1 from his personal joint bank account with petitioner no. 2 without waiting to deposit for encashment the other two cheques issued by petitioner no. 1 on behalf of the petitioner firm. The cheques issued by petitioner no. 1 from his personal joint account with his wife, i.e., petitioner no. 2 were submitted by the respondent for encashment on 05.12.2018 and on presentation, the same got dishonoured and the cheques alongwith the return memos were thereafter sent to the respondent by the banker of the petitioner nos. 1 and 2 on 06.12.2018. It is stated in the averments as pointed hereinabove that when the petitioners were apprised about bouncing of the said personal guarantee cheques, they felt sorry and advised the respondent to present the cheques of the petitioner firm and ensured him of honouring of those cheques. The averment is made in the following manner in the Complaint Case no. 2823/2019 (subject-matter of CRL. M.C. 7912/2023) by the respondent: "6. That when the accused persons could not execute the Sale Deed till 30/09/2018, in the terms of the Agreement to Sell, they in order to discharge their abovesaid liability towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es." (emphasis supplied) However, in respect to Complaint Case no. 3298/2019, which is the subject-matter of CRL.M.C. 8002/2023, the averments with respect to the subject cheques as pointed hereinabove does not mention anything about the presentation of the cheques issued by petitioner no. 1 in terms of his personal guarantee to the respondent. It is noted that the cheques issued by petitioner no. 1 from his personal bank account were returned to the respondent by the bank of the petitioners on 06.12.2018 and the complaint was filed before the learned Metropolitan Magistrate on 25.01.2019. Further, with respect of cheques issued by petitioner no. 1 on behalf of the petitioner firm, the same were returned alongwith the memos by the bank on 17.12.2018 and complaint with respect to the same was filed on 30.01.2019. Despite the fact that the complaint with respect to the cheques issued by petitioner no. 1 on behalf of the petitioner firm was filed later, there was no mention in the said complaint of the cheques issued by petitioner no. 1 from his personal bank account and their dishonour. The relevant portion of the complaint is as under: "5. That the accused no. 2 and his wife Smt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantee for discharge of the liability. In these circumstances, the respondent cannot be permitted to present the other set of cheques issued from the bank account of the petitioner firm again for the same transaction. In these circumstances, in the considered opinion of this Court, continuance of proceedings in Criminal Complaint no. 3298/2019 (subject matter of CRL.M.C. 8002/2023) would be an abuse of process of law and therefore, in the interest of justice, exercise of powers under Section 482 of the Cr.P.C. by this Court is warranted in the present case. 11. So far as the liability of petitioner no. 1 with respect to the cheques issued from his personal bank account, i.e., cheque nos. 114256 and 114257 dated 30.09.2018 (subject matter of CRL.M.C. 7912/2023,) the same would be covered by Section 139 of the Act, which reads as under: "139. Presumption in favour of holder.-It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability." The contention on behalf of the learned Senior Counsel for petitioner no. 1 with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Banumathi:- "22. .............. When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the NI Act ought not to have been quashed by the High Court by taking recourse to Section 482 CrPC. Though, the Court has the power to quash the criminal complaint filed under Section 138 of the NI Act on the legal issues like limitation, etc. criminal complaint filed under Section 138 of the NI Act against Yogeshbhai ought not to have been quashed merely on the ground that there are inter se disputes between Appellant 3 and Respondent 2. Without keeping in view the statutory presumption raised under Section 139 of the NI Act, the High Court, in our view, committed a serious error in quashing the criminal complaint in CC No. 367 of 2016 filed under Section 138 of the NI Act." 13. Bearing in mind the principles for exercise of jurisdiction in a proceeding for quashing, let us now turn to the materials in this case. On careful reading of the complaint and the order passed by the Magistrate, what is discernible is that a possible view is taken that the cheques drawn were, in discharge of a debt for purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against and punished accordingly. Explanation.-For the purposes of this section, - (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm." It is pertinent to note that petitioner no. 2 was neither a part of the proprietorship firm which entered into the agreement to sell nor a party to any of the proceedings; and was also not a signatory on the document of guarantee executed by petitioner no. 1. The said document for sake of completeness is reproduced as under: "PERSONAL GUARANTEE I, Manoj Kumar Goyal S/o Late Sh. Satish Chand R/o Mata Wali Gali, Dankaur, Gautam Budh Nagar hereby confirm and declare that notwithstanding anything herein contained and have agreed irrevocable personal guarantee in case M/s. MGI Developers & Promoters fails to comply the terms and conditions agreed in the agreement dated 07-11-2016 between M/s. MGI Developers & Promoters And Mr. Sumit Bansal S/o shri K. L. Bansal R/o 131, Pocket-G-4, Sector-11, Rohini, Delhi-110085 for the maturity amount of Rs. 2,07,21,200/- (Rupees Two Crore Seven Lacs Twenty One Thousand Two Hundred Only) If t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of issuance of cheque from joint accounts, a joint account-holder cannot be prosecuted unless the cheque has been signed by each and every person who is a joint account-holder. The said principle is an exception to Section 141 of the NI Act which would have no application in the case on hand. The proceedings filed under Section 138 cannot be used as arm-twisting tactics to recover the amount allegedly due from the appellant. It cannot be said that the complainant has no remedy against the appellant but certainly not under Section 138. The culpability attached to the dishonour of a cheque can, in no case "except in case of Section 141 of the NI Act" be extended to those on whose behalf the cheque is issued. This Court reiterates that it is only the drawer of the cheque who can be made an accused in any proceeding under Section 138 of the Act. Even the High Court has specifically recorded the stand of the appellant that she was not the signatory of the cheque but rejected the contention that the amount was not due and payable by her solely on the ground that the trial is in progress. It is to be noted that only after issuance of process, a person can approach the High Court seek ..... X X X X Extracts X X X X X X X X Extracts X X X X
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