2017 (3) TMI 1845 - HC - Indian Laws

High Court dismisses application to quash complaint under Section 138, emphasizing need for trial to resolve disputed issues.

The High Court dismissed the application to quash the complaint under Section 138 of the Negotiable Instruments Act, citing disputed factual issues that ... Dishonor of Cheque - Vicarcious Liability - leading of the evidence during the trial - Section 141 of the Negotiable Instruments Act - HELD THAT:- On a similar issue, Hon'ble Supreme Court, in the case of SAMPELLY SATYANARAYANA RAO VERSUS INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LIMITED [2016 (9) TMI 867 - SUPREME COURT], has held whether cheque was given as security or there existed outstanding liability or not is question of fact. Under such conditions, the High Court cannot entertain disputed question of fact under S. 482 CrPC. The High Court needs to exercise power under Section 482 CrPC with great deal of caution. Even though, defence of accused appears to be plausible, but it should not be considered, while exercising power under Section 482 CrPC. In the said case, post dated cheques were issued; as observed by Hon'ble Apex Court, postdated cheques is a well-recognized mode of payment and it depends on each case. While dealing with a quashing petition, the Court has ordinarily to proceed with all the averments in the complaint, defence of the accused cannot be considered at this stage. The Court considering the prayer for quashing, does not adjudicate upon the disputed questions of fact. Therefore, the question has to be answered in favour of the respondent No. 2 and against the applicant - petition dismissed. Issues Involved:1. Application under Section 482 of the Code of Criminal Procedure, 1973 for quashing the complaint under Section 138 of the Negotiable Instruments Act, 1881.2. Applicant's resignation from the company and its impact on liability.3. Specific role and responsibility of the applicant in the alleged offence.4. Disputed facts regarding the issuance of cheques and the applicant's involvement.Detailed Analysis:1. Application under Section 482 of the Code of Criminal Procedure, 1973 for quashing the complaint under Section 138 of the Negotiable Instruments Act, 1881:The applicant sought to quash Criminal Case No. 1244 of 2013 filed before the Metropolitan Magistrate, Ahmedabad, for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The complaint arose from the alleged dishonor of two cheques issued by the accused company, which were returned unpaid due to 'insufficient funds.'2. Applicant's resignation from the company and its impact on liability:The applicant argued that he resigned as a Director from the respondent company on 31st December 2012, and was not responsible for the company's actions at the time the cheques were issued and dishonored. The applicant presented documents, including Form No. 32, to support his resignation. However, discrepancies in the dates on Form No. 32 raised factual disputes that required adjudication during the trial.3. Specific role and responsibility of the applicant in the alleged offence:The applicant contended that the complaint did not clearly allege his specific role in the commission of the offence. He argued that only those in charge of and responsible for the conduct of the company's business at the time of the offence could be held liable. The respondent countered that the applicant was involved in the company's day-to-day affairs when the cheques were issued, making him liable under Section 138 of the Negotiable Instruments Act.4. Disputed facts regarding the issuance of cheques and the applicant's involvement:The respondent argued that the cheques were issued as post-dated security for an Inter Corporate Deposit while the applicant was a Director. The applicant's resignation and the timing of the cheques' issuance were disputed facts that required evidence and could not be resolved in a petition under Section 482 CrPC. The court emphasized that such factual disputes should be adjudicated during the trial.Conclusion:The court dismissed the application for quashing the complaint, stating that the applicant's arguments involved disputed questions of fact that could not be resolved at this stage. The court relied on legal precedents to underline that the High Court should not interfere with criminal proceedings at an initial stage if the complaint prima facie consisted of the essential ingredients of the alleged offence. The court did not find any merit in the petition and vacated the ad interim relief, allowing the trial to proceed where all contentions could be addressed on merits.Parting Note:The court clarified that it had not delved into the merits of the case but only considered the aspect of its entertainability for quashing the complaint. The applicant was granted the liberty to raise all available contentions before the trial court, which would address them in accordance with the law.