Crl.Misc.No.M-34477 of 2008 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Crl.Misc.No.M-34477 of 2008. Decided on September 01, 2009. M/s Harishchandra & Co. & Ors. .. Petitioners VERSUS Shri Devvert Singh. .. Respondent * * * CORAM: HON'BLE MR.JUSTICE M.M.S.BEDI PRESENT Mr.Kuldeep Mansukhani, Advocate, for the petitioners. Mr.Devvert Singh, Advocate, respondent in person. M.M.S. BEDI, J. Petitioners have filed this petition invoking the inherent jurisdiction of this Court under Section 482 Cr.P.C., for quashing of Criminal Complaint No.217 of 2007, under Section 138 of the Negotiable Instruments Act, dated 24.09.2007 (Annexure P-1) passed by Additional Chief Judicial Magistrate, Sonepat, pending in the said Court, summoning order dated 25.09.2007, and all the consequential proceedings emanating therefrom. As per the allegations in the complaint (Annexure . . . 1 Crl.Misc.No.M-34477 of 2008 P-1), petitioner No.1, is a partnership concern carrying on the business of perforated sheets, wire mesh and related items, whereas petitioner nos.2 & 3 are partners of petitioner No.1, Incharge and responsible for the conduct of business of petitioner No.1. So far as petitioner Nos.4 & 5, are the persons who had represented the complainant-respondent that they being owners of petitioner Nos.2 & 3 were looking after the business and had been aiding petitioner Nos.2 & 3 in looking after the day to day operations of petitioner No.1 Company. Complainant has arrayed all the above said petitioners in his complaint as accused persons 1 to 5 claiming that petitioner Nos.4 & 5 approached him on behalf of accused Nos.2 & 3 in June 2006 with a request to advance them a temporary loan for a period of six months. Petitioner Nos.4 & 5 in the capacity as authorized representative of petitioner No.1 company and on behalf of petitioner Nos.2 & 3, being partners had been meeting the complainant. Petitioner Nos.2 to 5 made a request to the complainant for advancing a loan of Rs.1 lac on or about 10.07.06 by way of temporary loan to the petitioner No.1 company against the payment of loan of Rs.1 lac a chqeue dated 31.12.06, drawn on Dena Bank, Malabar Hill Branch Mumbai, for a sum of Rs.1 lac for due repayment payable to the complainant-respondent was issued on the request of the complainant, the petitioner Nos. 2 to 5 have further been advanced a sum of Rs.1 lac on or about 30.06.2006, by way of temporary loan to petitioner No.1 company. The above said money was paid by the complainant to all the petitioners accused . . . 2 Crl.Misc.No.M-34477 of 2008 Nos.2, 3, 4 & 5 and against the said amount, a cheque dated 31.12.2006 drawn on the same bank for Rs.1 lac for due repayment was issued to the complainant. Said loan was for a period of six months. The complainant-respondent called upon all the petitioners to return the money on its due date i.e. 31.12.2006. petitioner Nos.2 to 5 were not in a position to repay the money of Rs.2 lacs, as such, request was made which was agreed to by the complainant. Two cheques dated 31.12.06, copies of which have been attached with, for Rs.1 lac each were presented by the complainant with State Bank of Bikaner, Jaipur, Sonepat. The cheques were dishonoured vide a memo of dishonour with reason “stopped payment by drawer” and “refer to the drawer”. The complainant-respondent sent a statutory notice to the accused on 25.7.07 and 26.07.07, respectively. The accused refused to receive the said notices. The complainant-respondent claimed that the complainant was required to file the complainant on or before 11.09.2007 but the petitioner Nos.2 & 3 and their sons petitioner Nos.4 & 5, with mala fide and dishonest intention just to cause delay in filing of the complaint kept on requesting the complainant for waiting for another period of 10 days to enable them to arrange the entire money as such, with a view to close the chapter of controversy of payment by receiving the entire money and to avoid litigation just to keep harmonious relations agreed to postpone the prospect of filing the complaint, as such, the complaint was filed with delay of 13 days, regarding which a separate application for condonation of delay was filed. The . . . 3 Crl.Misc.No.M-34477 of 2008 petitioners were summoned vide order dated 25.09.2007 (Annexure P-2). Counsel for the petitioners has sought quashing of the complaint (Annexure P-1), of the complainant-respondent and the summoning order (Annexure P-2), inter alia, on the ground that (1) complaint filed by the respondent is barred by time; (2) The Additional Chief Judicial Magistrate, have exercised the discretion of condonation of delay in filing of the complaint without issuing any notice to the petitioners; and (3) No offence or part thereof has been committed within the jurisdiction of Additional Chief Judicial Magistrate, Sonepat. Without admitting the allegations in the complaint, it was contended that as per the complaint entire transaction took place at Mumbai and no part of the cause of action has arisen at