2023 (2) TMI 1445 - HC - Indian Laws

Section 138 Negotiable Instruments Act complaint: quashing rejected after only prima facie review; partner liability left for trial.

The High Court held that quashing jurisdiction permits only prima facie evaluation of the complaint and supporting documents and does not allow ... Negotiable Instruments Act - Dishonour of cheque - Pleadings u/s 141 - Scope of exercise of High Court's jurisdiction u/s 482 CrPC (no mini-trial) - Admissibility and evidentiary value of annexures in a Section 482 petition - Validity of cheques after bank merger and question of prima facie proof - HELD THAT:- It is contended that on the date of presentation of cheques in question, the said cheques were not valid and the same were liable to be returned; however due to the connivance of the respondent-complainant (company) with the bank officials, they were declared valid and were dishonoured on the ground of “insufficient funds” and accordingly, the complaint under Section 138 of the Negotiable Instruments Act was filed by the respondent-complainant (company). The contention of the petitioner that cheques in question were issued for a different purpose and were misused by the respondent, however, in my considered view, this contention would be again a matter of trial as the petitioners herein have taken a stand, which is different from the stand taken by the respondent complaint in its complaint under Section 138 of the Negotiable Instruments Act. Although, learned counsel for the petitioners has placed reliance upon various annexures to substantiate his arguments that the cheques in question, were required to be returned; however, in my considered view, all such annexures would also be required to be proved in accordance with law. It is well settled law that the annexures attached with the petition filed under Section 482 of the Code of Criminal Procedure, cannot be considered as evidence so as to be relied upon. No merit in the instant petition and the same is accordingly dismissed. However, nothing stated here-in-above shall be construed as an expression of opinion on the merits of the case. Issues: (i) Whether the complaint under Section 138 of the Negotiable Instruments Act and the summoning order should be quashed under Section 482 of the Code of Criminal Procedure; (ii) Whether petitioner No.3 (a partner) can be summarily excluded from proceedings on the basis of the pleadings and documents placed before the High Court.Issue (i): Whether the complaint under Section 138 NI Act and the summoning order should be quashed under Section 482 CrPC.Analysis: The material on record includes the complaint, the preliminary affidavit and documents relied upon by the complainant and the summoning order. The jurisdiction under Section 482 CrPC permits evaluation of material to the extent of satisfying prima facie grounds for proceeding but does not allow appreciation of evidence or conducting a mini-trial. Defences and documentary assertions which require proof at trial cannot be finally adjudicated at the quashing stage.Conclusion: The petition seeking quashment of the complaint and the summoning order is dismissed; the question of validity/use of the cheques and allied factual disputes are to be raised and tested at trial.Issue (ii): Whether petitioner No.3 (a partner) can be summarily excluded from proceedings on the basis that she is not involved in day-to-day business.Analysis: The complaint contains averments that the accused are managing the affairs of the partnership and a partnership deed on record shows profit/loss sharing and remuneration for both partners. These averments satisfy the pleadings required by Section 141 NI Act to place a partner within the scope of proceedings; factual determination of actual participation and responsibility is for trial.Conclusion: The plea to exclude petitioner No.3 is rejected at this stage; liability of the partner is a matter for trial.Final Conclusion: The High Court declines to quash the complaint or the summoning order and directs that the disputed factual and evidentiary questions proceed to trial.Ratio Decidendi: When exercising jurisdiction under Section 482 CrPC to quash criminal proceedings, the court may examine material to the extent of prima facie satisfaction but must not appreciate evidence or decide factual disputes that require trial; pleadings satisfying Section 141 NI Act are adequate to proceed against partners.