IN THE HIGH COURT OF JUDICATURE ANDHRA PRADESH AT HYDERABAD FRIDAY THE TWELVETH DAY OF MARCH TWO THOUSAND AND TEN PRESENT: THE HONOURABLE SRI JUSTICE P. S. NARAYANA CRIMINAL PETITION No. 3108 OF 2009 Between: M/s Ashok Rubber Industries F-1, Shed & Plot No.21, Kattedasn, Hyderabad Represented by Sri M.Venkata Rao … Petitioner V/s. State of Andhra Pradesh Represented by its Public Prosecutor, High Court of Andhra Pradesh, Hyderabad & Anr. … Respondents Counsel for the Petitioner : Sri Vedula Srinivas (1296) Counsel for the Respondent : Public Prosecutor for R1 Smt.Pushpinder Kaur for R2 THE HONOURABLE SRI JUSTICE P. S. NARAYANA CRIMINAL PETITION No. 3108 OF 2009 O R D E R : This Criminal Petition is taken up for admission. 2. Smt. Pushpinder Kaur, the learned counsel representing the second respondent would maintain that no doubt at a later point of time amounts had been paid to the Employees State Insurance Corporation, Hyderabad. But, however, the conduct of the petitioners may also have to be taken into consideration while considering the criminal petition filed under section 482 of the Code of Criminal Procedure {hereinafter referred to for short ‘the Code’ for the purpose of convenience}. 3. Sri Vedula Srinivas, the learned counsel representing the petitioners however had taken this court through the specific ground raised and also subsequent events and would maintain that even keeping the object of different provisions of the Negotiable Instruments Act, no purpose would be served in further proceeding with the prosecution. 4. Heard the learned counsel on record. 5. It is stated that the first petitioner is a partnership firm and the second petitioner is one of the partners of the first petitioner. Both the petitioners are shown as A-1 and A-2 in CC.No.1617 of 2007 on the file of the Court of VII Additional Chief Metropolitan Magistrate, City Criminal Courts, Nampally, Hyderabad. 6. It is stated that the first petitioner was dealing with the business of manufacturing of Rubber Sheets, which were used for various purposes as a raw material. It is stated that the second petitioner was one of the active partners of the first petitioner firm. It is stated that the first petitioner was engaging workers in its Firm and was brought under the coverage of ESI Act. As it was brought under the coverage of Employees State Insurance Act, it was allotted with a Code No.52-4704-24 and was required to pay ESI Contributions to the employees of the Corporation. It is stated that the petitioners were in the habit of paying the above said ESI contributions regularly, without any break or delay to the Corporation. It is stated that the first petitioner firm went into losses from the years 1997-98 onwards due to which there was a delay in payment of the contributions and after words it could not pay some of its contributions due to the heavy financial loss of firm and also as there was no manufacturing activity. It is stated that ultimately in the month of September 2002, the factory was completely closed and the same was informed to the Corporation. It is further stated that ultimately in the month of September 2002, the factory was completely closed and the same was informed to the Corporation. It is also stated that being so, on 07- 7-2003 the Recovery Inspector of the second respondent Corporation had visited the first petitioner firm and made some adhoc assessments of the contributions and demanded the second petitioner to pay an amount of about Rs.66,000/- immediately. It is stated that the second petitioner was not in a position to pay the said amount at that moment, as his firm was already closed due to losses. It is stated that the second petitioner firm issued two cheques bearing Nos. 714698 and 714700 dated 16-7-2003 and 28-7-2003 drawn on SBI Charimnar branch of the account maintained by the first petitioner from out of which the cheques bearing No. 714698 dated 16-9-2003 was issued for an amount of Rs.33,824/- drawn on SBI Charminar branch in favour of the second respondent. It is further stated that at the time of the issuance of the cheques the second petitioner had also made it clear that he would pay back the amount in the form of Demand Drafts and he would take back the cheques and requested them not to present them in the bank. It is further stated that the cheques were issued only as a security and would be taken back the cheques after issuance of the demand drafts. It is also stated that this was also communicated to the Recovery Officer in writing and which was also accepted by him and also endorsed with an assurance. 