TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 849
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.... Act, 1881 (hereinafter referred to as the NI Act") was ordered to be registered and process under Section 204 of Cr.P.C. was ordered to be issued against the applicants herein and have also prayed to quash and set aside all the consequential proceedings initiated under Criminal Case No.16873 of 2019. 2. The facts in brief are as under; The applicant No.1 herein is a Company registered under the Companies Act, 1956 and having its Registered Office at "Dashrathvadi, Court Road, Naidad". It is engaged in the business of production of Grey Cast Iron and Nodular Iron (Ductile Iron) castings weighing from 5 Kgs to 150 Kgs and is also a supplier of fully finished parts to Original Equipment Manufacturers since the year 1956. The factory premises of applicant No.1 Company is located at Nadiad and it employs around 1500 workers. The respondent No.2 herein is a Partnership Firm registered under the provisions of the Indian Partnership Act and is engaged in the business of manufacture of Casting Parts. It also accepts orders and manufacturers casting parts as per requirements of different customers. 2.1 It appears that the parties were into business relations for several years. However, i....
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....061/- before the civil Court within the stipulated period and to furnish appropriate security to the satisfaction of the civil Court for the remaining amount. As the applicant No.1 Company failed to make such deposit, the respondent-complainant instituted execution petition being Special Execution Petition No.24 of 2015 before the civil Court at Rajkot and upon transfer of the petition to the Commercial Court, it was re-numbered as Execution Petition No.10 of 2019. 2.4 In the execution proceedings, the respondent-plaintiff moved application Exhibit-11 seeking issuance of warrant for the attachment of the movable / immovable properties of applicant No.1 Company. Before the said application was decided, the respondent-plaintiff moved another application vide Exhibit-15 seeking identical relief. It appears that the civil at Rajkot allowed application Exhibit-15 ex-parte vide order dated 22.03.2016 directing issuance of a Warrant of Attachment against the applicant No.1 Company. On the same day, the civil Court also passed an order disposing of the application Exhibit-11 by observing that in spite of the service of application on applicant No.1 Company, no reply had been filed by appl....
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....e. It is also recorded that the said Deed of Undertaking was executed at the free will of the parties and without any coercion. 2.6 It appears that against the Warrant of Attachment, the applicant No.1 Company had preferred Special Civil Application No.7417 of 2016 before this Court. The said petition came to be disposed of by the coordinate Bench of this Court vide order dated 18.11.2016. Paragraphs - 4 to 6 of the order reads thus: "4. In light of the statement made at bar, order dated 22.03.2016 passed by the learned 12th Additional Senior Civil Judge, Rajkot below Exh.15 in Special Execution Petition No.24 of 2015 is hereby quashed and set aside and the learned Executing Court is directed to decide application Exhs.11 and 15 afresh and pass appropriate order after hearing both sides. So far as request to return the amount of cheque is concerned, the said request is kept open to be agitated before the learned Executing Court. The learned Executing Court is directed to consider such request while deciding application Exhs.11 and 15 afresh. Meanwhile, the respondent shall not deposit the cheques issued by the petitioner for execution of decree till final disposal of application....
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....motion to transfer it for execution to any subordinate court of competent jurisdiction. Sub-section (2) confers a suo motu power to assign a decree for execution of its own motion to any subordinate court. The exercise of the power under sub-section (2) of Section 39 of the Code, to send the decree for execution to a subordinate court can be exercised without meeting the requirements of sub-clauses (a) to (d) under subsection (1) of Section 39 of the Code. 35. Mr.Pandya, the learned counsel appearing for the respondent, submitted that he would advise his client to prefer an appropriate application at the earliest under Section 39 of the Code for transfer of the decree. If any such application is preferred, the court concerned shall pass appropriate order at the earliest after giving opportunity of hearing to the other side. 36. With the above, this petition is disposed of. Rule made absolute to the aforesaid extent." 2.8 It appears that the respondent-complainant presented the cheque of Rs. 69,62,879/- bearing No.807621 drawn on Standard Chartered Bank, Mithakali Six Roads Branch, Ahmedabad with the Bank on 06.09.2019. However, the cheque got returned on 07.09.2019 with the en....
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....pplicant No.1 Company, in respect of which the Warrant of Attachment was issued, are situated in District Nadiad, which does not fall within the jurisdiction of the Court of learned Principal Senior Civil Judge at Rajkot as both the places fall under different jurisdictions. Only the civil Court situated at Nadiad would have the jurisdiction to pass an order of issuance of Warrant of Attachment against the applicant No.1 Company. Hence, the order directing issuance of Warrant of Attachment against the applicant No.1 Company was illegal and erroneous. 3.2 It was urged by learned Senior Advocate Mr. Lakhani that it was in pursuance of the aforesaid Warrant of Attachment that applicant No.2 had issued the cheque in question in favour of the respondent-complainant. It was pointed out that this Court has passed detailed orders on the legality of the Warrant of Attachment issued by the civil Court at Rajkot in Special Civil Application No.7417 of 2016 and Special Civil Application No.15137 of 2019. Now, when the order directing issuance of Warrant of Attachment itself is found to be illegal, all consequential proceedings would be rendered unsustainable. Hence, the entire proceedings und....
