1 vks IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPLICATION NO.4510 OF 2009 Mrs. Neeta Mukesh Jain, age:34 years, residing at flat No.704 Alumusalla Building, Opp. Rollo Garden, Port Office Sarjah (U.A.E.) Applicant versus 1. The State of Maharashtra, 2. Mr. Chandresh K Nishar age: 31 years, residing at: 210, 3rd floor, Vinod Mahal, Opp. Worli Market, Worli Naka Mumbai 400 018. Respondents. CRIMINAL APPLICATION NO.4511 OF 2009 Mrs. Neeta Mukesh Jain, age:34 years, residing at flat No.704 Alumusalla Building, Opp. Rollo Garden, Port Office Sarjah (U.A.E.) Applicant versus 1. The State of Maharashtra, 2. Mr. Hasmukh Kanji Gala age: 54 years, residing at , 158/160, 3rd floor, Krishna Niwas Bhavani Shankar Road, Dadar Mumbai 400 028. appln4510&orsof09.sxw 2 CRIMINAL APPLICATION NO.4512 OF 2009 Mrs. Neeta Mukesh Jain, age:34 years, residing at flat No.704 Alumusalla Building, Opp. Rollo Garden, Port Office Sarjah (U.A.E.) Applicant versus 1. The State of Maharashtra, 2. Mr. Kunji Amrutlal Bid, age: 31 years, residing at: Vinod Mahal, Opp. Worli Market Mumbai 400 018. Respondents. CRIMINAL APPLICATION NO.4513 OF 2009 Mrs. Neeta Mukesh Jain, age:34 years, residing at flat No.704 Alumusalla Building, Opp. Rollo Garden, Port Office Sarjah (U.A.E.) Applicant versus 1. The State of Maharashtra, 2. Mr. Mukesh Kanji Gala block No.158/160, 3rd floor Krishna Niwas, Bhavani Shankar Road Dadar, Mumbai 400 028. Respondents. Mr. Sandeep C. Kekane, i/b M.K. Kocharekar for the applicants in all the matters. Ms. A.A. Mane, APP for the respondent No.1 State.. appln4510&orsof09.sxw 3 CORAM: J. H. BHATIA, J. DATED: 5th July, 2010. Judgment 1. This group of applications may be disposed off by common order as the parties are same and the question involved in all these applications is also same. Heard learned counsel for the parties. 2. Respondent No.2 in each of all these applications is original complainant and the applicant is the original accused. The Complainant had filed complaints under section 138 of the Negotiable Instrument Act on 3.8.2005 and the same were registered as Criminal Case No.5343/SS/2005, 5344/SS/2005, 5345/SS/2005 and 5346/SS/2005. It was the case of the complainant/Respondent No.2 in each of the complaint that the applicant/accused had approached them for loan and therefore, they have given loan of Rs.2,00,000/-, Rs.2,00,000/-, Rs.2,50,000/- and Rs.1,50,000/- respectively. 3. The applicant issued four different cheques being cheque No.054816 dated 12.4.2005 for Rs.2,00,000/-, cheque No.054817 dated 21.4.2005 for Rs.2,00,000/-, cheque No.054818 dated 21.4.2005 for Rs.1,50,000/- and cheque No.054819 dated 5.5.2005 appln4510&orsof09.sxw 4 for Rs.2,50,000/-. All these cheques were presented and were dishonoured on different dates. Three of them were dishonoured on 28.5.2005 and one was dishonoured on 14.6.2005. On getting intimation, the complainant in each case issued demand notice dated 25.6.2005 to the accused. The Notices were received and the accused also replied through advocate on 8.7.2005. As the payment was not made, on 3.8.2005, complaints were filed in each case. On 3.8.2005, the Metropolitan Magistrate of the 7th Court, Dadar, directed to issue process against accused in each of the said case. 4. That order was challenged by the applicant by filing revision applications. According to her, she had shifted to Sharjah to live with her husband on 16.11.2001 and is living there with her husband and children. According to her, she was not in Bombay when the loan was allegedly advanced. She also denied that she had handed over the disputed cheques in favour of complainant in April, 2004. She contended that she used to keep her blank cheques with her father and those cheques appears to have been misused. It was also contended that the learned Magistrate had issued process without following the procedure laid down under section 200 and 202 of Criminal Procedure Code, because the process was issued without recording verification statement of the appln4510&orsof09.sxw 5 complainant and without holding any inquiry. It was contended that it was necessary to conduct enquiry because the accused is not living within the territorial jurisdiction of the learned Magistrate. The learned Additional Sessions Judge by order dated 23.1.2008, allowed those revision applications and set aside the order passed by the Magistrate issuing process and directed to proceed with the matter from the stage of verification statement and to take steps as provided under the amended section 202 of Criminal Procedure Code. The accused, being not satisfied with that order in the revision application, filed Writ Petition Nos.319 of 2008, 320/2008, 321/2008 and 322 of 2008. However, those writ petitions were dismissed by this Court on l8.7.2008 as this Court found that the order passed by the Additional Sessions Judge to follow the procedure laid down in Criminal Procedure Code needed no interference. 