2019 (2) TMI 1084 - HC - Indian Laws

Legal reminder: Honor issued cheques! Court emphasizes criminal action for dishonored cheques.

Ms. Shashi Adlakha Versus Housing Development Finance Corporation Ltd.

The Court dismissed the petitions seeking quashing of criminal proceedings under Section 138 of the Negotiable Instruments Act, emphasizing the need to ... Dishonor of Cheque - repayment of loan - section 138 of NI Act - Held that:- The offence under Section 138 of the NI Act is an offence in the personal nature of the complainant and since it is within the special knowledge of the accused as to why he is not to face trial under section 138 N.I. Act, he alone has to take the plea of defence and the burden cannot be shifted to complainant. There is no presumption that even if an accused fails to bring out his defence, he is still to be considered innocent. If an accused has a defence against dishonour of the cheque in question, it is he alone who knows the defence and responsibility of spelling out this defence to the Court and then proving this defence is on the accused. In this case, notice under Section 251 Cr.PC. has already been framed against the petitioner and she has pleaded not guilty and claimed trial. An application under Section 145(2) of the NI Act filed by the petitioner was allowed. The Authorized Representative of the complainant has already been cross-examined by the counsel for the petitioner and was discharged. Jurisdiction - Held that:- The Court, in exercise of its jurisdiction under Section 482 Cr.PC. cannot go into the truth or otherwise of the allegations made in the complaint or delve into the disputed question of facts. The issues involving facts raised by the petitioner by way of defence can be canvassed only by way of evidence before the Trial Court and the same will have to be adjudicated on merits of the case and not by way of invoking jurisdiction under Section 482 Cr.PC. at this stage. In the facts of the present case, this Court does not find any material on record which can be stated to be of sterling and impeccable quality warranting invocation of the jurisdiction of this Court under Section 482 Cr.PC at this stage. More so, the defence raised by the petitioner in the petitions requires oral as well as documentary evidence, which cannot be appreciated, evaluated or adjudged in the proceedings under Section 482 of Cr.PC. - The bare assertions of the learned counsel for the petitioner that the petitioner has already paid the amount or the respondent has already received or realized the cheque amount or the cheques are without consideration as well as the other contentions raised in the petitions, are only bald submissions at this stage which are required to be proved by way of oral and documentary evidence on record, by the petitioner. This Court, at this stage, neither can interfere nor can intervene nor can quash the proceedings pending before the Trial Court. Petitions are dismissed with cost of ₹ 5,000/- in each case. Issues Involved:1. Quashing of criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881.2. Jurisdiction and scope of the High Court under Section 482 of the Cr.P.C.3. Procedural aspects and defenses in cases under Section 138 of the NI Act.Issue-wise Detailed Analysis:1. Quashing of criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881:The petitioner sought to quash the criminal proceedings in Criminal Case Nos. 59787/2016 and 59793/2016 under Section 138 of the Negotiable Instruments Act, 1881. The petitioner argued that the entire loan amount had already been paid, and the respondent had not disclosed this fact. Additionally, the petitioner contended that the respondent had not filed relevant documents to justify the summoning order by the Trial Court and that proceedings under Section 138 could only be initiated if the respondent failed to recover the loan amount through auctioning the secured property.The Court emphasized that once a cheque is issued, it must be honored, and if dishonored, the issuer is given an opportunity to pay the amount through a notice. If payment is not made, criminal proceedings are justified. The Court noted that the petitioner had already pleaded not guilty and claimed trial, and the Authorized Representative of the complainant had been cross-examined.2. Jurisdiction and scope of the High Court under Section 482 of the Cr.P.C.:The Court highlighted that it cannot delve into the truth or otherwise of the allegations made in the complaint or resolve disputed questions of facts under Section 482 of the Cr.P.C. The issues raised by the petitioner must be adjudicated based on evidence before the Trial Court. The Supreme Court's decision in Rajiv Thapar & Ors. v. Madan Lal Kapoor was cited, emphasizing that the High Court should exercise caution and circumspection when invoking its inherent jurisdiction under Section 482 of the Cr.P.C. The material produced by the accused must be of sterling and impeccable quality to justify quashing the proceedings.3. Procedural aspects and defenses in cases under Section 138 of the NI Act:The Court discussed the procedural framework under the NI Act, including the provisions for summary trials and the opportunities available to the accused to present their defense. The accused must raise their defense before the Metropolitan Magistrate and can file necessary documents and applications under Section 145(2) of the NI Act to recall witnesses for cross-examination. The Court reiterated that the burden of proving defenses lies with the accused, and the complainant's affidavit regarding cheque issuance, dishonor, and demand notice is sufficient proof unless the accused successfully challenges it.The Court also referred to the Supreme Court's decision in Mandvi Co. Op. Bank Ltd. v. Nimesh B. Thakore, which emphasized the special code for the trial of offenses under Chapter XVII of the NI Act, aimed at expediting the trial process without compromising the accused's right to a fair trial.Conclusion:The Court found no material on record of sterling and impeccable quality warranting the invocation of its jurisdiction under Section 482 of the Cr.P.C. The defenses raised by the petitioner required oral and documentary evidence, which could not be evaluated in proceedings under Section 482 of the Cr.P.C. Therefore, the Court dismissed the petitions with a cost of Rs. 5,000/- in each case, to be deposited in the Prime Minister’s National Relief Fund within two weeks. The Trial Court was directed to consider the petitioner's contentions and defense in accordance with the law.