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....t and therefore, the dishonor of the cheque in question would fall under Section 138 of the NI Act. Therefore, the cheque would represent the outstanding liability. He submitted that the applicants will have to adduce necessary evidence in trial to show that the cheque in question was not issued against any enforceable debt and the present proceedings under Section 482 of Cr.P.C. is not the appropriate remedy. He, therefore, prayed that the present application deserves to be rejected. 4.3 In support of his submissions, learned advocate Mr. Pandya placed reliance upon the decision of Apex Court in the case of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited, (2016) 10 SCC 458 more particularly, on the observations made in paragraphs - 9 and 13 to 16, which reads thus: "9. We have given due consideration to the submission advanced on behalf of the appellant as well as the observations of this Court in Indus Airways (supra) with reference to the explanation to Section 138 of the Act and the expression "for discharge of any debt or other liability" occurring in Section 138 of the Act. We are of the view that the question whether a postdated cheque is ....
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....8) 13 SCC 678], this Court has made the following observations explaining the parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure: (SCC pp. 685-87, paras 17 & 22) "17. The parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure is now well settled. Although it is of wide amplitude, a great deal of caution is also required in its exercise. What is required is application of the well- known legal principles involved in the matter. *** 22. Ordinarily, a defence of an accused although appears to be plausible should not be taken into consideration for exercise of the said jurisdiction. Yet again, the High Court at that stage would not ordinarily enter into a disputed question of fact. It, however, does not mean that documents of unimpeachable character should not be taken into consideration at any cost for the purpose of finding out as to whether continuance of the criminal proceedings would amount to an abuse of process of court or that the complaint petition is filed for causing mere harassment to the accused. While we are not oblivi....
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....e does not appear any controversy on the issue that the Registered Office of applicant No.1, which is a Company incorporated under the Companies Act, is situated in District : Nadiad. The applicant No.1 Company is also having its factory premises in District : Nadiad. The respondent-complainant filed Special Summary Suit No.23 of 2014 before the Court of learned Civil Judge, Senior Division, Rajkot against applicant No.1 Company for recovery of an amount of Rs. 1,12,26,500/- with interest. The said suit came to be decreed in favour of the respondent plaintiff vide judgment and order dated 07.05.2015. Against the said judgment and decree, the applicant No.1-defendant preferred First Appeal No.1730 of 2015 before this Court along with an application seeking interim stay of the judgment and decree. While admitting the said first appeal vide order dated 29.01.2016, the Division Bench of this Court granted interim relief in favour of applicant No.1-Company by staying operation and implemention of the judgment and decree dated 07.05.2015 on condition that applicant No.1-Company deposits an amount of Rs. 43,40,061/- before the trial Court within the stipulated period and to furnish approp....
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....ecution was passed by the competent Court at Rajkot whereas, warrant issued by the learned trial Judge as per order dated 22.03.2016 came to be executed for attachment of movable/immovable properties situated at Nadiad. Thus, considering the provisions of Section 39(4) of the Code of Civil Procedure, the learned Executing Court is not authorized to issue such warrant for executing the decree against any property outside the local limits of its jurisdiction. Admittedly, warrant issued pursuant to application Exh.15 came to be executed in respect of properties situated at Nadiad and, therefore, present petition deserves consideration. Hence, issue notice to the respondent for final disposal, making it returnable on 26.07.2016. Meanwhile, adinterim relief in terms of para 18(B) is granted. Direct service is permitted. The learned advocate for the petitioner is permitted to file additional documents with the Registry of this Court. 7.1 The aforesaid writ petition was disposed of by the learned Single Judge of this Court vide order dated 18.11.2016. The relevant paragraphs of the order reads as under: "2. Learned advocate Mr.Nilesh Pandya appearing for learned advocate Mr.H.H. Patel ....
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....16, it is clear that the executing Court at Rajkot was required to adjudicate both the applications Exhibits 11 and 15 afresh. It was specifically brought to the notice of the executing Court at Rajkot that the decree under execution was passed by the civil Court at Rajkot whereas, the warrant has been issued for attachment of movable / immovable properties situated at Nadiad, which the executing Court at Rajkot was not legally authorized to do. Issuance of warrant of attachment in respect of any property situated outside the local limits of jurisdiction is barred in view of the provisions of Section 39(4) of the Code of Civil Procedure and hence, the executing Court at Rajkot was directed to examine the matter afresh. This Court had also directed the executing Court at Rajkot to pass appropriate orders for the refund of cheque amounts realized while executing the order dated 22.03.2016 and also to return the unrealized cheques to applicant No.1-Company. 7.3 It was in the aforesaid background that the executing Court at Rajkot was required to consider applications Exhibits - 11 and 15 preferred in Execution Petition No. 10 of 2019 afresh. However, while considering the matter afre....
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.... of Undertaking dated 07.04.2016 in the presence of the Court Bailiff, as baseless because the very source of the issuance of the Warrant of Attachment being the orders passed below applications Exhibits - 11 & 15 have been quashed and set aside by this Court in both rounds of litigation. When the orders below applications Exhibits - 11 & 15 have been quashed and set aside by this Court, the Warrant of Attachment and all consequential proceedings, including the Deed of Undertaking dated 07.04.2016, would not have any legal basis. 11. Coming to the proceedings initiated under the NI Act, itis not in dispute that the cheque in question was given as 'security'. The Deed of Undertaking dated 07.04.2016 executed by and between the parties in the presence of the Court Bailiff lays down the terms and conditions of payment. It specifically mentions that the cheque in question has been been given as 'security' and also lays down the conditions as to when the said cheque shall be deposited. It is a settled proposition of law that proceedings under Section 138 of the NI Act would lie only in respect of any 'enforceable debt'. 11.1 In the case of Lalit Kumar Sharma v. State of Uttar Pradesh,....