Crl. M. No. M- 14629 of 2009 1 IN THE HIGH COURT OF PUNJAB & HARYANA, CHANDIGARH Crl. Misc. No. M- 14629 of 2009 Date of decision.10.03.2010 Subhash Goyal s/o late H.C. Goyal, r/o H.No. 45, Model Gram, Sidhu House, Ludhiana. ....... Petitioner Versus M/s Rajit Paints Ltd. Having their registered office at Gill Road, Ludhiana 141003 through Shri Rakesh Mehra, Managing Director/Shri Ajay Nagrath Director/Shri Rohit Nagrath/Shri Avtar Kohli, officers of the Company and also authorized persons. ........ Respondent CORAM: HON'BLE MR. JUSTICE SHAM SUNDER Present:- Mr. Sunil Chadha, Advocate for the petitioner. Mr. Sumeet Mahajan, Sr. Advocate with Mr. Amit Kohar, Advocate for the respondent. -- Sham Sunder, J. This petition under Section 482 of the Code of Criminal Procedure, for quashing the complaint dated 05.11.2001 (Annexure P-1), titled as 'M/s Rajit Paints Ltd. v. M/s RMI Cycles Ltd. and others', under Section 138 of the Crl. M. No. M- 14629 of 2009 2 Negotiable Instruments Act, and Section 420 read with Section 34 IPC, pending in the Court of Judicial Magistrate Ist Class, Ludhiana, and the summoning order dated 12.01.2002 (Annexure P-2) as well as the subsequent proceedings, arising therefrom, has been filed by the petitioner. 2. An amount of Rs.59,02,646.13 was found outstanding, against M/s RMI Cycles Ltd., as on 2.11.2000 and the petitioner, is one of the Directors thereof. Cheque Nos. 90664 to 90668 dated 3.11.2000 drawn on State Bank of Patiala, Industrial Area, Ludhiana, for Rs.5.00 lacs each, besides cheque No. 90669 dated 3.11.2000 for Rs.9.00 lacs, totalling Rs.34.00 lacs, towards part payment of the subsisting liability of Rs.59,02,646.13, were issued by the accused. At the time of issuance of the cheques, aforesaid, the accused represented to the complainant, that they were holding adequate balance, in their bank account, and will continue to hold the same during the validity period thereof. After issuance of the aforementioned cheques, the accused requested the complainant not to present the same, for the time being, till they were informed by them, to do so. The accused, however, failed to clear the amount. The accused, therefore, issued Crl. M. No. M- 14629 of 2009 3 cheque nos.100119 to 100123 for Rs.5.00 lacs each and cheque No.100124 for Rs.9.00 lacs, all dated 1.7.2001, drawn on State Bank Patiala, Industrial Area, Ludhiana, representing that these cheques would certainly be cleared, on presentation before the drawee bank. In the last week of September 2001, the accused informed the complainant, to present all the cheques on 1.10.2001, and assured that the same would be positively cleared. On the basis of said representation, cheque Nos. 100124 dated 1.7.2001 for Rs. 9.00 lacs was presented by the complainant before its banker Punjab National Bank, Jawadi, Ludhiana, alongwith other cheques, for collection of proceeds. The cheque was received back dishonoured, with the memo dated 3.10.2001 'Exceeds Arrangement'. On receipt of the intimation, regarding dishobnour of the cheque, aforesaid, a legal notice was served upon the accused, including the petitioner, but no payment was made. It was further stated that Subhash Goel, petitioner, Hari Chand Goyal, Ashok Goyal, Amrit Goyal,(latter three non- petitioners), being the Directors of M/s RMI Cycles Ltd. had been attending and looking after the affairs of the Company. Ultimately, the complaint was filed. Crl. M. No. M- 14629 of 2009 4 3. After recording the preliminary evidence, the petitioner and his co-petitioners(non-applicants) were summoned, as accused, to face trial. 4. I have heard the Counsel for the petitioner, and have gone through the documents, on record, carefully. 5. The Counsel for the petitioner, submitted that during the course of trial, a Memorandum of Family Arrangement dated 02.10.2000 was brought, on record, according to which, all the shares of M/s RMI Steels Limited were shifted to Ashok Goyal, to the exclusion of all other members of the family. He further submitted that Ashok Goyal was to enjoy usufruct from the running of the unit of M/s RMI Cycles Limited at Rajpura and Ghaziabad. He further submitted that the cheques, which were the subject matter of the complaint, were issued under the signatures of Ashok Goyal, as Director of M/s RMI Cycles Limited. He further submitted that during the pendency of the complaint, on 15.5.2009, the Counsel representing the respondent/complainant made a statement before the trial Court, that he did not want to pursue the complaint against Ashok Goyal, who was arrayed as accused no.3 therein, as he entered into compromise with the Crl. M. No. M- 14629 of 2009 5 respondent/complainant and made a prayer that the proceedings against him be dropped. He further submitted that earlier the complaint was withdrawn, by the complainant against Amrit Goyal, another Director of M/s RMI Cycles Ltd. He further submitted that complaint already stood abated against Hari Chand Goyal, one of the Directors of M/s RMI Cycles Ltd. who died. He further submitted that, in pursuance of the Memorandum of Family Arrangement dated 02.10.2000, the petitioner was left with no interest in M/s RMI Cycles Ltd. and under these circumstances, he could not be made liable. He further submitted that the complaint and the summoning order, as also the subsequent proceedings, being, thus, the abuse of the process of the Court, are liable to be quashed. 6. On the other hand, the Counsel for the respondent, submitted that the mere fact that the complainant entered into a compromise, with other two Directors of M/s RMI Cycles Ltd., as they discharged their liability to the extent of their share, in respect of the outstanding amount, against them, did not mean that the complaint against the present petitioner, who has not discharged his liability, was liable to be quashed. He further Crl. M. No. M- 14629 of 2009 6 submitted that even vide annexure R-1, affidavit, which was submitted by Subhash Goel , as DW-2, in the complaint, he admitted that he was Non-Executive Director of M/s RMI Cycles Ltd. Rajpura after the family settlement was arrived at in the year 2000, amongst all the brothers and father, the other Directors. He further submitted that specific averments, were made, in the complaint that the petitioner alongwith other Directors was looking after his unit M/s RMI Cycles Ltd. He further submitted that, thus, the petitioner remained liable until and unless he discharged his liability. He further submitted that continuation of the complaint, summoning order, and the subsequent proceedings, arising therefrom, could not be said to be sheer abuse of the process of the Court. 