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Wednesday, February 12, 2014

Sec.482 of Cr.P.C - quashing of criminal proceedings under sec.420 I.P.C - Business Transaction - issued cheques - cheques bounced - Complaint under NI act was dismissed as the cheque was not issued by Accused - complaint under sec.420 - police referred as a civil dispute - but court take Cognizance - Petition to Quash the same - High court refused to act - apex court confirmed the same -whether the allegations in the complaint discloses a criminal offence or not is the only to be considered but not the opinion of the police or the documents in the custody of accused which are useful for cross examination = VIJAYANDER KUMAR & ORS. ... APPELLANTS VS. STATE OF RAJASTHAN & ANR. ... RESPONDENTS = 2014 ( Feb.Part) judis.nic.in/supremecourt/filename=41215

Sec.482 of Cr.P.C -  quashing of criminal proceedings under sec.420 I.P.C - Business Transaction - issued cheques - cheques bounced - Complaint under NI act was dismissed as the cheque was not issued by Accused - complaint under sec.420 - police referred as a civil dispute - but court take Cognizance - Petition to Quash the same - High court refused to act - apex court confirmed the same -whether  the  allegations  in  the  complaint discloses a criminal offence or not is the only to be considered but not the opinion of the police or the documents in the custody of accused which are useful  for cross examination =

all the accused  by  mutual  consent  (conspiracy)
have played a fraud and cheated him by making false statement  and  holding
false assurances whereby they induced him to sign some papers.   Allegedly,
the accused had full knowledge even before issuing the cheques  that  these
shall not be honoured and  they  had  such  dishonest  intention  from  the
beginning.=
It is not in dispute that when  the  cheque  bounced,  the  respondent
no.2 gave a legal notice and initiated a separate  complaint  under  Section
138 of the Negotiable Instruments Act, 1881, besides lodging of the  present
FIR on 28.4.1998.
The complaint filed  against  the  appellants  under  the
Negotiable Instruments Act stands quashed by the High  Court  on  the  basis
that they had not issued the cheques in question.
Subsequently, the police concluded investigation and submitted  final
report to the effect that the case is of civil nature.  
The  learned  Chief
Judicial Magistrate, Sriganganagar, rejected the  final  report  and  after
hearing the parties took cognizance of the offence under Section  420  read
with Section 120-B of the IPC  against all the five accused vide his  order
dated 22.05.2000. 
Quashing of criminal proceedings - High court refused to interfere and Apex court confirmed the same 

2014 ( Feb.Part) judis.nic.in/supremecourt/filename=41215
P SATHASIVAM, RANJAN GOGOI, SHIVA KIRTI SINGH
                         
     REPORTABLE


                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION

            CRIMINAL APPEAL NO. 1297 OF 2004


      VIJAYANDER KUMAR & ORS.          ... APPELLANTS

                       VS.

STATE OF RAJASTHAN & ANR.                ... RESPONDENTS




                               J U D G M E N T




SHIVA KIRTI SINGH, J.


      The appellants have preferred this appeal against  the  dismissal  of
their petition under Section  482  of  the  Criminal  Procedure  Code  (for
brevity `Cr.P.C.’) by  the  High  Court  of  judicature  for  Rajasthan  at
Jodhpur.  The High Court declined to interfere with the  order  of  learned
Chief Judicial Magistrate, Sriganganagar,  dated  22.05.2000  in  Case  No.
63/2000, taking cognizance of offence under Section 420 read  with  Section
120-B of the Indian Penal Code.

2.    Respondent No.2, Surendra Singhla, lodged a police case  against  the
appellants as well as one Satish Singhla on 28.04.1998.  According  to  the
averments and allegations in the written report, the informant is a partner
of the Firm M/s. Rajshree Cotton  Corporation,  Sriganganagar,  working  as
broker as well  as  dealer  in  the  sale  and  purchase  of  cotton.   The
appellants are Directors of M/s.  R.P.  Taxfab  Limited,  Modi  Nagar,  who
purchased cotton through informant firm from  time  to  time.  As  per  the
accounts, the informant firm was to receive  a  sum  of  Rs.47,28,115.80/-.
The accused persons without taking the informant into  confidence,  entered
into an agreement for transfer of management,  assets  and  liabilities  of
M/s. R.P. Taxfab Limited in favour of accused Satish Singhla and two others
who  became  the  new  Directors.
The  management  of  the  Company   was
transferred on 24.02.1998 and on 27.02.1998 the informant was called by the
appellants and told that the outstanding amount payable by  the  appellants
shall be paid by the new Directors.  The informant did not agree  to  this.
On next date, the appellants through  a  demand  draft  for  Rs.10,00,000/-
(rupees ten lacs) and returned  cotton yarn  worth  Rs.13,26,560/-  settled
the dues in part and for the remaining dues they persuaded the informant to
accept four post-dated cheques issued by the new Director  Satish  Singhla.
The informant accepted the cheques on being assured by the accused  persons
that when presented on due dates the cheques shall be  honoured.   On  such
persuasion and trust, the informant signed some typed papers  showing  that
he had agreed to receive the balance amount from the new Directors  of  the
Company and had received draft and goods from the appellants.

