1 WP-1767-07.sxw IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION Mhi CRIMINAL WRIT PETITION NO. 1767 OF 2007 Shri Sharan P Khanna ) Age 55 years of Mumbai Indian Inhabitant ) havig office at 105, Dalamal Tower, ) Plot No.211, Free Press Journal Marg, ) Nariman Point, Mumbai 400 021. ).. Petitioner (Orig.complainant) Versus 1. Oil & Natural Gas Corporation Ltd. ) a Company incorporated under the ) Companies Act, 1956 having its ) registered office at Jeevan Bharti ) Tower -II, Connaught Circus ) New Delhi 110 001 and Mumbai ) regional Business Centre Office ) at NSE Plaza Bandra Kurla Complex,) Bandra (E) Mumbai 400 051. ) 2. State of Maharahtra ) Through Public Prosecutor )..Respondents Shri P.D.Prasad Rao, Advocate, for the petitioner. Shri S.P. Bharti, Advocate, for the respondent No.1. Ms. S.V.Gajare, APP, for the respondent No.2. CORAM: J.H.BHATIA,J. DATE : 29th July, 2010. JUDGMENT: 2 WP-1767-07.sxw 1. Rule. Rule made returnable forthwith. Heard the learned Counsel for the parties. 2. To state in brief, the petitioner is the owner of certain premises. On 29.10.1983, an agreement was entered into between the petitioner and the respondent No.1 in respect of the suit premises. As per that agreement, the premises were given to the respondent No.1 on license on payment of license fee of Rs. 3 lakh per month inclusive of all Municipal taxes. This agreement was to be valid for a period of 5 years. The same agreement also provided that the respondent No.1 would have an option to purchase the premises within a period of 5 years from the date of agreement. The consideration for sale of the property was to be decided mutually by negotiation. However, the respondent No.1 made payment of Rs.1,28,52,000/- to the petitioner as earnest money out of the consideration for sale of the property as could be determined later on. It was also provided that if the option to purchase the property was not exercised within 5 years, the respondent No.1 would vacate the premises and hand over the possession to the petitioner and the petitioner would repay the earnest amount of Rs.1,28,52,000/-. The said amount was not to carry any interest. Admittedly, within a period of 5 years from the date of agreement, the respondent No.1 did not exercise the option to purchase the property and, therefore,the agreement for sale 3 WP-1767-07.sxw came to an end as per the provisions of the said agreement itself. 3. Inspite of expiry of the period of five years, the respondent did not vacate the premises and continued to hold on possession. The petitioner repeatedly wrote letters to the respondent to vacate the premises. According to him, due to lapse of time, the property tax and other taxes and levies by the Municipal Corporation went on increasing and therefore, the licence fee was liable to be raised and the respondent would be liable to pay revised license fee as well as pay Municipal taxes. About this, he had a huge claim against the respondent. Admittedly, some other property of the petitioner was also taken by the respondent on lease/license for a period of 5 years and in respect of that property, the rent/license fee was increased and the Municipal taxes etc. were also paid in addition to the rent after expiry of lease period. That payment was made by set off against the earnest money in respect of that property. The learned Counsel for the respondent contends that in respect of this property also all such additional payments have been made and the petitioner has been reimbursed about the payments which he made towards outgoings to the Society. This is disputed by the learned Counsel for the petitioner. It is not necessary to enter into that controversy for decision of the present petition. 4 WP-1767-07.sxw 4. The petitioner was insisting the respondent to vacate the premises, but the respondent was not willing to vacate the same without repayment of the earnest money. According to the petitioner, he had a huge claim against the respondent and the said amount could be adjusted against the earnest money and still heavy amount was due from the respondent to the petitioner. Admittedly, in view of the insistence by the respondent for refund of the earnest money as condition for vacating the premises, on 30.6.2005, the petitioner issued a cheque of Rs.1,28,52,000/- in favour of the respondent and handed over the same to its officers. On receipt of the said cheque, the respondent immediately vacated the premises and the petitioner was put in possession of the same. However, after taking possession of the premises, on the same day the petitioner asked its bankers i.e. the drawee Bank to stop payment and, therefore, on presentation the cheque was dishonourede and returned unpaid. The petitioner had also informed the respondent that he had given stop payment notice to the Bank. After the cheque was returned unpaid the respondent issued a notice demanding the amount. Inspite of service of notice, payment was not made within the stipulated period and therefore the respondent filed a complaint under Section 138 of Negotiable Instruments Act and it came to be registered as Criminal Case No.632/SS/2005. Process was issued and trial proceeded. That complaint was dismissed and the petitioner was acquitted by the trial Court. Admittedly, the 5 WP-1767-07.sxw respondent has preferred an appeal which is admitted and is pending. 5. Pending the case under Section 138 N.I. Act in March 2006, the respondent filed a complaint under Section 420 IPC against the petitioner in the Court of Addl. C.M.M. 47th Court, Esplanade, Mumbai and it was numbered as Case No.55/MISC/2006 and was closed without taking cognizance as per the order dated 9.11.2006. That order of the Addl. C.M.M. was challenged by the respondent in Criminal Revision Application No. 1394 of 2006 which was allowed by the Sessions Court and the order passed by the Addl. C.M.M. was set aside. The trial Court was directed to go through the averments in the complaint and to pass appropriate order on the complaint. That order is challenged in the present petition by the petitioner-accused. 