5. It appears that after the said order, on l8.9.2008, the verification statement of the complainant was recorded. On behalf of complainant the Officer from the drawee bank i.e. Bank of Baroda, Jacob Circle Branch, was examined. After recording verification statement and evidence under section 202 of Cr. Pro Code, , the learned Magistrate passed fresh order dated 24.4.2009, to issue process against the accused u/s 138 of Negotiable appln4510&orsof09.sxw 6 Instrument Act and the said order in each of the four cases is challenged in the present four applications under section 482 of the Criminal Procedure Code. 6. It is contended on behalf of the applicant that the verification statement of the complainant shows that the amount of loan was paid to Jayantilal Jain, the father of the accused and that the accused had issued cheque only as security. The learned counsel for the accused contended that it is settled position that when the cheque is issued only as security and not to discharge any loan or any legally enforceable liability, the case under section 138 of Negotiable Instrument, Act is not made out. It is also contended that the verification statement is not mere formality and it is important to find out whether prima facie case is made out. He also contended that the verification statement must give all the facts in detail on the basis of which complaint is filed. According to him, several details are not given in the verification statement of the complainant and therefore, it must be held that the compliant has not been properly verified and therefore, the complaints are liable to be quashed . 7. In support of the contention in respect of verification statement, learned counsel, for the applicant-accused relied on certain authorities. In Sabitha Rammurthy & anr -vs- R B S appln4510&orsof09.sxw 7 Channabasavaradhya (AIR 2006 SC 3086), the Hon’ble Supreme Court observed in para 7 thus:- “In a case where the Court is required to issue summons which would put the accused to some sort of harassment, the Court should insist strict compliances of the statutory requirements. In terms of Section 200 of the Code of Criminal Procedure, the complainant is bound to make statements on oath as to how the offence has been committed and how the accused persons are responsible therefor.” 8. In Captain Lance Irwin Lobo -vs- Ismail D’souza @ Angelo Ismail De Souza & anr 2007 ALL MR (CRI) 623, the learned Single Judge of this Court, Panaji Bench considered the provisions of section 200, 202 and 204 and observed as follows in para 16:- “A conjoint reading of sections 203/204, Cr. P.C shows that process is to be issued after considering the statement on oath of the complainant and of the witnesses and the result of the inquiry or investigation, if any, under Section 202. The reading of the statement on oath of the complainant u/s 200 Cr. P. C, is not an empty formality. Commonly it is nicknamed appln4510&orsof09.sxw 8 as verification. To verify means to establish the truth. In other words, verification is done in order to ascertain as to what is pleaded by the complainant is true or not. It is with a view to separate chaff from the grain as many a times complaints do contain unfounded allegations and it is the duty of the Court to ensure that what is stated in the complaint is also stated by the complainant on oath and it is only then that based on such statement the process can be issued. The corollary of this would be that unless offences are disclosed from the statement on oath, no process can be issued only based on averments in the complaint. The complainant is bound to make a statement on oath as to how the offence was committed and how the accused persons are responsible therefor. After the statement on oath is recorded, a Magistrate is required to apply his judicial mind to the facts of the case and the law applicable thereto and find out what offence/s is made out, notwithstanding that the other party at that stage is unrepresented. As observed by the Apex Court time and again, summoning of an accused in a criminal case is a serious matter and criminal law cannot be set into motion as a matter of course. A Magistrate is required to examine the nature of the appln4510&orsof09.sxw 9 allegations made in the complaint and the evidence both oral and documentary to see if it is sufficient for the complainant to succeed in bringing charge home to the accused. In other words, the examination of the complainant on oath is for the purpose of ascertaining whether a prima facie case is made out against the accused to issue process so that the issue of process is prevented on a complaint which is either false or vexatious or intended only to harass. As observed by the Apex Court in Punjab national bank and others -vs- Surendra Prasad Sinha (1993 Supp (1) SCC, 499), it is salutary to note that judicial process should not be an instrument of oppression or needless harassment. A Magistrate is required to find out whether the concerned accused should be legally responsible for the offence charged for. Only on satisfying that the law casts liability or creates offence against the juristic person or the persons impleaded then only process would be issued and at that stage the Court has got to be circumspect in exercising discretion and should take all the relevant facts and circumstances into consideration before issuing process lest it would be an instrument, in the hands of the private complaint as vendetta to harass the person needlessly. appln4510&orsof09.sxw 10 Vindication of Majesty of justice and maintenance of law and order in the society are the prima objects of criminal justice but it would not be the means to wreak personal vengeance”. 