3.    Besides the  aforesaid  allegations  and  averments  in  the  written
information, the informant has also alleged that he would not  have  signed
the said papers nor received the post-dated cheques but for the  assurances
given by the accused persons in presence of two witnesses.  It  is  further
alleged that when the informant presented cheque dated 25.03.1998 for a sum
of Rs.5,00,000/- (rupees five lacs) through his bank, the said  cheque  was
dishonoured because accused Satish Singhla  had  got  the  payment  of  the
cheque stopped and  that all the accused  by  mutual  consent  (conspiracy)
have played a fraud and cheated him by making false statement  and  holding
false assurances whereby they induced him to sign some papers.   Allegedly,
the accused had full knowledge even before issuing the cheques  that  these
shall not be honoured and  they  had  such  dishonest  intention  from  the
beginning.

4.    It is not in dispute that when  the  cheque  bounced,  the  respondent
no.2 gave a legal notice and initiated a separate  complaint  under  Section
138 of the Negotiable Instruments Act, 1881, besides lodging of the  present
FIR on 28.4.1998.
The complaint filed  against  the  appellants  under  the
Negotiable Instruments Act stands quashed by the High  Court  on  the  basis
that they had not issued the cheques in question.
The  appellants’  earlier
petition under Section 482 of the Cr.P.C. for quashing of FIR vide  Criminal
Miscellaneous Petition No. 466 of 1998 was dismissed by the  High  Court  by
order dated 12.02.1999 which is reported in 1999 Criminal law  Journal  1849
(Vijayander  Kumar and Ors. Vs. State of Rajasthan and Another).
A  perusal
of that judgment discloses that the High  Court  considered  in  detail  the
averments and allegations in the FIR and came  to  the  conclusion  that  in
view of allegations and attending circumstances, at that stage  it  was  not
possible to hold that the appellants cannot be liable for commission of  any
offence.  The High Court held that there was a case worth investigation.

5.    Subsequently, the police concluded investigation and submitted  final
report to the effect that the case is of civil nature.  The  learned  Chief
Judicial Magistrate, Sriganganagar, rejected the  final  report  and  after
hearing the parties took cognizance of the offence under Section  420  read
with Section 120-B of the IPC  against all the five accused vide his  order
dated 22.05.2000.

6.    The challenge to that order through a petition under  Section  482  of
the Cr.P.C. has been rejected by the High Court by the order under Appeal.

7.    Learned senior counsel for the appellants drew our attention to  some
letters and  communications  such  as  annexure  P.1  and  P.2  both  dated
27.02.1998 and annexure P.10 dated 24.02.1998  to  support  his  contention
that on 24.02.1998 itself the change in the management was brought  to  the
notice  of  the  informant  with  an  intimation  that   a   liability   of
Rs.23,00,000/- (rupees twenty three lacs) has been transferred to  the  new
management which they shall pay and thereafter, on 27.02.1998 the informant
received payment from the appellants as well  as  accepted  the  post-dated
cheques on 27.02.1998 itself.  On that basis it  has  been  contended  that
wrong averments and allegations have been made in the FIR.  It  is  further
case of the appellants that the allegations and averments do not  make  out
any criminal offence.

8.    On behalf of the appellants reliance has been  placed  upon  judgments
of this Court in the case of Thermax Limited and Others  Vs.  K.M.Johny  and
Others[1]  and in case of  Dalip  Kaur  and  Others  vs.  Jagnar  Singh  and
another[2].  There can be no dispute with the legal  proposition  laid  down
in the case of Anil Mahajan vs. Bhor Industries Limited[3]  which  has  been
discussed in paragraph 31 in the case of Thermox  Limited  (supra)  that  if
the complaint discloses only a simple case  of  civil  dispute  between  the
parties and there is an absolute absence of requisite averment to  make  out
a case of cheating, the criminal proceeding can be quashed.  Similar is  the
law noticed in the case of Dalip Kaur (supra). 
In this case the  matter  was
remanded back to the High Court because  of  non-consideration  of  relevant
issues as noticed in paragraph 10, but the  law  was  further  clarified  in
paragraph 11 by placing reliance upon judgment of this  Court  in  R.Kalyani
vs. Janak C.Mehta[4].  It  is  relevant  to  extract  paragraph  11  of  the
judgment which runs as follows:
                  “11.There cannot furthermore be any doubt that the  High
      Court would exercise its inherent jurisdiction only when one or  the
      other propositions of law, as laid down in R. Kalyani  v.  Janak  C.
      Mehta is attracted, which are as under:


                 “(1) The High Court  ordinarily  would  not  exercise  its
           inherent jurisdiction to quash a  criminal  proceeding  and,  in
           particular, a first information report  unless  the  allegations
           contained therein, even if given face  value  and  taken  to  be
           correct in their entirety, disclosed no cognizable offence.


