p- HIG^H COURT OF CHHATTISGARH, BILASPI3 Division Bench: Hon'ble Shri Sunil Kumar Sinha &. Hpn^ble Shri Radhe Shvam Sharma, J J ^- '^' •I 1 Writ Appeal No. 447 of 2011 Anil Aganval Vs. Small Industries Development Bank of India ORDER For consideration Sd/- Sunil Kumar Sinha Judge HON»BLBSHRI JUSTICE RADHE SHYAM SHARMA 3 <^.^^e/^ ^ Sd/- R.S. Sharma Judge Post for Order :23/09/2011 Sd/- Sunil Kumar Sinha Judge r~ 4P^ T HIGH COURT OF CHHATTISGARH, BILASPUR Division Bench: APPELLANT PETITIONER RESPONDENT Hon^ble Shri Sunil Kumar Smha & Hon>ble Shri Radhe Shvam Sharma, J J Writ Aopeal No. 447 of2011 Anil Aganval, son of Shri Radhe Shyam Agarwal, aged about 46 years, resident of Village Tilda-Neora, District Raipur Versus Small Industries Developraent Bank of India, a corporation established under Small Industries Bank of India Act, 1989, having its head office at 10/10 Madan Mohan Malviya Marg, Lucknow, (UP) and inter-alia a branch at Chawla Complex, Devendra Nagar Road, Sai Nagar, Raipur through its authorized representative Shri Akash Pawar, son of Shri V.S. Pawar, Assistant General Manager, Raipur (CG) (Writ Appeal under Secfion 2(11 ofthe Chhattisearh Hieh Court (Appeal to Division Bencht, Act 2006) Appearance: Mr. B.P. Sharma, Advocate of the appellant. QRDER (^.09.2011) Following order of the Court was delivered by Sunil Kumar Sinha, J. (1) The appellant/petitioner issued five cheques to the respondent dated 1.11.2010, 1.12.2010, 1.1.2011, 1.2.2011 & 1.3.2011. When the cheques were produced before the concerned f?6; Writ Aooeal No. 447 of 2011 •^ Bank, they were dishonored on account of non-availability of the funds. Thereafter a notice was given by the respondent to the appellant and a complaint u/s 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'Act 1881') was filed in the Court of Judicial Magistrate First Class, Raipur. The said Court, on the basis of inaterial available before it took cognizance in the matter and issued process against the appellant. The appellant instead of appearing before the trial Court, filed W.P. (Cr.) No. 4840/2011 for quashing of the proceedings of Criminal Case No. 397/2011 {Small Scale Industries Development Bank oflndia -Vs- Anil Kumar). The writ Court, considering all the facts and circumstances of the case, declined to entertain the writ petition and dismissed the same by order dated 25.8.2011 which has been impugned in this Writ Appeal. (2) Mr. B.P. Sharma, learned counsel appearingon behalf of the appellant, argued that the impugned cheques were issued for security ofthe loan borrowed by the appellant, therefore, the same would not come within the purview of Section 138 of the Act, 1881. He relied on the decisions of M.S. Naravana Menon Alias Mani -Vs- State of Kerala And Another, (2006) 6 SCC 39 and Harshendra Kuvnar D. -Vs- Rebatilata Koley And Others^ (2011] 3 SCC 351,. (3) In M.S. Narayana Menon (supra), the appellant clearly said that nothing was due and the cheque was issued by way of security. The said defence was accepted as probable. The Supreme \!^^^Q^^^\. lil^i^^ 1 i ^, ^^ ! ^^,^" Writ Appeal No. 447 of2011 Court held that if the defence is acceptable as probable the cheque therefore cannot be held to have been issued in discharge of the debt as, for example, if a cheque is issued for security or for any other purpose the same would not cpme within the purview of Section 138 of the Act, 1881. (4) In Harshendra Kumar D. (supra), it was held that "It is not the law that in a criminal oase where trial is yet to take place and the matter is at the stage of issuance of summons or taking cognizance, materials relied upon by the accused which are in the nature of public documents or the materials which are beyond suspicion or doubt, in no circumstance, can be looked into by the High Court in exercise of its jurisdiction under Section 482 or for that niatter in exercise of revisional jurisdiction under Section 397 of the Code. It is fairly settled now that while exercising inherent jurisdiction under Section 482 or revisional jurisdiction under Section 397 of the Code in a case where complaint is sought to be quashed, it is not proper for the High Court to consider the defence of the accused or embark upon an enquiry in respect of merits of the accusations. However, in. an appropriate case, if on the face of the documents, which are beyond suspicion or doubt, placed by the accused, the accusations against him cannot stand, it would be travesty ofjustice if the accused is relegated to trial and he is asked to prove his defence before the trial court. In such a matter, for promotion ofjustice or to prevent injustice or abuse Writ Appeal No. 447 of2011 of process, the High Court may look into the materials which have significant bearing on the