Criminal Misc. No. 17475-M of 2006 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Criminal Misc. No. 17475-M of 2006. Date of decision:- .5.2008. M/s Atma Tube Products Ltd. and another ...Petitioners. Versus Industrial Finance Corporation of India Ltd. ...Respondent. CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL Present:- Mr. Anand Chhibar, Advocate for the petitioners. Mr. Mukesh Ahluwalia, Advocate for the respondent. RAJESH BINDAL J. The prayer in the present petition is for quashing of complaint No.190 dated 28.11.1996 filed against the petitioners under Sections 138/141 and 142 of Negotiable Instruments Act, 1881 (for short 'the Act') and the summoning order dated May 17, 1997 passed by Judicial Magistrate 1st Class, Chandigarh. 2. Briefly, the facts are that petitioner No.1 company is a loanee of respondent Industrial Finance Corporation of India Ltd. (for short 'the IFCI'). Loan of Rs. 1.93 crores was raised by the petitioner company wayback in 1988 which was to be re-paid within a period of 10 years. It is not disputed that repayment of loan was irregular which according to the petitioner was for the reason that there was recession in the market and further because of the reasons beyond the control of the petitioner company. The dispute in the present petition arose on account of dishonour of four cheques of Rs. 2.5 lac each (totalling Rs.10 lac) issued by the petitioner company to the IFCI . The particulars thereof are as under:- Criminal Misc. No. 17475-M of 2006 -2- Cheque No. Date Drawn on Amt. (Rs. In lakhs) Date of presentation 217002 11.10.96 OBC 2.5 14.10.96 184297 18.10.96 OBC 2.5 18.10.96 184298 18.10.96 OBC 2.5 18.10.96 184299 22.10.96 OBC 2.5 22.10.96 3. When presented, the cheques were dishonoured with the objection 'exceed arrangements/funds insufficient'. Immediately on receipt of the dishonoured cheques, notice under Section 138 of the Act was issued. The petitioners neither replied to the notice nor paid the amount of dishonoured cheques to the IFCI, as a result of which the complaint in question came to be filed. It is the quashing of this complaint which is sought in the present petition. 4. Learned counsel for the petitioners submitted that after the dishonour of cheques, the petitioner Company vide letter dated March 26, 1997 gave ten cheques of Rs. 2.5 lac each which were to be presented for payment by the IFCI on different dates after regular intervals. In fact these cheques were handed over by the petitioner company to IFCI partially on account of payment of cheques which had earlier been dishonoured. A specific request was made in the letter to that effect and further it was requested that notice already issued under Section 138 of the Act be withdrawn. Further the submission is that once a fresh agreement had come into existence after the dishonour of the cheques at the first instance on the basis of which impugned complaint was filed, the complaint in question filed on account of dishonour of cheques at first instance deserves to be quashed. Out of ten cheques issued by the petitioner company on March 26, 1997, only three cheques had been cleared and rest seven had been returned uncleared. On account of dishonour of seven cheques submitted alongwith letter dated March 26, 1997, the complaints filed by the IFCI were also Criminal Misc. No. 17475-M of 2006 -3- pending. To buttress the arguments, reliance has been placed upon Venkatesh Dutt V. M/s M.S. Shoes East Limited, Vol.II (2004) Banking Cases 19 (Delhi), Anoop Bhakoo V. Subhash Chander Gupta, Vol IV (2005) Banking Cases 100 (P& H), Superintendent and Remembrancer of Legal Affairs, W.B. V. Mohan Singh and others, AIR 1975 Supreme Court 1002 and Thakkar Dass V. State of Haryana, 1991 Crl. Law Journal 1807. 5. In response to the contentions raised by learned counsel for the petitioners, learned counsel for the respondent submitted that there was no compromise by the IFCI. It was a mere letter written by the petitioner company to the IFCI requesting for adjustment of the cheques against the earlier dishonoured cheques but the same was not accepted as there is no communication from IFCI in that regard. The conduct of the petitioners is evident from the fact that on issuance of notice for dishonour of cheques which resulted in filing of the impugned complaint, the petitioner company did not even reply to the notice what to talk of its' complying with the terms of the notice. The petitioners are irregular in repayment of the loan since beginning. The loan of Rs. 1.93 crores, which was raised by the petitioner company way back in 1988, was to be repaid upto 1998 and on account of non-payment now a sum of Rs. 24.95 crores is due from the petitioner company. Subsequent ten cheques were given by the petitioner company on account of payment of overdue interest as is even evident from the perusal of the letter accompanying the cheques. In any case, it is a matter of evidence to be led by the parties where the petitioners will be at liberty to substantiate the claim made by them before the trial court as to on what account the subsequent ten cheques were issued by the petitioner Criminal Misc. No. 17475-M of 2006 -4- company. The prayer is for dismissal of the petition as the petitioners had already delayed the proceedings substantially. The complaint in question was filed way back in 1996. 6. Having heard learned counsel for the parties, I do not find any substance in any of the contentions raised by learned counsel for the petitioners. It is a case where the effort of the petitioners is, somehow or the other, delay continuation of proceedings against them. Earlier the petitioners had filed Criminal Misc. No. 53885-M of 2003 seeking quashing of the impugned complaint. However, the same was dismissed as withdrawn with the following order:- “Dismissed as withdrawn without prejudice to the petitioners contesting the case in the trial court in accordance with law. 23.12.2005 sd/-Adarsh Kumar Goel Judge” 7. Instead of contesting the case before the trial court, the present petition came to be filed before this court again on March 23, 2006. After the issuance of notice of motion, since May 17, 2006, adjournment is being sought on the ground that the matter is being compromised between the parties. As on today also a request to that effect was made. However, the fact having been denied by the counsel for the IFCI, the matter was heard on merits. 