IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 18.07.2008 CORAM THE HONOURABLE MR. JUSTICE K.N. BASHA Crl.O.P.No.29554 of 2004 M.P.No.9269 of 2004 1.G.Murugan 2.G.Ganesan .. Petitioners/Accused Vs. M/s.Cholamndalam Investment Finance Company Limited, TIAM House, 28, Rajaji Salai, Chennai - 600 001, Represented by its Legal Co-ordinator Mr.M.K.Hem Kumar .. Respondent/Complainant * * * Prayer : Criminal Original Petition filed under Section 482 of Cr.P.C. to call for the records from the Hon'ble VII Magistrate Court, George Town, Chennai, relating to the petition filed in C.C.No.11486 of 2003 on the file of VII Metropolitan Magistrate's Court, George Town, Chennai and quash the same. * * * For Petitioners: Mr.K.M.Venugopal For Respondent : Ms.R.Sudha, Legal Aid Counsel O R D E R The learned counsel for the petitioners submitted that the petitioners have come forward with this petition seeking for the relief of quashing the proceedings initiated against the petitioners in C.C.No.11486 of 2003 on the file of the learned VII Metropolitan Magistrate, George Town, Chennai, on the basis of the complaint preferred by the respondent for the alleged offence under Section 138 of the Negotiable Instruments Act. https://hcservices.ecourts.gov.in/hcservices/ 2. It is contended that admittedly there was a hire-purchase agreement for the purchase of a vehicle by the petitioners and the petitioners had also issued post-dated cheques in favour of the respondent/complainant. It is submitted that the respondent has also already on the ground of default in payment of instalments initiated action and seized the vehicle and the vehicle was already sold and the amount was realised by the respondent/complainant. The learned counsel for the petitioners also submitted that, therefore, there is absolutely no existence of liability on the part of the petitioners in respect of the disputed dishonoured cheques involved in this case. It is submitted that out of 36 cheques, the complainant has presented only six cheques. Therefore, it is contended by the learned counsel for the petitioners that there is absolutely no legally enforceable liability on the part of the petitioners to the respondent/complainant on the basis of the hire-purchase agreement. Therefore, it is submitted that the proceedings initiated against the petitioners is liable to be quashed. 3. Per contra, Ms.R.Sudha, learned counsel who has appointed as legal aid counsel for the respondent, vehemently contended that there are specific and definite allegations made in the complaint. It is submitted by the learned counsel for the respondent that even in the complaint it was specifically mentioned about the hire-purchase agreement as well as seizing the vehicle of the petitioners on the ground of default in payment of instalments towards the dues. It is pointed out by the learned counsel for the respondent that even after the seizure and sale of the vehicle, there was remaining amount to be paid by the petitioners and as such, there is subsisting liability on the part of the petitioners and hence, the respondent was constrained to file a complaint for the offence under Section 138 of the Negotiable Instruments Act in respect of the dishonour of six cheques which were clearly mentioned with the dates and amounts in the complaint itself. Therefore, it is submitted that in view of Section 139 of the Negotiable Instruments Act, the burden is on the accused to rebut the presumption only at the time of trial and the question involved is one of fact and not of law and therefore, it is submitted that the petition for quashing is liable to be dismissed. 4. I have carefully considered the rival contentions put forward by either side and also perused the impugned complaint. 5. The admitted case of the petitioners as well as the respondent/complainant is that there was a hire-purchase agreement entered into between the petitioners and the respondent/complainant. The only ground raised by the petitioners for seeking the relief of quashing the proceedings is to the effect that already the vehicle of the petitioners was seized on the ground of default in payment of instalments and thereafter, the respondent/complainant company sold https://hcservices.ecourts.gov.in/hcservices/ the vehicle and also realised the amount. The learned counsel for the petitioners submitted that the hire-purchase agreement itself is terminated in view of the seizure and sale of the vehicle. However, considering the submissions of both sides, the undisputed fact remains on the perusal of the impugned complaint is that there is a specific averment made in the complaint itself to the effect of hire- purchase agreement entered between the parties and default committed by the petitioners and thereafter the vehicle was seized as per the clause and condition contained in the hire-purchase agreement and ultimately selling the vehicle and realising the amount to the extent from the sale proceeds. It is mentioned in the complaint that after adjusting the said amount from the sale of the vehicle, there was still