7. After giving my thoughtful consideration, to the rival contentions, raised by the Counsel for the parties, in my considered opinion, the petition is liable to be dismissed, for the reasons to be recorded hereinafter. It is trite that jurisdiction, under Section 482 Cr.P.C., which saves the inherent power of the High Court, to make such orders, as may be necessary to prevent abuse of the process of any Court, or otherwise, to secure the ends of justice, has Crl. M. No. M- 14629 of 2009 7 to be exercised sparingly, and with circumspection. In exercising that jurisdiction, the High Court would not embark upon an enquiry, whether the allegations, in the complaint, are likely to be established by the evidence or not. That is the function of the trial Magistrate, when the evidence comes before him. Though, it is neither possible, nor advisable to lay down any inflexible Rules, to regulate such jurisdiction, one thing, however, appears clear that it is that when the High Court is called upon to exercise this jurisdiction, to quash a proceeding, at the stage of the Magistrate, taking cognizance of an offence, it is guided by the allegations, whether those allegations, set out in the complaint, or charge-sheet, do not, in law constitute, or spell out any offence, and that resort to criminal proceedings, would, in the circumstances, amount to an abuse of the process of the Court, or not. Even in State of Haryana and others Vs. Ch. Bhajan Lal and others AIR 1992 Supreme Court 604(1), it was held that in following category of cases, the High Court, in exercise of its powers, under Article 226 or under Section 482 of the Code of Criminal Procedure, may interfere in the proceedings, relating to cognizable offences, to prevent the abuse of the process of Crl. M. No. M- 14629 of 2009 8 any Court, or otherwise, to secure the ends of justice. However, this power should be exercised sparingly, and that too, in the rarest of rare cases: 1) Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence, or make out a case against the accused. 2) Where the allegations in the First Information Report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. 3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. 4) Where the allegations in the FIR do not constitute a cognizable offence, but constitute only a non- Crl. M. No. M- 14629 of 2009 9 cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. 5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can every reach a just conclusion that there is sufficient ground for proceeding against the accused. 6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. 7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused, and with a view to spite him due to private and personal grudge. Where allegations in the complaint did constitute a cognizable offence justifying registration of a case Crl. M. No. M- 14629 of 2009 10 and investigation thereon and did not fall in any of the categories of cases, enumerated above, calling for exercise of extraordinary powers or inherent powers, quashing of FIR was not justified. 8. The inherent powers, with which the Criminal Courts, are clothed are to make such orders, as may be necessary for the ends of justice. Though the power is unrestricted and undefined, it should not be used capriciously or arbitrarily, but should be exercised in appropriate cases, to do real and substantial justice, for which alone the Courts exist. Now adverting to the facts of the instant case, let us see, as to whether, the petitioner deserves the indulgence of the Court or not. At the time of deciding the petition under Section 482 Cr.P.C., the Court is only required to, look into the allegations, contained in the complaint, as to whether, an offence, is constituted therefrom against the accused or not. What was the defence of the accused, is a matter of evidence. The plea of defence of the accused, at the time of deciding the petition under Section 482 Cr.P.C. cannot be taken into consideration. Undisputedly, M/s RMI Cycles Ltd. is a limited Company. The petitioner was also one of the Directors at the relevant time of the said Company. Even after the Memorandum of Family Arrangement, referred to above, he remained to be the non- Crl. M. No. M- 14629 of 2009 11 Executive Director of RMI Cycles Ltd.. If the complainant entered into a compromise with other Directors, as they discharged the liability to the extent of their shares, and withdrew complaint against them, that did not mean that the complaint against the petitioner, could be dismissed. The petitioner, being the Director of M/s RMI Cycles Limited, was equally responsible for making payment of the amount of the cheques, to the extent of his share, which were issued by the Company. Dropping of proceedings, against other Directors, on the basis of the statement, made by the Counsel for the complainant, cannot lead to the quashing of the complaint against the petitioner. Even otherwise, the disputed facts cannot be adjudicated upon, in the proceedings, under Section 482 of the Code of Criminal Procedure, which are summary in nature. The disputed facts can only be adjudicated upon by the trial Court, during the course of the trial. The allegations, contained in the complaint, constitute an offence, punishable under Section 138 Negotiable Instruments Act, against the petitioner. Under these circumstances, the continuation of complaint, the summoning order, and the subsequent proceedings, arising therefrom, would not amount to sheer abuse of the process of the Court . The same are not liable to be quashed. Crl. M. No. M- 14629 of 2009 12 9. For the reasons, recorded above, the petition, being devoid of merit, must fail, and the same is dismissed. 10. The Registry is directed to comply with the order immediately for compliance. (SHAM SUNDER) JUDGE March 10, 2010 dinesh