6. Mr. Rao, the learned Counsel for the petitioner vehemently contended that the stop payment notice was given by the petitioner to the Bank in view of the huge claim against the respondent. According to him, the petitioner was not liable to pay any amount to the respondent and, on the contrary, the respondent was liable to pay huge amount to the petitioner even after adjustment of the amount of earnest money. According to him, under force, threat or duress from officers of the respondent, the petitioner was compelled to issue the cheque in favour of the 6 WP-1767-07.sxw respondent to take possession of the premises because from November 1998 till June 2005, i.e. for a period of about 17 years, the respondent was holding on possession of the premses without any legal right, title or interest or any agreement with the petitioner. According to him, had he not issued the cheque, he would not get back possession which is held illegally by the respondent and, therefore, after trial he was also acquitted for the offence punishable under Sec. 138 of Negotiable Instruments Act. He contends that it is purely a civil dispute between the parties and the suit has been filed. The respondent has also filed a suit for recovery of money and alternatively for restoration of possession. The petitioner has also filed a counter-claim against the respondent in the said suit. The civil disputes are pending between the parties before the Courts. It is further contended that the alleged offences under Sec. 138 and under Sec. 420 IPC were committed during the same transaction and at the same time and the respondent had filed a case under Sec. 138 and after trial, the petitioner has been acquitted and therefore a case under Sec. 420 IPC could not be filed separately and subsequently. It is contended that it amounts to double jeopardy. He further contends that the complaint could have been filed under both the sections and he could be required to face the trial for both the offences at the same time and therefore there is no justification to require him to face trial again for the offence under Sec. 420. 7 WP-1767-07.sxw 7. On the other hand, the learned Counsel for the respondent- complainant vehemently contended that from the facts it is clear that the petitioner represented to the respondent that he was going to make payment of the earnest money by cheque and acting on that representation, the respondent vacated the premises. Had he not made such a representation and had he not issued the cheque for repayment of the money, the respondent would not have vacated the premises and the question about rights of the parties in respect of the property could be determined as per law. As the petitioner after having taken back possession of the premises immediately stopped the payment after giving cheque and even before it could be presented, it is clear that he had no intention to make the payment and the representation made by him, that he would make the payment of the earnest money if possession is given to him, was not true to his own knowledge and therefore with a dishonest intention he had made that false representation and thus he had cheated the respondent and having been so cheated, the respondent had delivered the possession of the property to him and thus, the offence under Sec. 420 IPC was committed. The learned Counsel contended that the ingredients of the offence under Sec. 138 N.I. Act and under Sec. 420 IPC are totally different even though these two offences were committed during same transaction. The learned Counsel contended that even though both these offences could have been tried together in view of the provisions of Sec. 8 WP-1767-07.sxw 220 Cr.P.C., still the said provision is only an enabling provision and it is not mandatory and if two separate complaints are filed and accused is tried separately for these offences, it will not be illegal nor trial would be vitiated. The learned Counsel also contended that the principles of double jeopardy would not be applicable as the accused is acquitted under Sec.138 though the order of acquittal is still under challenge and it is not final. According to the learned Counsel for the respondent, in view of these circumstances, the complaint under Sec. 420 IPC is tenable and the impugned order passed by the Sessions Court does not suffer from any infirmity or illegality or irregularity and it need not be interfered with. 8. Facts of the case need not be repeated. Even though, according to the petitioner, he had a huge claim against the respondent towards the property and other taxes and outgoings and also higher rate of rent/license fee for illegally holding on possession of the premises for a period of 17 years beyond the agreed period of 5 years fact remains that for all these claims, the petitioner could have legal remedy before the appropriate forum in the form of suit for eviction and possession and for recovery of money, but he did not file any such suit. It was well-known to him that the respondent was insisting for refund of the earnest money as condition precedent for handing over possession of the premises to him. 9 WP-1767-07.sxw Having failed to persuade the respondent about his claim and the right to take back possession without repayment of money, the petitioner agreed to repay the earnest money. Prima facie, it appears that the petitioner represented to the respondent that he would issue a cheque towards repayment of the earnest money and on receipt of the cheque, the respondent should hand over possession of the premises to him. It appears that the respondent accepted the cheque and believing the petitioner that the cheque would be