dues to be paid by the petitioners and as such the six cheques involved in the complaint were presented and the same were dishonoured and as such the respondent/complainant is constrained to file the present complaint. Therefore, it is crystal clear from the reading of the complaint that there was a specific mention about the subsisting liability. It is also relevant to refer Section 139 of the Negotiable Instruments Act which contemplates presumption as reads hereunder : "Section 139. Presumption in favour of holder – It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, of any debt or other liability." Therefore, it is very clear from the above said provision that once the cheque is issued by the accused in favour of the complainant it has to be presumed that the cheque is issued only towards the legally enforceable liability. Of course, the presumption contemplated under Section 139 of the Negotiable Instruments Act, is a rebuttable one and it is open to the petitioners to rebut the presumption by placing reliance on the materials available on record. 6. The Hon'ble Apex Court in M/s.M.M.T.C.Ltd. V. M/s.Medchl Chemicals & Pharma (P) Ltd., reported in AIR 2002 SC 182 has held that, "Inherent power of quashing criminal proceedings should be exercised very stringently and with circumspection. Court exercising inherent powers is not justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the complaint. The inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice. At this stage the Court could not have gone into merits and/or come to a conclusion that there was no existing debt or liability and https://hcservices.ecourts.gov.in/hcservices/ quash complaint. It is not necessary to allege specifically in the complaint that there was a subsisting liability and an enforceable debt and to discharge the same, the cheques were issued. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondent. This they have to discharge in the trial. At this stage, merely on basis of averments in the Petitions filed by them the High Court could not have concluded that there was no existing debt or liability." 7. The Hon'ble Apex Court in the decision cited supra has clearly held that it is not necessary to allege specifically in the complaint that there was a subsisting liability and enforceable debt. But as far as the instant case is concerned, as already pointed out, in the complaint it is clearly mentioned that even after seizing the vehicle and selling the same and after realising the amount from the sale proceeds, there was further amount due to be paid to the complainant and as such the cheques involved in this case have been presented and the same were said to have been dishonoured by the accused. Therefore, it is open to the petitioners, as already pointed out, to rebut the presumption contemplated under Section 139 of the Negotiable Instruments Act at the time of trial and also to raise all the points raised before this Court, before the learned trial Magistrate. 8. Considering the submission of the learned counsel for the petitioners to the effect that the petitioners are the residents of Sivakasi and the impugned complaint is now pending on the file of the learned VII Metropolitan Magistrate, George Town, Chennai, and as such the petitioners are facing difficulty to appear before the learned Magistrate periodically for all the dates of hearings, this Court is constrained to dispense with the personal appearance of the petitioners on condition that the petitioners shall appear before the Court as and when required by the learned VII Metropolitan Magistrate, George Town, Chennai, for the purpose of trial. It is also made clear that the petitioners shall give full co-operation for the speedy disposal of the case. 9. Considering the fact that the case itself relates to the year 2003, this Court is also constrained to direct the learned VII Metropolitan Magistrate, George Town, Chennai, to expedite the trial as expeditiously as possible and more particularly within a period of six months from the date of receipt of a copy of the order of this Court. https://hcservices.ecourts.gov.in/hcservices/ 10. Before parting with this petition, this Court place it on record the commendable service rendered by Ms.R.Sudha, learned counsel who has appeared as legal aid counsel for the respondent and argued the matter effectively and also placed the authorities in support of her contention. The learned counsel is entitled to get a sum of Rs.3,500/- (Rupees three thousand five hundred only) as remuneration from the Madras High Court Legal Services Authority, High Court, Chennai. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. gg To 1. The VII Metropolitan Magistrate, George Town, Chennai. 2. -do-thro Chief Metropolitan Magistrate, Chennai. 3. The Secretary, Madras High Court Legal Services Authority, High Court, Chennai. + 1 CC To Mr.K.M.Venugopal, Advocate SR NO.38788 + 1 CC To Mrs.R.Sudha Advocate SR NO.38534 Crl.O.P.No.29554 of 2004 and M.P.No.9269 of 2004 MRD {CO} TP/1.8.08 https://hcservices.ecourts.gov.in/hcservices/