CRIMINAL MISCELLANEOUS No.15352 OF 2003 In the matter of an application under Section 482 of the Code of Criminal Procedure ------------- Sandeep Devgun, Son of Sri P.P. Devgun, resident of G-17, Ashok Vihar, P.O.& P.S. Ashok Vihar, New Delhi-100 052 --------------- Petitioner Versus 1. THE STATE OF BIHAR 2. Mr. Abhay Kumar Singh, Son of Sri Radhey Shyam Singh, Prof. Amblence Corporation, presently at B/31, Budha Colony, Patna - 800001 ------- Opp.Parties. ------------- For the petitioner: Sri Madhuresh Prasad, Advocate For the State: Sri Raj Ballabh Singh, A.P.P. -------------- P R E S E N T THE HON'BLE MR. JUSTICE RAKESH KUMAR Rakesh Kumar, J. The sole petitioner , while invoking inherent jurisdiction of this Court under Section 482 of the Code of Criminal Procedure, has prayed for quashing of an order dated 19.4.2002 passed by Sri P.N.Sharma, Judicial Magistrate, 1st Class, Patna in Complaint Case No.178( C) of 2002. By the said order, learned Magistrate has taken cognizance of offences under Sections 420 and 120 B of the Indian Penal Code and also under Section 138 of the Negotiable Instrument Act (for short “N.I.Act”). 2. Short fact of the case is that Opp.Party no.2 filed a complaint in the court of learned Chief Judicial Magistrate, Patna, which was numbered as Complaint Case No.178 ( C) of 2002 against altogether nine accused persons including the petitioner. The petitioner has been arrayed as accused no.6 in the complaint petition. It was alleged that accused persons had committed offences under Section 406, 420 and 120 of the Indian Penal 2 Code and 138 of the N.I.Act. In the complaint petition it was asserted that an agreement was entered in between the complainant and M/S Televista India Pvt. Ltd., whereby the complainant was appointed as C& F Agent .As per agreement, the complainant was required to make deposit Rs.15, 00,000/- as security amount. However, the complainant initially made payment of Rs.14, 00,000/-. As per agreement, for minimum guarantee some of the amount was to be paid to the complainant by accused persons along with certain interest. It was alleged that Rs.1, 00,000/- out of first minimum guarantee was adjusted against minimum guarantee amount. The complainant had categorically asserted that the petitioner and other accused persons were directors of the said Company, i.e. M/S Televista India Pvt. Ltd. Agreement was entered on 1st May, 1998. Thereafter, despite rigorous persuasion neither as per the agreement, the godown was provided nor any payment was made to the complainant. In the month of September,1998, after vigorous persuasion by telephonic calls and personal visit of the complainant to accused nos.2,4 and this petitioner issued a draft of Rs.50,000/- and two cheques of Rs.25,000/- each against the mounting dues, issued on Corporation Bank , S.S.I. Branch, Noida, Uttar Pradesh, were handed over to the complainant, but the cheques were dishonoured by the Bank on account of insufficiency of funds. After the cheques were dishonoured , it was alleged by the complainant that he informed the accused persons including the petitioner. Even, in the month of October, 2001, two fresh cheques for Rs.25, 000/- each were issued in favour of the complainant. However, those two cheques were not honoured by the Bank. It has further been disclosed in the complaint petition that the complainant had also visited the office of the accused persons and tried repeatedly to 3 keep in touch with the accused persons, who avoided. It was found that the office was locked. On the aforesaid allegation, the complaint was filed. After conducting enquiry, by the impugned order, i.e. order dated 19.4.2002 the learned Magistrate took cognizance of offences as indicated above. 3. Aggrieved with the order of cognizance, the petitioner approached this Court by filing the present petition, which was finally admitted on 24.3.2004. While admitting, it was directed that pending disposal of this application, further proceeding in terms of the order dated 28.8.2003 shall remain stayed. The order of stay is still continuing. 4. Sri Madhuresh Prasad, learned counsel appearing on behalf of the petitioner has raised several grounds while assailing the order of cognizance as well as initiation of proceeding so far the petitioner is concerned. It was firstly argued that it was a case of commercial transaction and an agreement was entered in between the complainant and accused persons. According to Sri Prasad, learned counsel for the petitioner, it can be hardly a case of breach of terms and conditions of the agreement and it cannot be termed as a case of cheating or commission of any offence. While referring to averment made in paragraph-14 of the complaint petition, it was argued that the dispute was purely civil in nature and criminal proceeding may not be allowed to continue against the petitioner. According to him, the prosecution will amount of abuse of the process of the court. It was further submitted that the agreement was entered in the year 1998 and when the complainant felt it difficult to recover the due amount by adopting civil course due to the reasons of limitation, the complainant in a designed manner has filed the present complaint petition in the month of January, 2002. It was submitted that the failure to make 4 payment will not attract any Penal Provision. Learned counsel for the petitioner has further argued that offence of cheating is not made out in view of the fact that the complainant had completely failed to establish that there were any mens rea on the part of petitioner to commit an offence of cheating and in absence of mens rea no offence under Section 420 of the Indian Penal Code is made out in the facts and circumstances of the present case. While arguing on the point of non-application of provision of Section 420 of the Indian Penal Code, Sri Madhuresh Prasad, learned counsel for the petitioner has heavily relied on a