                 (2) For the said purpose the Court,  save  and  except  in
           very exceptional circumstances, would not look to  any  document
           relied upon by the defence.


                 (3) Such a power should be exercised very  sparingly.   If
           the allegations made  in  the  FIR  disclose  commission  of  an
           offence, the court shall not go beyond  the  same  and  pass  an
           order in favour of the accused to hold absence of any  mens  rea
           or actus reus.


                 (4) If the allegation discloses a civil dispute, the  same
           by  itself  may  not  be  ground  to  hold  that  the   criminal
           proceedings should not be allowed to continue.”



9.    Learned senior counsel for the appellants also  placed  reliance  upon
judgment of this Court in the case of  Devendra  and  Others  vs.  State  of
Uttar Pradesh and Another[5], only  to  highlight  that  a  second  petition
under Section 482 of  the  Cr.P.C.  can  be  entertained  because  order  of
Magistrate taking cognizance gives rise to  a  new  cause  of  action.  This
issue does not require any deliberation because learned senior  counsel  for
the respondent no.2, the informant, has not  raised  any  objection  to  the
maintainability of petition under Section 482 of the Cr.P.C.

10.   Contra the submission advanced on behalf of  the  appellants,  learned
counsel for the respondent no.2 has submitted that there is no merit in  the
contention advanced on behalf of the appellants that the FIR discloses  only
a civil case or that there  is  no  allegation  or  averment  making  out  a
criminal offence. 
For that purpose he  relied  upon  judgment  of  the  High
Court rendered in the facts of this very case reported in 1999 Criminal  Law
Journal, 1849, already noted earlier.

11.   No doubt, the views of the High Court  in  respect  of  averments  and
allegations in the FIR were in the context of a  prayer  to  quash  the  FIR
itself but in the facts of this case those  findings  and  observations  are
still relevant and they do not support the  contentions  on  behalf  of  the
appellants.
At the present stage when  the  informant  and  witnesses  have
supported the allegations made in the FIR, it would not be proper  for  this
Court to evaluate the merit of the allegations on  the  basis  of  documents
annexed with the memo of appeal. Such  materials  can  be  produced  by  the
appellants in their defence in accordance with law for due consideration  at
appropriate stage.

12.   Learned counsel for the respondents is correct in contending  that  a
given set of facts may make out a civil wrong as also  a  criminal  offence
and  only  because  a  civil  remedy  may  also   be   available   to   the
informant/complainant that itself cannot be a ground to  quash  a  criminal
proceeding. 
The real test is  whether  the  allegations  in  the  complaint
discloses a criminal offence or not.   This  proposition  is  supported  by
several judgments of this Court as noted in paragraph 16 of judgment in the
case of Ravindra Kumar Madhanlal Goenka and Another vs. Rugmini Ram  Raghav
Spinners Private Limited[6]

13.   On considering the facts of the present case it  is  found  that  the
facts were properly noticed by the High Court  on  earlier  occasion  while
examining the petition preferred by the appellants for quashing of  FIR  of
this case.  The same view has been reiterated by  the  High  Court  in  the
order under appeal for not interfering with the order of cognizance by  the
learned Magistrate.  Hence, we do not find any  good  ground  to  interfere
with the criminal proceedings against the appellants  at  this  stage.  The
appeal is, therefore, dismissed.  No costs.

14.   It is, however, made clear that observations in this order or in  the
order under appeal are only for deciding the issues raised at  the  present
stage and shall not affect the defence of the appellants  at  a  subsequent
stage of the proceeding.




                                  ……………………………………………C.J.I.
                                    (P. SATHASIVAM)






                                    ……………………………………………………J.
                                    (RANJAN GOGOI)






                                    ……………………………………………………J.
                                    (SHIVA KIRTI SINGH)
New Delhi;
February 11, 2014.
-----------------------
[1]    (2011)  13 SCC 412
[2]    (2009) 14 SCC 696
[3]    (2005) 10 SCC 228
[4]    (2009) 1 SCC 516
[5]    (2009) 7 SCC 495
[6]    (2009) 11 SCC 529

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