honored the respondent handed over the possession of the premises without waiting for actual encashment of the cheque. Had the respondent not delivered the possession immediately on receiving the cheque or had he postponed the handing over of possession till the cheque was honoured, the petitioner could not have issued the stop payment notice to the Bank, but the respondent believed his representatino that the cheque would be honoured and under that belief, the respondent handed over possession immediately without even waiting for encashment of the cheque. Having taken possession from the respondent, the petitioner immediately sent stop payment notice to the Bank and also informed the respondent accordingly. Admittedly, because of the stop payment notice, the cheque was dishonoured. Prima facie, it appears that to the knowledge and belief of the petitioner he did not want to act upon his representation that the cheque would be honoured and the payment of money would be made to the respondent and inspite of that, he made a false 10 WP-1767-07.sxw representation to that effect and made the respondent believe that the cheque would be honoured. Thus, prima facie, he had cheated the respondent and the respondent having been so cheated, delivered the possession of the premises to the petitioner. Had he not made such a representation and had he not cheated in this manner, the respondent would not have handed over possession of the premises to the petitioner. Therefore, prima facie, it appears that the offence punishable under Section 420 was committed by the petitioner. looking to the facts of the case, prima facie, all the ingredients of the offence punishable under Sec. 420 appear to have been fulfilled. 9. Though the offence under Sec.138 also appears to have been committed because the cheque was dishonoured, it is not necessary to make any more comments as the accused has been acquitted in that case and appeal against acquittal is pending before the High Court. However, it will be useful to look to the ingredients of the offence punishable under Sec. 138. That offence is committed when a person draws the cheque on account maintained by him with a banker for payment of any amount of money to another person for the discharge, in whole or in part, of any debt or other liability and the cheque is returned unpaid either for want of sufficient funds in the account or insufficient arrangement with the Bank for payment of money. Certain conditions are required to be fulfilled 11 WP-1767-07.sxw before the offence is actually said to have been committed. Broadly, the ingredients and requirements for the offence punishable under Sec. 138 are as follows :- (a) The cheque should have been issued for the discharge of any debt or other liability. (b) The cheque should have been dishonoured and returned unpaid for want of sufficient funds or insufficient arrangement with the Bank. (c) The cheque should have been presented to the drawee Bank within six months from the date on which it was drawn or within the period of validity, whichever is earlier. (d) After intimation that the cheque is dishonoured, the payee or the holder in due course of the cheque should make a demand of the money by giving a notice to the drawer of the cheque within 30 days of receipt of information that the cheque was returned unpaid. 12 WP-1767-07.sxw (e) The drawer should have failed to make the payment within 15 days from the date of the receipt of the notice. (f) The complaint should have been filed within one month from the date when the cause of action had arisen on expiry of the period for making the demand. Only if all these conditions are fulfilled, the Court can take cognizance of the offence under Sec.138 mention ingredients of Sec.420. 10. Thus the ingredients of the offence under Section 138 are totally different from the offence of cheating punishable under Section 420 and thus they are totally different offences. 11. The principle of double jeopardy is incorporated in Article 20 clause (2) of the Constitution which provides that no person shall be prosecuted and punished for the same offence more than once. Thus, under Article 20 clause (2), there is a bar against prosecution and punishment for the same offence twice. If the person is not convicted and punished, Article 20 clause (2) does not give protection against prosecution for the same offece. However, the protection under 13 WP-1767-07.sxw Sec. 300 Cr.P.C. is wider in scope. Section 300(1) provides that a person, who had once been tried by a Court of competent jurisdiction for an offence and convicted or acquitted of such offence shall, while such conviction or acquittal remains in force, not be liable to be tried again for the same offence nor on the same facts for any other offence for which a different charge from the one made against him might have been made under section 221(1). As pointed out above, the offence under Section 138 N.I. Act is totally different from the offence punishable under Section 420 IPC. Admittedly, the accuses was tried and acquitted for the offence under Sec. 138, but he was never put to trial nor he was convicted or acquitted for the offence under Sec. 420 before any Court before filing of the complaint in question. Therefore, the provisions of Article 20 clause (2) or Section 300 (1) Cr.P.C. do not come to the rescue of the petitioner. 