8. The sole issue raised by learned counsel for the petitioners is based on letter dated March 26, 1997 vide which ten cheques of Rs. 2.50 lac each were given by the petitioner company to the IFCI. The text of the letter is extracted below:- Criminal Misc. No. 17475-M of 2006 -5- “This is in reference to the various discussions the undersigned had with your goodself, we are sending herewith our following cheques towards payment of your interest:- Date Cheque No. Amount Drawn on To be presented on 31.3.97 831488 2.5 BOB 05.04.97 31.3.97 831489 2.5 BOB 10.04.97 31.3.97 831490 2.5 BOB 15.04.97 31.3.97 831491 2.5 BOB 20.04.97 31.3.97 831492 2.5 BOB 25.04.97 31.3.97 831493 2.5 BOB 30.04.97 31.3.97 831494 2.5 BOB 05.05.97 31.3.97 831495 2.5 BOB 10.05.97 31.3.97 831496 2.5 BOB 15.05.97 31.3.97 831497 2.5 BOB 20.05.97 You are requested to present these cheques for payment on the dates requested above. We have to request for future dates for presentation of cheques as our realization from the market are very sluggish. However, we assure you that all the cheques shall be duly honoured on presentation. Apart from this, we shall be sending you a demand draft for Rs.7.50 lacs on 31.3.1997 positively. With this the interest payable upto July, 1996 quarter shall be fully paid. You are also requested to cover the earlier bounced cheques in this payment and withdraw your notice under Section 138.” 9. A perusal of the above referred letter shows that the cheques had been issued by the petitioner company towards payment of interest. It was specifically mentioned therein that with this payment the interest payable upto July 19, 1996 quarter shall be fully paid. Merely, a request was made in the letter that earlier bounced cheques should be covered with this payment and the notice issued under Section 138 of the Act should be withdrawn. It is not disputed that there is no communication from the IFCI Criminal Misc. No. 17475-M of 2006 -6- to the petitioner company regarding acceptance of this request of the petitioner company. 10. In the present case on account of dishonour of the cheques, notice was issued to the petitioner company on October 29, 1996 in terms of the period of limitation prescribed under the Act, the complaint was to be filed as the terms of the notice admittedly remained uncomplied with. The same was filed on November 28, 1996. It is not disputed that the petitioners had received notice on account of dishonour of cheques. For the petitioners to state in communication dated March 26, 1997 that the notice issued under Section 138 of the Act should be withdrawn was misnomer as by that time the period to file complaint was already over. The complaint in fact had been filed though the petitioners were summoned later. In any case from a unilateral act of the petitioners, it cannot possibly be said that agreement came into existence from which it could be inferred that the cheques submitted by the petitioner company alongwith letter dated March 26, 1997 were on account of payment of the cheques already dishonoured in October 1996. In fact on account of failure of the petitioners to comply with the terms of notice at the appropriate time the offence was already committed for which complaint had been filed and the petitioners are being prosecuted. 11. Effort of the petitioners in the present case is to make out their case by a binomial theorm. At first instance cheques of Rs. 10 lac were dishonoured. Then out of ten cheques of Rs.2.50 lacs each (total Rs. 25 lacs) only three of total, value of Rs.7.50 lacs were cleared. Thereafter, the petitioners had paid another sum of Rs.10 lacs by way of demand draft. The submission is that out of cheques of Rs. 25 lacs issued, Rs. 17.50 lacs have been paid and only balance is Rs. 7.50 lacs. Accordingly, the impugned Criminal Misc. No. 17475-M of 2006 -7- complaint with disputed amount of cheques worth Rs.10 lacs deserves to be quashed. Even this submission is totally misconceived and contrary to the spirit of the Act. If ingredients of offence are complete for every offence, separate cause of action is there for initiating prosecution. Subsequent cheques or draft given by the petitioners cannot in any manner be linked with first set of cheques. 10. Facts in Venkatesh Dutt's case (supra) are totally different. Reliance placed thereon is totally misconceived. In that case admittedly agreement was signed by both the parties after dishonour of cheque at the first instance. The submission of the petitioners that its unilateral act should be considered to be agreement by acquisance has no merit. 11. Besides above, this court would not like to exercise extraordinary jurisdiction in the case of the petitioners seeing their conduct. What to talk of the complaint in question even the cheques issued by the petitioners subsequently in March 1997 had also been honoured. It was only three out of ten cheques were honoured and rests seven had again been dishonoured. There is prima facie merit in the stand of IFCI to the effect that the subsequent cheques submitted by the petitioner company were on account of repayment of overdue interest and not on account of payment of cheques which had earlier been dishonoured. The plea raised by the petitioners can be appreciated only by the trial court on the basis of evidence to be led by the parties. In the present case the petitioners had been able to misuse the process of law to its hilt by delaying the proceedings for more than a decade. The object for which amendment was made in the Act was totally defeated. 12. For the reasons mentioned above, I do not find any merit in the Criminal Misc. No. 17475-M of 2006 -8- present petition and the same is dismissed. As the proceedings in the present case are quite old, the learned trial court is directed to expedite the hearing thereof and dispose of the same finally on or before December 31, 2008. The parties through their counsels are directed to appear before the court below on 02.07.2008. May 26, 2008. RAJESH BINDAL asija JUDGE (Refer to Reporter)