9. In that case certain contract had taken place about the property in the year l995, wherein a Power of Attorney was executed and that Power of Attorney was revoked in March,2001 by issuing public notice. The revocation of the said Power of Attorney was contested by the accused in that case. The civil suit was also filed in 2001 for specific performance of the contract and for damages by the complainant. Sale deed was executed by the accused as Attorney of the complainant in May,2003. On 25.11.2004, the complainant filed complaint u/s 409, 418 423, 465, 468, 471 and 120-B Indian Penal Code against accused persons. Process was issued by the learned Magistrate for the offences except under section 468. The accused challenged that order in the court of Sessions. The Additional Sessions Judge deleted most of the sections and maintained the order to issue process only for the offence of breach of trust u/s 409 IPC. That order was challenged by the accused before High Court, mainly on the ground that there was no proper verification of the facts stated in the complaint to make out a case under section 409 or any other section. Taking appln4510&orsof09.sxw 11 into consideration all these complicated allegations and facts, this Court held that the complainant had not stated all these facts in his verification statement to make out a criminal case even for issuance of process under section 409 and therefore the complaint was dismissed. 10. Coming to the facts of the present case, in the complaint, it is specifically mentioned that on the request of the accused, the loan was advanced, she issued cheques on particular date, the cheques were presented for encashment on particular date, cheques were dishonoured and then notices were issued. The notices were received by the accused and she had also filed reply to the said notice through advocate and thereafter complaint u/s 138 was filed. In the verification statement the complainant stated that on the say of the accused, amount of loan was paid to her father Jayantilal Jain and towards security of that loan, accused had issued cheques. She had assured to pay that amount, but she did not make payment. The cheques were also dishonoured with endorsement “funds insufficient”. The cheques were presented again, still they were bounced. After that complainant issued demand notice to the accused through advocate. The demand notice was dispatched and was served and it was replied. Thus, every fact to make out a case u/s 138 Negotiable Instrument Act, appln4510&orsof09.sxw 12 was stated in the complaint. She stated in the verification statement that she did not remember the dates on which the demand notice was despatched and when it was actually served on the accused. It is material to note that all the documents including cheque, intimation from the bank with endorsement that the cheques could not be honoured for want of sufficient funds, the office copy of the notice sent to the accused, postal receipts about sending notice by Regd Post AD, and under certificate of posting, postal acknowledgment about receipt of the notice by the accused, even reply sent by the accused through her advocate were produced alongwith complaint. In view of this, merely because the complainant did not remember the dates which were stated in the complaint and which were supported by documents produced with the complaint, it could not be said that the complaints were not duly verified in respect of the relevant documents to make out a case u/s 138 of the Act. 11. It is further contended that section 202 of criminal Procedure Code mandates that any Magistrate on receipt of complaint of an offence of which he is authorized to take cognizance, shall, in case where the accused is residing at a place beyond area in which he exercises jurisdiction postpone the issue of process against accused and shall enquire into the case himself appln4510&orsof09.sxw 13 or direct investigation to be made by a police officer for the purpose of deciding whether or not there is sufficient evidence for proceeding with the complaint. It is contended that the respondent No.2 was residing in Sharjah. In the present case, learned Magistrate, before issuing process, not only recorded the verification statement of the complainant, but also recorded the evidence of the bank Officer in support of the complaint. Thus, it appears that he had made an inquiry under section 202 of the Criminal Procedure Code, before issuing process against the accused. In view of this, I find no substance in the contention of learned counsel for the applicant that the procedure laid down u/s 200 and 202 of Criminal Procedure Code was not followed. 