*THE HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY +CRIMINAL PETITION No.7624 OF 2008 %Dated 30-11-2011 Crl. P. No. 7624 of 2008 # M/s. Anand Agros Limited, Registered Company under Companies Act, 1956, Having its Registered Office at 12-13-1240, Tarnaka, Secunderabad –17, Rep. By its Managing Partner A. Suri Babu. - - - Petitioner/ Accused. VERSUS $ 1. G. Srinivas, S/o. G. Chandra Mouli, Aged 32 Years, Occ. Business, R/o. H.No.32, Satyanarayana Puram, Chaitanyapuri R.R. District. 2. The Andhra Pradesh, Rep. by Public Prosecutor, High Court of A.P., Hyderabad. - - - Respondents. ! Counsel for Petitioner : Sri Karoor Mohan ^ Counsel for Respondents : Public Prosecutor < GIST : > HEAD NOTE : ? Cases referred : --- AIR 2010 SC 3624. THE HON’BLE SRI JUSTICE G.KRISHNA MOHAN REDDY CRL. PETITION No. 7624 of 2008. ORDER: This Criminal Petition is filed under Section 482 Cr.P.C. to quash proceedings in Calender Case No. 598 of 2008 registered for offence punishable under section 138 of N.I. Act, 1881 on the file of the II Additional Metropolitan Magistrate, Ranga Reddy District at L.B. Nagar, on the following grounds : In connection with business affairs under job work agreement, the petitioner/accused issued two cheques; one for Rs. 2.00 lakhs and another for Rs. 1.00 lakh drawn on Lakshmi Vilas Bank Limited, Kothapet Branch, Ranga Reddy District in favour of the 1st respondent/complainant. After expiry of the job work agreement with the respondent, the petitioner entered into job work agreement with a third party. The petitioner instructed the concerned bank to stop payment of those cheques under intimation to the respondent No.1. Subsequently, a notice dated 11.8.2006 was issued by the 1st respondent to the petitioner and the petitioner gave reply on 24.8.2006. After the receipt of the notice, the petitioner approached the learned II Additional Chief Judge, City Civil Court at Hyderabad and filed O.P.No. 1428 of 2006 under Section 9 of the Arbitration Act, 1996 and obtained interim injunction through order dt.15.11.2006, preventing the 1st respondent from proceeding with the presentation of the cheques for encashing them before the concerned bank. The learned II Additional Chief Judge granted interim injunction for a period of three months subject to the condition that the dispute should be referred to an Arbitrator. On 28.8.2007 the said O.P. was allowed. On 27.9.2006, the 1st respondent filed a private complaint before the learned II Additional Metropolitan Magistrate, Ranga Reddy against the petitioner for offence punishable under Section 138 of the Negotiable Instruments Act, which therefore is not tenable. It is the contention of learned Counsel for the first respondent that whereas the complaint was filed against the petitioner for the offence punishable under Section 138 N.I. Act on 27.9.2006 as a counterblast the O.P. was filed and the interim injunction was obtained on 15-11-2006 on the file of the II Additional Chief Judge, City Civil Court, Hyderabad and when there is a statutory provision to take the criminal action the Civil Court order will not have the effect of nullifying the authority of the Criminal Court to prosecute the Criminal case. The learned Counsel for the petitioner further has contended that since the petitioner instructed the concerned bank on which the cheques in question were drawn to stop the payment of the cheques under intimation to the 1st respondent by a letter dt.3.7.2006 and the cheques in question were issued in respect of an agreement which contains an arbitration clause and since O.P. 1428 of 2006 was allowed in favour of the petitioner and the injunction was granted therein by the competent Civil Court, the Criminal Court is barred from taking cognisance of the matter or entertain the matter and the petitioner cannot be said to have committed the offence punishable under Section 138 N.I. Act. For proper appreciation of the case on hand, it is necessary to extract Section 138 N.I. Act, which reads as under; Dishonour of cheque for insufficiency etc., of funds in the account:- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a term which may extend to one year, or with fine which may extend to twice the amount of the cheque, or with both; Provided that nothing contained in this section shall apply unless:- - a) the cheque has been presented to the bank within a period of six months from the date on which it s drawn or within the period of its validity, whichever is earlier; b) the payee or the holder in due course of the cheque as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque, within fifteen days of the receipt of information by him from the bank regarding the return of the cheque as unpaid ;and c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation: For the purposes of this section ‘debt or other liability’ means a legally enforceable debt or other liability. Therefore, section 138 of the N.I. Act clearly contemplates and mandates that when a cheque was dishonoured before concerned forum, the offence punishable there under was complete unless the obligations incorporated in the proviso there under were complied with. In fact, as per the record all those formalities were completed in order to attract the proviso and the offence. It is also categorical that subsequent to the filing of the complaint, the O.P. was filed and the interim injunction to prevent the first respondent from presenting the cheques and encashing them as noted supra was obtained which makes it very clear that the same was done as a counterblast to the complaint filed which therefore is to be viewed very seriously. On the other hand, a reading of the injunction order makes it very clear that the question of existence of legally existing debt or debts was not considered and decided prima-facie and it is only observed that in view of the rival contentions and because of the existence of the arbitration clause it was not proper to allow the first respondent to encash the cheques and hence it was necessary to grant the relief of temporary injunction pending disposal of the arbitration (before Arbitrator). This Court, cannot sit as an Appellate Forum over the order of injunction granted by the Civil Court, but this Court can consider when there are statutory provisions in the form of Section 138 of N.I. Act and also sections 141 and 142 of the same Act, to take necessary action about bouncing of cheques on the basis of relevant material available. The authority of the competent Criminal Court to entertain the matter and do justice to both the accused and the accuser cannot be questioned unless prima-facie, sufficient material is not available to use the authority in spite of the fact that the corresponding civil matter is pending. I n Kishan Singh Vs. Gurpal Singh[1], the Apex Court clearly emphasised and demarcated the question of jurisdiction of a competent Criminal Court and a competent civil Court with regards to establishing a fact in issue in which there is a Criminal liability and as well as Civil liability. In fact, the Apex Court observed as follows : “Thus in view of the above, the law on the issue stands crystallized to the effect that the findings of fact recorded by the Civil Court do not have any bearing so far as the criminal case is concerned and vice-versa. Standard of proof is different in civil and criminal cases. In civil cases it is preponderance of probabilities while in criminal case it is proof beyond reasonable doubt. There is neither any statutory nor any legal principle that finding recorded by the court either in civil or criminal proceedings shall be binding between the same parties while dealing with the same subject matter and both the cases have to be decided on the basis of the evidence adduced therein. However, there may be cases where the provisions of Sections 41 to 43 of the Indian Evidence Act, 1872, dealing with the relevance of previous Judgements in subsequent cases may be taken into consideration.” From the decision of the Supreme Court cited supra, it is clear that the findings of fact recorded by a Civil Court would not have any bearing as far as the criminal case is concerned and vice-versa as standard of proof in both the matters are different and there is neither any statutory nor any legal principle that the findings recorded by the court either in civil or criminal proceedings shall be binding between the same parties while dealing with the same subject matter where both the cases are to be decided on the basis of evidence adduced therein subject to the exceptions noted. Therefore, when the order of injunction granted by the Civil Court is against the statutory provisions enjoined in Sections 138, 141 and 142 of the N.I. Act, it is not tenable and it is to be deemed to be nonest (with regards to the criminal liability) and the trial of the case is to be done and both the parties can adduce necessary evidence with regards to the existence of legally enforceable debts and Criminal liability of the Accused before a final decision can be arrived at in the matter. For the foregoing reasons, I find no merits in the criminal petition and the same is liable to be dismissed. Accordingly, the criminal petition is dismissed. However, the learned II Additional Metropolitan Magistrate, Ranga Reddy District shall not be influenced by any of the observations made above while disposing of the criminal case against the accused on merits. ___________________________ G.KRISHNA MOHAN REDDY, J 30.11.2011. KRB/DSH. Note: L.R. copy to be marked. B/o.DA. THE HON’BLE SRI JUSTICE G.KRISHNA MOHAN REDDY 228 CRL. PETITION No. 7624 of 2008. ORDER: Dt. 30.11.2011. [1] AIR 2010 SC 3624