Sonepat, as respondent was residing in Mumbai and petitioners are also residing in Mumbai. It was argued that jurisdiction has to be covered from the place where money was agreed to be paid and the Court at another place within whose jurisdiction cheque was merely presented for realization, cannot be said to have the jurisdiction to try the offence. No statutory notice was given to the petitioner Nos.4 & 5 as is evident from the copy of the notice. Petitioner No.3 is an old lady of 65 years and is a house wife and is a sleeping partner. She cannot be prosecuted as she is neither Incharge nor responsible for the conduct of the affairs of the firm. Petitioner No.3 is not a signatory of the cheques being a sleeping partner and petitioner Nos.4 & 5 are neither partners nor . . . 4 Crl.Misc.No.M-34477 of 2008 signatory of the cheques in question. There are no averments in the complaint making out prima facie case against petitioner Nos.2 to 5, in the ingredients laid down under Section 141 of the Negotiable Instruments Act. On the other hand, the complainant himself appeared and sought the dismissal of a petition under Section 482 Cr.P.C., on the ground that the petitioners are guilty of suppressing and withholding material facts from the Court which act would dis- entitle them from any relief. It is an abuse of process of law. In complaint under Section 138 of the Negotiable Instruments Act, in which all the petitioners were summoned for 06.02.2008 and 31.01.2008, the petitioners appeared through Mr.H.R.Desai, Advocate and requested the Court to give them sometime to appear in the Court. The Advocate tendered an undertaking in the Court in writing that he would keep his clients present physically within two months before the trial Court and accordingly the case was adjourned to 07.04.2008. On 07.04.2008, neither the said Advocate appeared nor the petitioners came present. Therefore, non-bailable warrants were issued against the petitioners. On 01.04.2008, the petitioners instead of appearing before the trial Court despite undertaking chose to file a revision application for quashing of the complaint pending in the trial Court. On 10.11.2008, when the complaint was fixed before the trial Court as well as revision was fixed before the Sessions Court, the petitioners did not appear before the trial Court and the matter was adjourned to 01.12.2008. . . . 5 Crl.Misc.No.M-34477 of 2008 However, revision was heard and judgment was reserved on 10.11.2009. On 10.11.2008, accused petitioner No.4, Kartik Dilip Parikh, against whom non-bailable warrants pending in execution and who had been evading his arrest pertaining to non-bailable warrants, was apprehended by the police and was produced before the Additional Chief Judicial Magistrate, Sonepat, on the same very day, he was produced before the trial Court where he was admitted to bail on his furnishing bail bond in the sum of Rs. 1 lac with one surety. He was further directed to make payment of Rs.2 lacs on next date of hearing and matter was adjourned to 01.12.08. On 10.11.08, the petitioners also withdrew the revision petition filed by them in the Sessions Court. The respondent vehemently urged that petitioner No.4/accused No.4 on 11.10.2008, had admitted the liability that the amounts were due and payable by the accused and offered to make payment in installments. In view of his admission before the trial Court, to make the payment of Rs.2 lacs on next date of hearing, he is estopped on account of his conduct. He has also waived his right to challenge the court proceedings as well as the territorial jurisdiction of Sonepat. The bail bond of petitioner No.4, were cancelled on 1.12.08. This petition was filed by the petitioners on 5.12.08, for quashing of the complaint pending in the trial Court at Sonepat, whereas the date fixed before the trial Court was 15.12.08. On 15.12.08, Advocate for the petitioners appeared and produced the said order dated 9.12.2008 granted by this Court. In view of the above circumstances, the complainant submitted that the liability has . . . 6 Crl.Misc.No.M-34477 of 2008 been admitted and an undertaking in writing was given on 11.11.08 by the petitioner No.4 before the trial Court to pay the amount, thus, the petition deserves to be dismissed. He also argued that the petitioners are guilty of suppressing above said material facts, as such, they have played fraud on the Court. Another point raised by the respondent is that the petition is not maintainable as same grounds have been taken by the petitioners in criminal revision which was withdrawn. The present petition is bad for non-joinder of necessary parties. Challenging the petition as mala fide it was argued that the petition be dismissed. The respondent has relied upon AIR 1963 SC 786, Udit Naraain Singh Malpaharia Vs. Additional Member Board of Revenue, Bihar and another, to contend that when necessary party i.e. the State is not impleaded, the relief under Article 226 of the Constitution of India, cannot be granted. He relied upon (2008) 12 Supreme Court Cases 481, K.D.Sharma Vs.Steel Authority of India Limited and others , to argue that Writ petition deserves to be dismissed when a party approaching the High Court conceals the material facts. Prestige Lights ltd. Vs. State Bank of India, (2007) 8 Supreme Court Cases 449, was relied upon in support of contention that suppression of material facts will not entitle a party to any relief from the High Court, regarding territorial jurisdiction. He placed reliance on K.Bhaskaran Vs.Sankaran Vaidhyan Balan and another, (1999) 7 Supreme Court Cases 510, and Shamshad Begum (Smt.) Vs.B.Mohammed, (2008) 13 Supreme Court Cases . . . 