Criminal Misc. No.M-34001 of 2010 (O&M) 1 In the High Court of Punjab and Haryana at Chandigarh Criminal Misc. No.M-34001 of 2010 (O&M) Date of decision: 24.8.2011 Balbir Singh Bahal ......Petitioner Versus Punjab Financial Corporation and others .......Respondents CORAM: HON'BLE MRS. JUSTICE SABINA Present: Mr.K.S.Dadwal, Advocate, for the petitioner. Mr.G.S.Sandhawalia, Advocate, for respondent No.1. Mr.Manish Bansal, Advocate for Mr.I.S.Ratta, Advocate, for resondent No.3. **** SABINA, J. This petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 for quashing of complaint No.125 dated 3.9.1998 under Section 138 of the Negotiable Instruments Act, 1881 (the Act for short) (Annexure P-1) as well as the summoning order dated 30.4.1999 (Annexure P-2) and all the subsequent proceedings arising therefrom. Learned counsel for the petitioner has submitted that the petitioner had taken a loan from respondent No.1-complainant. However, the loan could not be repaid by the petitioner and respondents No. 2 to 3 due to loss suffered by them in their Criminal Misc. No.M-34001 of 2010 (O&M) 2 business. The cheque issued by the petitioner in favour of respondent No.1 for a sum of ` 12,00,000/- was dishonoured and consequently, the complaint in question was filed by respondent No.1 against the petitioner and respondents No.2 and 3. During the pendency of the complainant One Time Settlement Scheme (OTS scheme for short) was floated by respondent No.1 and in terms of the same, the dispute between the parties was amicably settled. In terms of the letter issued by respondent No.1 dated 22.3.2010 (Annexure P-5), amount of ` 14,47,447/- was paid by the petitioner and respondents No.2 and 3. As per the scheme, the complaint was liable to be withdrawn by respondent No.1 but they had failed to do so. The trial Court had also dismissed the application moved by the petitioner for dismissal of the complaint on the ground that they were required to pay 10% of the cheque amount as an additional sum. Learned counsel for the respondent, on the other hand, has submitted that the petitioner and respondents No.2 and 3 had failed to deposit additional sum of 10% of the cheque amount and hence, criminal proceedings were liable to continue against them. After hearing learned senior counsel for the parties, I am of the opinion that the present petition deserves to be allowed. Admittedly, loan was taken by the petitioner and respondents No.2 and 3 from respondent No.1. Cheque dated 29.6.1998 for a sum of ` 12,00,000/- was issued in favour of respondent No.1 by the accused qua discharge of their liability but the same was dishonoured by the bank when it was presented for encashment. Hence, the complaint in question was filed by Criminal Misc. No.M-34001 of 2010 (O&M) 3 respondent No.1 on 3.9.1998 (Annexure P-1). OTS policy, 2009, as approved by the State Government, was floated by respondent No.1 (Annexure P-3), wherein one of the conditions was as under:- “If the borrowers make lump sum payment within 90 days, no interest will be charged on the OTS amount and 5% rebate will be given on the OTS amount. Option to be exercised at the time of application.” Ludhiana Textiles Pvt.Ltd. (petitioner is the director of the said firm) also applied for claiming benefit under the OTS scheme vide Annexure P-5. The petitioner on behalf of the firm received a letter dated 22.3.2010 from respondent No.1 that an amount of ` 18,18,681/- be deposited by way of settlement. By that time ` 2,80,000/- had already been received by respondent No.1 and hence, the firm was only required to pay ` 14,47,747/-. The relevant contents of the letter read as under:- “ Accordingly, the Corporation offers to settle your loan account wherein you are liable to pay a sum of ` 29,80,120.20 (as on date of sale i.e. 5.8.1994) alongwith further interest and expenses if any, in terms of mortgage deed executed by you in favour of the corporation, with payment of One time Settlement amount of ` 18,18,681/-. Further, you are entitled to a rebate of 5% on OTS amount subject to maximum of ` 90.934/- for payment of OTS dues within 90 days of settlement committee Meeting. You are advised to pay ` 2.73 lacs within 30 days from the date of Settlement Committee Criminal Misc. No.M-34001 of 2010 (O&M) 4 meeting i.e. Upto 9.4.10 and balance settlement amount within 90 days from the date of settlement Committee meeting. The net amount payable as per OTS works out at ` 18,18,681/-. Out of which ` 2,80,000/- lacs has already been received and the balance amount ` 14,47,747-(after net rebate of 5%) is to be paid with in period as mentioned above. You are therefore advised to send us post dated cheque for the payment of balance amount of ` 14,47,747/- immediately and ensure that the cheque is encashed on presentation on due date You are also requested to deposit further expenses, if any, before issuing No dues Certificate by the corporation." In pursuance of the said letter, the requisite payment was made within 90 days vide 5 demand drafts by the firm. Annexure P-7 is the certificate issued by respondent No.1 qua no dues and the same reads as under:- “It is certified that M/s Ludhiana Textiles (P) Limited, Ludhiana was sanctioned a term loan of ` 46.20 + 7.40 lacs in lieu of State subsidy and it availed ` 53.60 lacs vide Mortgage Deed dated 28.1.1991. The loan amount of the concern stands fully adjusted as per OTS 2009 under Loss assets scheme and nothing is due, subject to audit.” Thus, in terms of the OTS scheme, the entire amount Criminal Misc. No.M-34001 of 2010 (O&M) 5 was paid by the firm by way of demand drafts within the requisite period. The firm was also allowed 5% rebate. In case the firm was required to pay an additional sum of 10% of the cheque amount, the same should have been mentioned by respondent No.1 in the letter Annexure P-5. It is a very sad state of affairs as although the firm has paid the entire amount in terms of the OTS scheme yet they are being proceeded against in the criminal complaint. It is apparent that the petitioner and the other directors of the firm with a view to buy peace had taken benefit of the OTS scheme but despite having paid the entire amount as demanded by respondent No.1 under the scheme they are being forced to face the criminal proceedings. In fact, once the settlement had been arrived at between the parties, respondent No.1 was under a legal obligation to withdraw the complaint. Learned trial Court has also erred in holding that the complaint could not be dismissed because the petitioner was liable to pay 10% of the cheque amount in question. The OTS scheme has been floated in general by the Corporation and any of the borrower could avail its benefit. In the facts and circumstances of the present case, continuation of the criminal proceedings against the petitioner would be nothing but an abuse of process of law. Accordingly, the present petition is allowed. Complaint No.125 dated 3.9.1998 under Section 138 of the Act (Annexure P-1) as well as summoning order dated 30.4.1999 (Annexure P-2) and all the subsequent proceedings arising therefrom, are quashed. (SABINA) JUDGE August 24, 2011 anita