Judgment of Hon’ble Supreme Court, reported in (2002) 1 SCC 241( S.W. Palanitkar & Ors Vs. State of Bihar & Anr). Learned counsel for the petitioner has referred to paragraph nos.8, 15 & 21 of the said Judgment. Learned counsel for the petitioner has further submitted that in any case, no offence under Section 138 of the N.I.Act is made out in the facts and circumstances of the present case. It has been argued that in the complaint petition, there is no assertion as to on which date, the cheques issued by the petitioner’s company was presented in the Bank, when it was returned on the ground of insufficiency of funds, no date of service of notice within the prescribed period has been mentioned nor it has been stated as to whether the complainant ever approached the accused persons to clear the dues within the specified period as per the basic ingredients of Section 138 of the N.I.Act. On this very point, learned counsel for the petitioner has referred to a Judgment of the Hon’ble Supreme Court, reported in (2009) 14 SCC 683(Jugesh Sehgar Vs. Shamsher Singh Gogi). Learned counsel for the petitioner has specifically referred to paragraph nos.12 and 13 of the said Judgment. In paragraph 12 of said Judgment, the provision of Section 138 of the N.I.Act has been 5 quoted. However, in paragraph-13 of the said Judgment it has been clarified by the Hon’ble Supreme Court regarding ingredients of the said N.I.Act. It would be appropriate to quote paragraph 13 of the said Judgment, which is as follows: “13. It is manifest that to constitute an offence under Section 138 of the Act, the following ingredients are required to be fulfilled: (i) a person must have drawn a cheque on an account maintained by him in a bank for payment of a certain amount of money to another person from out of that account; (ii) the cheque should have been issued for the discharge, in whole or in part, of any debt or other liability; (iii) that cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity whichever is earlier ; (iv) that cheque is returned by the bank unpaid , either because of the amount of money standing to the credit of the 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 the bank; (v) the payee or the holder in due course of the cheque 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 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; (vi) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice. Being cumulative, it is only when all the aforementioned ingredients are satisfied that the person who had drawn the cheque can be deemed to have committed an offence under Section 138 of the Act.” 5. Learned counsel for the petitioner has further relied upon a 6 Judgment of Hon’ble Supreme Court, reported in AIR 1992 (SC) 604( State of Haryana Vrs. Ch. Bhajan Lal & Ors), particularly paragraph 108 of the Judgment. It has been argued that the Hon’ble Supreme Court has held that if any offence is not made out, it would be necessary to inferfere even at the initial stage of a criminal proceeding, while exercising power under Section 482 of the Code of Criminal Procedure. On the aforesaid ground, learned counsel for the petitioner has prayed to quash the order of cognizance. 6. Sri Raj Ballabh Singh, learned Addl.Public Prosecutor appearing on behalf of the State has opposed the prayer of the petitioner. 7. Despite valid service of notice on Opp.Party no.2, none has come forward on behalf of Opp.Party no.2 at the time of hearing of the present petition. 8. Besides hearing learned counsel counsel for the parties, I have also perused the materials available on record, particularly, the averment made in the complaint petition as well as the impugned order. On the basis of averment made in the complaint petition, prima facie the Court is satisfied that the learned Magistrate has not committed any error in taking cognizance of offence , particularly for the offences under Sections 420 and 120 B of the Indian Penal Code. It is not in dispute that the petitioner was one of the directors of the Company. It has also been categorically stated in the complaint petition that the complainant had approached the petitioner also. Fact remains that after agreement, the complainant was persuaded to deposit Rs.15,00,000/-. In the complaint petition, there is specific averment that some of the accused had initially visited the house of the complainant and had persuaded him to appoint as C & F Agent of the accused Company. As per the complaint petition, from time to time, cheques were given to the 7 complainant but all the time the same were dishonoured. The complainant had categorically stated that the due amount was never paid to the complainant. On the basis of averment made in the complaint petition, I am of the opinion that cognizance of offences under Section 420 and 120B of the Indian Penal Code has rightly and legally been taken by the learned Magistrate. So far as application of Section 138 of the N.I.Act is concerned, on the basis of materials available on record of the present case, it would be difficult for this Court to record a definite finding regarding non-application of the said Act. In the present petition, the petitioner has brought on record a copy of the complaint petition. Neither statement of the complainant recorded on S.A. has been brought on record nor evidence of any of enquiry witnesses or any document, which were enclosed with the complaint petition, have been brought on record and, as such, it would not be appropriate to record any finding on application of Section 138 of the N.I.Act in the facts and circumstances of the present case. This point can well be argued or examined at the appropriate stage by the court below. So far as S.W.Palanitkar’case (Supra) is concerned, the fact of that case is not similar to the present case. In the said case, an agreement was entered in between the complainant and accused persons for a period of one year and after