matter at prima facie stage.w (5) There is no doubt that if a cheque has been issued in security of the debt and not towards discharge of the debt or other liability, Section 138 would not apply. In such a case, what material has been placed on record to hold all this at the preliminary stage would be important . As stated in Harshendra Kumar D. (supra), the materials should be in the nature of public documents or the material which are beyond suspicion or doubt. But at this stage for a court hearing for quashing of the complaint it would not be proper to consider the defence of the accused or embark upon an enquiry in respect of merits of the accusations. (6) In case on hand, Para-3 of the complaint filed before the Magistrate u/s 138 ofthe Act, 1881 reads as under:- 3. That in discharge of a part and his existing liability under the said loan the accused had drawn 5 cheques (in his capacity as the sole proprietor of M/s. Shyam Rice and Parboiling Unit-I) if favour of the complaint. Details ofthe same are given hereinbelow: s. No. Cheque No. Date Amount Drawn On 1 No.376746 1.11.2010 Rs. 1,71,000/- Dena Bank, Jawahar Nagar, Raipur 2 No.376747 1.12.2010 Rs. 1,71,000/- Dena Bank, Jawahar Nagar, Raipur 3 No.376748 1.1.2011 Rs. 1,71,000/- Dena Bank, Jawahar Nagar, WritApneal No. 447 of 2011 (7) The respondent has contended that the cheques were issued in discharge of part of existing liability. It nowhere comes in the complaint that the cheques were issued towards security of the loan. No material has been placed before us or before the writ Court to show that the cheques were issued as security of the loan and they were not issued towards discharge of the liability of the appellant. (8) Mr. Sharma has referred to the reply to the notice issued by the Bank before filing the complaint u/s 138 ofthe Act, 1881. The appellanf, in reply to the notice has contended that all the aforesaid cheques were given towards security of the term loan amount mentioned in the notice. Except the above there is no material to suggest like that. The reply to the notice is not such a docuraent which may be taken into consideration at this stage against the allegations ofthe complaint because^the contention in reply is defence of the appellant which needs enquiry in respect of its merit which cannot be done by a writ Court. It is a self- contained ground taken by the appellant involving none, and a test of enquiry is required to come to a definite conclusion in this Raipur 4 No.376749 1.2.2011 Rs. 1,87,000/- Dena Bank, Jawahar Nagar, Raipur 5 No.376750 1.3.2011 Rs. 1,87,000/- Dena Bank, Jawahar Nagar, Raipur Y" 6 Writ Appeal No. 447 of2011 regard. Therefore, on this basis alone, the proceedings of the complaint^as prayed for, cannot be quashed. (9) In Smt. Nagawwa -Vs- Veeranna Shivalingappa Konfalgi and Others. AIR 1976 SC 1947, the Supreme Court, while considering the raatter of issuance of process u/s 204 of the Code of Criminal Procedure, held that in coming to a decision as to whether a process should be issued the Magistrate can take into consideration inherent improbabilities appearing on the face of the complaint or in the evidence led by the complainant in support of the allegations but there appears to be a very thin line of deraarcation between a probability of conviction of the accused and establishment of a prima facie case against him. It was further held that in the following cases an order of the Magistrate issuing process against the accused can be quashed or set aside: (1) Where the allegations made in the complaint or the statement of the witnesses recorded in support of the same taken at their face value raake out absolutely no case against the accused or the coinplaint does not disclose the essential ingredients of an offence which is alleged against the accused; (2) Where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused; (3) Where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inadmissible; and (4) Where the complaint suffers from fundamental legal defects, such as, want of sanction, or absence of a coraplaint by legally competent authority and the Uke. i ^f^^^ ^;;:"..-^ •••-;•., 11 '^J ".^.: / / '%. '%^.^ v^^^ Writ Auoeal No. 447 of 2011 (10) In case on hand, we do not find any such circumstance on which the order of issuance of process against the appellant/petitioner or the proceedings of the case registered u/s 138 ofthe Negotiable Instruments Act, 1881 may be quashed. We are of the view that the learned Single Judge was quite correct in not entertaining the writ petition in the above facts and circunistances ofthe case. (11) The Writ Appeal, therefore, is liable to be dismissed and is hereby dismissed summarily. Sd/- Sunil Kumar Sinha Judge Sd/- R.S. Sharma Judge vatti ^'