7. Further it is stated that suddenly on 16-7-2003, the cheques was presented in the Bank for collection at SBI Main Branch Hyderabad and it was returned unpaid with remarks as “Account Closed” vide cheques Memo dated 22-7-2003. It is stated that the reasons for the account being closed was that the account was maintained in the name of the firm and that account was a loan account. As the first petitioner went into losses the loans taken from the Bank could not be repaid in time and were settled under a One Time Settlement Scheme in the year 2003 and as the loans were cleared, the Bank itself has closed the account. 8. It is stated that the second respondent Corporation has filed a private complaint under section 200 of the Code of Criminal Procedure initially in the Court of XV Metropolitan Magistrate, City Criminal Court, Nampally, Hyderabad numbered as CC.No.1488 of 2003 thereafter it was then transferred to the file of the VII Additional Chief Metropolitan Magistrate, Nampally, Hyderabad and it is re- numbered as CC.No.1617 of 2007 against the petitioner for the offence under section 138 of Negotiable Instruments Act, alleging that the cheques issued by the second petitioner has been dishonoured due to closure of the account and to punish them. 9. It is further stated that the second respondent as an adhoc basis demanded the contributions for which the second petitioner has issued a cheques. At the time of the issuance of the cheques itself, the second petitioner requested the officials of the Corporation not to present it into the Bank and it shall be kept as a security and as and when he issued the demand drafts for the said amount, he would take back the cheques. This was also agreed and endorsed by the second and inspite of that the second respondent had presented the cheques for clearance. It is stated that as the loan amount of the first petitioner was repaid to the bank under the OTS scheme, the account was closed. It was neither intentional nor deliberate on the part of the second petitioner and also the second petitioner had paid the cheques amount of Rs.33,824/- to the second respondent on 29-1- 2009 through an ESI Challan receipt, this payment of Rs.33,824/- was paid in against the cheques No.714698 dated 16-7-2003. As the liability of the petitioner towards the second respondent has been fulfilled, there would remain nothing in CC.No.1617 of 2007 and continuing the CC would be an abuse of process of the Court and is liable tobe quashed. In the recent times the Hon’ble Apex Court in catena of decisions has held that if the cheques amount has been paid by the accused to the complainant, there would be no purpose served in continuing the criminal proceedings and it would be nothing but abuse of process of the court. It has also held that the courts can quash the criminal proceedings in such circumstances. This is also a fit case, which falls under that category, and there is every need to quash the proceedings since the accused has already paid the cheques amount and continuing the CC would amount to abuse of process of law. It is stated that the second petitioner being the partner of the firm paid the entire cheques amount from his account and also he is made to go round the courts. It is stated that since the second respondent is a Central Government undertaking, they may not come forward to compound the offence in any manner. It is stated that as the second petitioner has paid the entire cheques amount to the second respondent before the commencement of the trial, this court’s indulgence is very much required under its inherent powers to quash the said CC. In spite of best efforts the petitioner could not obtain the certified copies of the proceedings in CC.No.1617 of 2007. It is also stated that in the interest of justice, it is just and necessary to grant stay of all further proceedings including the appearance of the petitioner. 10. It is not in serious controversy that the amounts had been paid. It is no doubt true that the conduct of the petitioners may not be open to the expectation. But, however, in the peculiar facts and circumstances of the case, since the Employees State Insurance Corporation had received the amounts, no useful purpose would be served in further proceeding with the complaint under challenge. 11. The Criminal Petition is accordingly allowed. __________________________ JUSTICE P. S. NARAYANA. 12-03-2010. I s L THE HONOURABLE SRI JUSTICE P.S. NARAYANA CRIMINAL PETITION No. 3 1 0 8 of 2009 Circulation Entry No. 26 Date: 12-03-2010 Computer No. 43 Court Master: I s L