expiry of one year, it was extended with mutual agreement. Thereafter, the parties met and the Company offered to supply ammonium sulphate to the Respondent for the period 1997-98 on certain terms. The respondent rejected the offer finding the terms unreasonable and thereafter a complaint was filed. In the present case, the complainant was persuaded by accused persons for being appointed as C& F Agent and thereafter, he was persuaded to deposit a huge amount of Rs.15 lacs and subsequently 8 from time to time on the pretext of making payment, cheques were issued to the complainant, which were dishonoured , as has been alleged in the complaint petition. It appears from the contents of the complaint petition that lastly in the month of October, 2001, cheques were given to the complainant, which also were dishonoured and thereafter the complaint was filed in the month of January, 2002. So far as application of cheating is concerned, the facts stated in the complaint petition prima facie suggest the commission of the offence. It need not to be elaborated that prima facie case means that if there is ground for presuming that the accused has committed the offence ,a court can justifiable say that a prima facie case against him exerts . Even strongest suspicion is enough for holding a prima facie case. It has already been noticed by the Hon’ble Supreme Court in paragraph nos.30 and 32 of a case reported in 1996 (3) Cr.L.J. 2448( State of Maharashtra Vs.Som Nath Thapa), which are as follows: “30. In Antulay’s case ,( AIR 1986SC 2045) , Bhagwati , C.J., opined , after noting the difference in the language of the three pairs of section, that despite the difference there is no scope for doubt that at the stage at which the Court is required to consider the question of framing of charge, the test of “ prima facie” case has to be applied. According to Shri Jethmalani , a prima facie case can be said to have been made out when the evidence , unless rebutted , would make the accused liable to conviction. In our view, better and clearer statement of law would be that if there is ground for presuming that the accused has committed the offence, a Court can justifiably say that a prima facie case against him exists, and so, frame charge against him for committing that offence.” “32. The aforesaid shows that if on the basis of materials on record, a Court could come to the conclusion that commission of the offence is a probable consequence, a case for 9 framing of charge exists. To put it differently , if the Court were to think that the accused might have committed the offence it can frame the charge, though for conviction the conclusion is required to be that the accused has committed the offence. It is apparent that at the stage of framing of charge, probative value of the materials on record cannot be gone into; the materials bought on record by the prosecution has to be accepted as true at that stage.” Particularly at the time of hearing a petition under Section 482 of the Code of Criminal Procedure that too against an order of cognizance, this Court is not required to examine the materials meticulously and in detail. Only prima facie case is to be looked into. So far as Jugesh Sehgal’s case (supra) is concerned, it is true that the Hon’ble Supreme Court has categorically clarified the ingredients for application of Section 138 of the N.I.Act. I have already indicated that in absence of complete material before this Court, it would not be appropriate to record any finding regarding commission of offence under Section 138 of the N.I.Act. However, that fact can well be examined by the concerned court at the appropriate stage. 9. So far as Ch. Bhajan Lal’s case ( supra) is concerned, it is true that the Hon’ble Supreme Court has given certain instances warranting exercise of power either under 482 of the Code of Criminal Procedure or under Article 226 of the Constitution of India for the purpose of quashing of an F.I.R. or complaint or proceeding on certain grounds. If the Court comes to the conclusion that perusal of the complaint petition does not make out a case for commission of any offence, there is no hindrance for a court to interfere with the initiation of such proceeding, but even for exercising inherent jurisdiction in such cases, in paragraph 109 of the said 10 Judgment , Hon’ble Supreme Court has made it clear that even in such situation, this power , i.e. power under Section 482 of the Code of Criminal Procedure is to be exercised in exceptional and rarest of rare cases. It would be appropriate to quote paragraph 109 of Bhajan Lal’s case ( Supra), which is as follows: “ 109. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the Court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the F.I.R. or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice.” 10. On the basis of materials available on record as well as facts and circumstances of the case, the Court is of the opinion that it is not an exceptional and rarest of rare case warranting exercise of inherent jurisdiction in favour of the petitioner and, as such, the Court finds no merit in the present petition and the petition stands rejected. 11. Keeping in view the fact that the order of cognizance was stayed by this Court and the matter remained pending for a long period before this Court, it would be appropriate to direct the court below to proceed with the case expeditiously so that the case may come to its logical end without any further delay. 12. However, it is made clear that whatever observation has been made by this Court may not prejudice the petitioner at any subsequent stage. The observation has been made for just decisions in the present case. 11 With the above observation and direction, the petition stands rejected. Let a copy of this order be sent to the court below forthwith. Patna High Court,Patna Dated : 23rd September,2010 Nawal Kishore Singh/ A.F.R. ( Rakesh Kumar, J.)