12. The learned counsel for the applicant vehemently contended that offence u/s 138 Negotiable Instrument Act, is made out, subject to compliance of other requirements of that section, only if the cheque has been drawn by the drawer for payment of any amount of money to another person for the discharge of any debt or other liability. It is contended that if the cheque is issued only as a security and not in discharge of any debt or other liability, offence u/s 138 is not made out. In support of this contention, learned counsel, placed reliance upon M.S. Narayana Menon Alias Mani -vs- State of Kerala and anr (2006 6 SCC appln4510&orsof09.sxw 14 39). In that case the Complainant was a member of Cochin Stock Exchange. The accused used to carry on business in the shares in the said Stock Exchange. The complainant and accused were engaged in the said business for some time. According to the complainant, an amount of Rs.3,00,033/- was due from accused to him in relation to the said transactions. The accused had paid an amount of Rs.5000/- in cash and for the balance amount of Rs. 2,95,033/-, accused had issued a cheque. The said cheque was presented to the drawee bank and was dishonoured. Inspite of service of notice the accused had failed to make payment and therefore, complaint u/s 138 of the Negotiable Instrument Act was filed. It was the case of the accused that the complainant himself was in dire need of financial assistance and accused had issued cheque by way of loan to enable the complainant to tide over his difficulties. According to him, the said cheque was to be used by the complainant as a security so that he could come out from the financial difficulties. The Trial Court convicted the accused. In an appeal by the accused, conviction and sentence were set aside. That order was challenged by the complainant in an appeal before the High Court. The High Court, allowed the appeal and restored the judgment of conviction and sentence passed by the Trial Court. The accused appeal before the Supreme Court with special leave. appln4510&orsof09.sxw 15 The Supreme Court referred to the several transactions between the parties and the practice which was followed in the Stock Exchange and observed thus in para 35:- “35. The definite case of second respondent was that the cheque dated 17.8.1992 was issued by the appellant in discharge of his debt. The said liability by way of debt arose in terms of the transactions. For proving the said transactions, the second respondent filed books of accounts. The books of accounts maintained by the second respondent were found to be not reflecting the correct state of affairs. A discrepancy of more than Rs. 14,00,000/- was found. 13. Thus Supreme Court found that the accounts maintained by the complainant, who was second respondent in that appeal, did not reflect the correct state of affairs. There was discrepancy of more than Rs.l4,00,000/-. After referring several authorities, Their Lordships observed in para 52 thus, “52. We, in the facts and circumstances of this case, need not go into the question as to whether even if the prosecution fails to prove that a large portion of the amount claimed to be a part of the debt was not owing appln4510&orsof09.sxw 16 and due to the complainant by the accused and only because he has issued a cheque for a higher amount, he would be convicted if it is held that existence of debit in respect of large part of the said amount has not been proved. The appellant clearly said that nothing is due and the cheque was issued by way of security. The said defence has been accepted as probable. If the defence is acceptable as probable the cheque therefor cannot be held to have been issued in discharge of the debts, for example, if a cheque is issued for security or for any other purpose the same would not come within the purview of section 138 of the Act”. From these observations it appears that if the defence of the accused is acceptable as probable, cheque could not be held to have been issued in discharge of debt and if the cheque is issued for security or for any other purpose, the same would not come within the purview of section 138 of the Act. 14. In the present case,the case of the complainant is simple and straight forward and according to him,the accused approached him for loan and agreed to repay the amount. On her request the amount of loan was handed over to her father and she issued cheques for repayment of the said loan. As she failed to make the appln4510&orsof09.sxw 17 payment, cheques were presented for encashment and were dishonoured. In the verification statement, the complainant stated that towards security Mrs. Neeta Jain had given cheques for the different amounts. Merely because the word “security” has been used, it does not mean that the cheques were not issued in discharge of the debt or liability. If whole of the complaint and whole of the verification statement are read carefully, it becomes clear that the loan was advanced at the request of accused but the amount was handed over to her father on her request and towards the repayment of that loan, cheques were issued. The word “security” used in above referred portion does not mean that it was not issued for discharge of debt and that cheque was issued as security of some other transaction or contract between the parties. 15. Taking into consideration all these facts and circumstances I find that the authority in case M.S. Narayana Menon (supra) does not come to the rescue of the accused. I find no substance in the contentions raised n behalf of the accused. 16. For the aforesaid reasons, the applications stand dismissed. (J. H. BHATIA, J.) appln4510&orsof09.sxw