7 Crl.Misc.No.M-34477 of 2008 77, and M/s A.K.Desai and Co. and ors. Vs.State of Punjab and Ors., 2008 (3) Crimes 316 (P&H), to contend that if 5 different acts i.e. drawing of cheque; presentation of cheque to the bank; return of the cheque; unpaid by drawee bank; giving notice in writing to the drawer of the cheque; demanding payment of the cheque amount; and failure of the drawer to make payment within 15 days of the receipt of the notice, has taken place in the territorial jurisdiction of a Court, the trial Court will have jurisdiction. It was held that as per Section 178(d) Cr.P.C., complainant can choose anyone of those Courts having jurisdiction over anyone of the local areas within the territorial limits of which any of the above said 5 acts has taken place. The respondent referred to the principle of waiver as discussed in AIR 1968 Supreme Court 933, Associated Hotels of India Limited Vs.S.B.Sardar Ranjit Singh, to contend that waiver is an intentional relinquishment of a known right. I have heard the counsel for the petitioners as well as the respondent at length and gone through and appreciated the judgments cited by them. The first question which requires to be determined in the present case is whether all the petitioners can be proceeded against in a complaint under Section 138 of the Negotiable Instruments Act, on the basis of the allegations in the complaint. Accused petitioner No.1 is a Company on whose behalf the cheques in controversy had been issued. As per the averments in the complaint, it is not reflected that all the petitioners accused Nos.2 to . . . 8 Crl.Misc.No.M-34477 of 2008 5 at the time of commission of alleged offence were incharge of and responsible for the conduct of business of the Company. Under Section 141 of the Negotiable Instruments Act, 1881, a prosecution could be launched not only against the Company on behalf of which the cheque issued had been dishonoured but it could also be initiated against every person who at the time of offence was Incharge and was responsible for the conduct of the Company. It is not indicated in the complaint as to how and in what manner, petitioner Nos.3,4 & 5 are Incharge and responsible for the conduct of the business of the Company. Even the summoning order is silent regarding the involvement of petitioner Nos.3 to 5. It was incumbent upon the trial Court to appreciate the evidence in context to provisions of Section 141 of the Negotiable Instruments Act. It has also rightly been highlighted that petitioner Nos.4 & 5, Kartik Dilip Parikh and Ganesh Dilip Parikh, had not been issued a notice under Section 138 of the Negotiable Instruments Act. A perusal of the notice (Annexure P-4) dated 25.07.07, sent by the complainant indicates that no notice had been sent to them. The trial Court without examining the said aspect of the matter issued summoning order against all the accused in a casual manner. I have also considered the plea of the respondent that on account of waiver of their rights regarding the plea of jurisdiction by submitting to the jurisdiction of Sonepat, the petitioners are estopped from raising the objection of territorial jurisdiction. . . . 9 Crl.Misc.No.M-34477 of 2008 I have also considered the contention of respondent that petitioner No.4, had been arrested pursuant to the non-bailable warrants issued in the complaint and that in custody, he was made to suffer a statement that a sum of Rs.2 lac will be paid by him. It is settled principle of law that there is no estoppel against the law. The complainant-respondent company had been able to get the summons issued against the petitioner from a Court and subsequently got non-bailable warrants issued prima facie without substantiating the allegations against all the petitioners. The appreciation of all the circumstances indicates that admittedly there has been a delay of 13 days in filing of the complaint and a Court has got a discretion to condone the delay in filing of the complaint as per the provisions of Section 142(b) of the Negotiable Instruments Act , which was incorporated w.e.f., 06.02.2003, vide Act No.55 of 2002. Section 142 reads as follow: - “142.Cognizance of offences.- Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a) no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque; (b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138; Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient . . . 