2020 (10) TMI 469 - HC - Indian Laws

Court emphasizes trial assessment over Section 482 jurisdiction, dismisses petition alleging coercion and insolvency.

The court declined to quash the proceedings under Section 138 of the Negotiable Instrument Act, emphasizing the importance of trial evaluation over ... Dishonor of Cheque - insufficiency of funds - offences under Section 138 r/w 142 Negotiable Instrument Act - petitioner also filed application for declaring him insolvent - HELD THAT:- The petitioner is an accused in the complaint lodged by the respondent under Section 138 of NI Act. The respondent lodged complaint alleging that the respondent is a manufacturer of crackers and supplying the same to the wholesalers and retailers. The petitioner is being retailer of cracker, purchased the crackers on various dated from the year 2017, thereby the petitioner is liable to pay a sum of ₹ 1,86,00,000/- to the respondent herein. Hence, the petitioner had entered into an agreement on 24.04.2018 and he agreed to pay the due amount. In order to pay the part of the above amount, the petitioner issued cheque for a sum of ₹ 15,00,000/-. The said cheque was present for collection and the same was returned dishonour for the reason that 'Funds insufficient'. It was duly informed to the petitioner herein and after his instruction, the cheque was once again presented for collection. Again it was returned dishonour for the reason that 'Drawer's signature differ'. Therefore after issuing statutory notice, respondent initiated the present proceedings for the offences punishable under Section 138 of NI Act as against the petitioner. Though the petitioner filed petition to declare him as insolvent in I.P.No.5 of 2018, it is no way bared for the respondent to proceed with the complaint for the offences under Section 138 of NI Act. Further, the learned counsel appearing for the petitioner would submit that the alleged cheques were obtained from the petitioner under threat and coercion. However, there is no iota that the cheques were obtained under threat and coercion and also there is no complaint lodged by the petitioner before the police officials regarding the said coercion. Therefore, the present petition is devoid of merits and liable to be dismissed. Petition dismissed. Issues:Petition to quash proceedings under Section 138 of NI Act based on insolvency declaration and coercion in obtaining cheques.Analysis:The petitioner sought to quash proceedings under Section 138 of the Negotiable Instrument Act, contending that despite instructing the respondent not to present a cheque due to insolvency proceedings, the cheque was presented twice and dishonored. The petitioner claimed the cheques were obtained under threat and coercion, but no police complaint was filed. The respondent argued that insolvency proceedings do not bar action under Section 138. The respondent alleged a due amount of Rs. 1,86,00,000, with a cheque of Rs. 15,00,000 dishonored twice. The court noted the absence of coercion complaints and reliance on Supreme Court judgments emphasizing trial evaluation over Section 482 Cr.P.C. jurisdiction.The court referenced Supreme Court judgments, including Devendra Prasad Singh Vs. State of Bihar & Anr., highlighting trial evaluation for inconsistencies and prima facie cases, not under Section 482. Another case, Central Bureau of Investigation Vs. Arvind Khanna, emphasized that the High Court exceeded its jurisdiction by delving into disputed facts under Section 482. Additionally, M.Jayanthi Vs. K.R.Meenakshi & anr reiterated that Section 482 should not delve into evidence validity, focusing on complaint allegations and preconditions for cognizance.In the final ruling, the court declined to quash the proceedings in C.C.No.1487 of 2019, emphasizing the need for trial assessment over Section 482 Cr.P.C. jurisdiction. The petition was dismissed, and connected miscellaneous petitions were closed, aligning with the principles outlined in the referenced Supreme Court judgments.