Case: Mahindra &amp; Mahindra F.S.Ltd Vs. Rajiv Dubey

The complainant as the Managing Director of Team Finance Company Pvt. Ltd., Janpath Tower, Bhubaneswar had availed hire purchased finance from Mahindra & Mahindra Financial Services Limited, accused appellant No.1 with the consent and knowledge of its Managing Director, accused appellant No.2 in respect of a vehicle for a sum of Rs.1,89,000,00. He had given seven blank cheques drawn on Canara Bank, Main Branch Bhubaneswar in favour of accused-appellant No.1 in the year. 1994 when the agreement had been executed between the parties with mutual understanding that the said cheques would not be presented for encashment by the accused-appellant, but then payments would be made through demand drafts regularly till the entire amount was repaid. According to the complainant, in consonance with the said understanding the entire dues were repaid by him through demand drafts and after repayment he wrote a letter to accused-appellant No.l for returning the blank cheques to him. However, without doing so, the accused appellants mischievously and with ulterior motive presented the cheques in the bank, a fact he learnt after receiving communication from the concerned Bank, that as sufficient money was not available in his account. The cheques were presented in bank by the accused-appellants even though their entire amount had been repaid by the complainant. This was done with a motive to cheat and harass the complainant and makes out offences under Sections 406 and 420 IPC. The court below after recording the initial statement of the complainant under Section 200 of the Code of Criminal Procedure, 1973 (in short the ‘Code) perusing the materials produced before him and being prima facie satisfied about commission of the aforesaid offences took cognizanceof the appellants before the High Court was that the complaint was nothing but abuse of the process of the law. It was as a counter blast to the proceedings initiated under Section 138 of the Negotiable Instruments Act, 1881 (in short the ‘Act). The High Court found that it is not a case for interference under Section 482 of the Code.

Court's reasoning:
It is interesting to note that the respondent does not dispute issuance of cheques. Even a casual reading of the complaint does not show that the ingredients of Section 406 IPC are in any event made out. It is also not understandable as to how Section 294 has any application to the facts of the case much less Section 506 IPC. In addition to this, perusal of the complaint apparently shows the ulterior motive. It is clear that the proceeding initiated by the respondent clearly amounted to abuse of the process of law. In State of Haryana v. Bhajan Lal (AIR 1992 SC 604 ), it was, inter-alia, observed asIn the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.(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-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 ever 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 personalcase at hand falls under category (7).