10 Crl.Misc.No.M-34477 of 2008 cause for not making a complaint within such period. (c)no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138.” The proviso to Section 142 (b) which was incorporated in the year 2003, indicates that the cognizance of a complaint may be taken by a Court after the prescribed period only after the complainant satisfies the Court that he had sufficient cause for not making the complaint within the said period. In the present case, the reason for delay in filing of the complaint has been mentioned in para 18 of the complaint to the effect that complaint was required to be filed before 11.09.2007. but the accused and his sons with mala fide and dishonest intention just to delay the filing of the complaint, kept on requesting the complainant for waiting for another period of 10 days time to enable them to arrange the entire money. In order to keep harmony in relations, the complainant had agreed to postpone the filing of complaint, as such, the delay of 13 days was caused. The said averments had to be established after issuing notice to the accused persons. Even before issuing the notice to the accused persons, the leaned Magistrate should have gone into the allegations against the accused before issuing summons. This question came up before the Delhi High Court in case Prashant Goel Vs. State, reported in 2006-DLT-134-221, in which in para 4, it was held as under :- “It may be noted that when Section 138 was . . . 11 Crl.Misc.No.M-34477 of 2008 added, there was no provision for condonation of delay in filing the complaint under the said provisions. This power to them to condone the delay has been conferred by amendment made vide Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002. Thus, the Magistrate is now entrusted with the power to condone the delay. Therefore, when the complaint is filed, which is time barred and along with the complaint an application for condonation of delay is preferred, appropriate procedure would be issue notice only in the application to the other side without taking cognizance of the complaint. On notice being issued and after hearing the parties, the Court comes to the conclusion that there is no ground to condone the delay then application for condonation of delay is to be dismissed which will entail in dismissing of complaint as well as barred by limitation. On the other hand, if the delay is condoned, then the MM can condone the delay which will have the effect of the complaint as initially filed and the learned MM can then deal with the complaint in accordance with procedure contained in Section 200 Cr.P.C. In any case on an application for condonation of delay, it is necessary to issue notice to other side before condoning the delay.” I am also of the view that whenever a complaint under Section 138 of the Negotiable Instruments Act, is filed with ground for condonation of delay, an application for condonation of delay is to be filed under Section 142(b) of the Negotiable Instruments Act before condoning the delay or before adopting the . . . 12 Crl.Misc.No.M-34477 of 2008 procedure contained in Section 200 Cr.P.C. It is necessary for the concerned Magistrate to issue notice to the other side. Without expression of any opinion regarding the other pleas raised by the petitioners, the summoning order dated 25.09.2007 (Annexure P2), deserves to be set aside on the sole ground that before summoning the petitioners as accused, the Additional Chief Judicial Magistrate, Sonepat, ought to have issued a simple notice to the respondents, in the application for condonation of delay and after hearing the parties, the cognizance of the complaint could have been taken. On account of the said sole illegality, the summoning order is hereby set aside with liberty to the complainant to seek the adjudication of the application for condonation of delay. The trial Court after taking into consideration all the circumstances, put forth by the petitioners explaining the delay would pass a speaking order. In case, the trial Court opted to condone the delay, it will be open to the trial Court to record the preliminary evidence afresh and make up its mind whether all or any of the petitioners are required to be summoned. Taking into consideration, the specific allegations against the petitioners, the petition is allowed. The summoning order dated 25.09.2007 (Annexure P2), is set aside, solely on the ground that notice had not been issued in the application for condonation of delay under Section 142(b) of the Negotiable Instruments Act, to the petitioners. As the petition has been allowed on the said ground, it is not necessary to adjudicate upon the other pleas raised by the . . . 13 Crl.Misc.No.M-34477 of 2008 petitioners which are left open to be adjudicated at an opportune time, if raised, in accordance with law. Respondent-complainant is directed to appear before the trial Court on 23.10.2009. (M.M.S.BEDI) JUDGE September 01, 2009. rka . . . 14