2021 (10) TMI 1227 - HC - Indian Laws

Dismissal of Section 138 N.I. Act Petition Emphasizes Trial for Conflicting Interpretations

The High Court dismissed the petition seeking quashing of proceedings under Section 138 N.I. Act, as disputed facts regarding the NEFT transfer and debt ... Dishonor of Cheque - existence of recoverable debt or not - NEFT transfer was made towards the outstanding cheque amount or not - HELD THAT:- The issue as to whether this Court can enter into disputed questions of facts, while exercising powers under Section 482 Cr.P.C., is no longer res integra. The Supreme Court in STATE FARM CORPN. OF INDIA LTD. VERSUS NIJJER AGRO FOODS LTD. AND ORS. [2005 (7) TMI 726 - SUPREME COURT] has taken the following view in respect of exercise of power under Section 482 Cr.P.C. by High Courts where it was held that Whether the said payment has been made or it is towards some of the amounts covered by the cheques are all the questions which can be decided only at the trial of the complaint cases under Section 138 of the Negotiable Instruments Act and could not have been made the basis of allowing the revision petition. Similar view has been taken in S. KRISHNAMOORTHY VERSUS CHELLAMMAL [2015 (3) TMI 1386 - SUPREME COURT], where the Supreme Court held that when there are disputed questions of facts involved, the same would be a matter of trial and cannot be decided in the proceedings under Section 482 Cr.P.C. This Court is of the view that while exercising its power under Section 482 Cr.P.C., it would be expedient for the Court to not go into the disputed questions of fact, the same being a matter of trial - Petition dismissed. Issues:Quashing of proceedings under Section 138 N.I. Act, Maintainability of complaint case, Disputed facts regarding NEFT transfer, Exercise of power under Section 482 Cr.P.C.Quashing of Proceedings under Section 138 N.I. Act:The petitioner sought quashing of proceedings arising from a complaint under Section 138 N.I. Act, contending that the outstanding debt was cleared by an NEFT transfer within the stipulated period after receiving a legal notice. The respondent argued that the NEFT transfer was not timely and did not cover the full debt. The High Court analyzed the facts, including the track consignment report and email communication, to determine the validity of the petitioner's claim. Disputed facts regarding the NEFT transfer and the nature of the payment led to a decision that the matter required trial, and the petition for quashing was dismissed.Maintainability of Complaint Case:The respondent company filed a complaint against the petitioner for dishonoring a cheque, alleging non-payment of a debt despite a legal notice. The petitioner argued that the complaint was not maintainable as the debt had been cleared through an NEFT transfer within the required time frame. The respondent disputed the timeliness and purpose of the NEFT transfer, claiming it did not cover the full debt owed. The Court examined the evidence presented, including the legal notice, NEFT transfer details, and email communication, to determine the validity of the petitioner's defense. The disputed facts led the Court to conclude that the matter should proceed to trial rather than being quashed under Section 482 Cr.P.C.Disputed Facts Regarding NEFT Transfer:The main contention revolved around the NEFT transfer made by the petitioner to settle the debt. The respondent argued that the transfer was untimely and did not cover the full debt amount. The petitioner maintained that the transfer was made within the stipulated period after receiving the legal notice and covered the outstanding liability. The Court examined the evidence, including the track consignment report and email communication, to ascertain the validity of the NEFT transfer claim. Due to conflicting interpretations of the facts, the Court held that the disputed nature of the NEFT transfer required a trial to determine the actual nature and purpose of the payment.Exercise of Power under Section 482 Cr.P.C.:The Court referenced precedents to highlight that when disputed questions of fact are involved, matters should be left for trial rather than being decided under Section 482 Cr.P.C. Citing previous judgments, the Court emphasized that disputed factual defenses should be addressed during trial proceedings, and the inherent power under Section 482 should not be used to preempt trial outcomes. In line with this legal principle, the Court dismissed the petition for quashing, emphasizing that disputed facts should be resolved through trial proceedings rather than summary dismissal.