12. In V. Kutumba Rao vs. M.Chandrasekhar Rao and Anr. 2003 Cri.L.J.4405, the Andhra Pradesh High Court held that the ingredients of the offence under Section 138 N.I. Act and Sec. 420 IPC are completely different and therefore both these offences are distinct and separate and observed thus in para 11 :- "11. In my considered opinion the offence under 14 WP-1767-07.sxw Sections 420, IPC and 138 of the Act are distinct and separate offences. If a person fraudulently or dishonestly induces another person to deliver any property or to do or omit to do anything which he would not do or omit if he were not deceived and such act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property commits an offence of cheating. Such a person commits the offence punishable under Section 420, IPC. In a prosecution under Section 138, Negotiable Instruments Act any inducement so as to make the other person to deliver any property etc. as defined in Section 415, IPC, is not an ingredient. If a person issues a cheque and subsequently if the cheque was dishnoured by the bank for want of funds etc. and thereafter even after issuance of demand notice, the said person fails to pay the amount covered by the cheque within the time stimulated by Negotiable Instruments Act, that person commits an offence punishable under section 138 of the Act. The question of inducement to other person to part with any property to do or omit to do anything does not at all arise for a decision in a prosecution under Section 138 of the Act. The offence under Section `138 of the Act is not committed on the date of issuing the cheque. The offence happens after it was dishonoured by the bank for specified reasons and thereafter even after demand the person concerned fails to pay the amount covered by the cheque to the other person. These facts do not fall for a decision in a 15 WP-1767-07.sxw prosecution under Section 420, IPC. Sometimes at the time of issuing the cheque a person may induce the other person to part with property etc. If such inducement is dishonest or fraudulent he may be committing the offence of cheating and thereby he becomes liable for prosecution. If such a person later within the time stipulated under the provisions of Negotiable Instruments Act repays the other person amount covered by the cheque he will not be liable for prosecution for the offence under Section 138 of the Act but still he can be prosecuted for the offence of cheating if at the time of issuing the cheque he had fraudulently or dishonestly induced the other person to part with property etc. In a prosecution under Section 138, Negotiable Instruments Act, the mens rea viz., fraudulent or dishonest intention at the time of issuance of cheque need not be proved. However in a prosecution under Section 420, IPC mens rea is an important ingredient to be established. In the former case the prosecution has to establish that the cheque was issued by accused to discharge a legally enforceable debt or other liability. This ingredient need not be proved in a prosecution for the charge under Section 420, IPC. Therefore, the two offences covered by Section 420, IPC and 138, Negotiable Instruments Act are quite distinct and different offences even though sometimes there may be overlapping and sometimes the accused person may commit both the offences. The two offences cannot be construed as arising out of same set of facts. Therefore, 16 WP-1767-07.sxw Section 300, Cr.P.C. is not a bar for separate prosecutions for the offences punishable under Section 420, IPC and 138 of the Negotiable Instruments Act. The question of application of the principles of double jeopardy or rule estoppel does not come into play. The acquittal of the accused for the charge under Section 420. IPC does not operate as estoppel or res judicata for a finding of fact or law to be given in prosecution under Section 138 of the Negotiable Instruments Act. The issue of fact and law to be tried and decided in prosecution under Section 420, IPC are not the same issue of fact and law to be tried in a prosecution under Section 138 of the Act. I, therefore, do not find any force in the contentions advanced on behalf of the accused for quashing the proceedings in C.C. No. 737 of 1999. Therefore, both the revision petition and quash proceedings are liable to be dismissed." 13. The learned Counsel for the petitioner placed reliance upon Gorantla Venkateswara Rao v. Kolla Veera Raghava Rao and Anr. 2006 Cri. L.J.1. In that case, the plaintiff had filed criminal case under Section 138 N.I. Act. During trial, it was revealed that the accused had closed his account with the bank long prior to the date of issuing the cheque and therefore subsequently he filed complaint under sec. 420 IPC. The Andhra Pradesh High Court in given facts held that causes of action in both the cases were different and they could 17 WP-1767-07.sxw not be treated as cases on similar facts and therefore subsequent complaint under Section 420 was maintainable and was not hit by Section 300 Cr.P.C. The learned Counsel, however, tried to contend that if the commission of offence under Section 420 would not be within knowledge of the respondent at the time of filing the complaint under Section 138,he could have filed the complaint under Sec. 420 subsequently and separately, but according to the learned Counsel, in the present case, facts were known to the respondent on the date when the complaint was filed under Section 138 and therefore a single complaint could have been filed for both the offences so that the accused could be tried for both the offences during single trial. 14. The learned Counsel for the petitioner also relied upon In re Godayarthy Bhashyakaracharyulu AIR 1960 AP 164. In that case, the accused was sought to be prosecuted and tried for misappropriation of Rs.31/- through falsification and forgery of material accounts. Earlier, he had been convicted for the similar offence said to have been committed during the currency of that year. Both these cases could have been tried together. The Andhra Pradesh High Court held that even though the principle of `autrefois convict' embodied in Section 403 of the old Cr. P.C. (Section 300 Cr.P.C.1973) 18 WP-1767-07.sxw could not be applied because the accused was not previously convicted and sentenced for the same offence, still under the inherent powers of the High Court in