Case: K.K.Singhal  Vs. Steel Strips Ltd

3. The basis of the filing of the application relates to issuance of 33 cheques by the appellants during the course of its business aggregating to Rs.2,40,64,022.19 paise in consideration of the payment against steel billets and rolled products supplied to them by the complainant/respondent. On presentation, all the cheques were dishonoured on different dates culminating in lodging of 26 complaints against the appellants for the commission of offence punishable under Section 138 of the Negotiable Instruments Act. Upon notice, the appellants filed an application under Section 482 of the Code of Criminal Procedure before the High Court for quashing the said complaints.4. The appellants on 22.7.1998 requested the complainant that he had material worth Rs. 1 crore for disposal in the shape of forging of steel flanges which he would dispose of and would make the payment of the amount to the complainant and requested the complainant to find out a customer. At the request of the complainant, M/s. Uma Shanker Khandelwal and Company Limited, New Delhi agreed to purchase the material from the appellants. The appellants agreed to pay the entire consideration to the respondent and in turn directed the said company to pay the consideration directly to the complainant against all the deliveries. The appellants further promised to clear the balance outstanding by arranging funds from its source. Relying upon such allurement and inducement of the appellants, the respondent agreed to withdraw all the complaints except one. It appears as per promise, the appellants supplied flanges to said M/s. Uma Shanker Khandelwal and Company for an amount of Rs.31,22,524/- only and directed that the amount be paid directly to the respondent.5. The appellants thereafter induced the respondent to withdraw the 25 complaints filed under Section 138 of the Negotiable Instruments Act, on the plea that the appellants would pay the entire consideration to the respondent. The appellants also withdrew the said application filed under Section 482 of the Cr.P.C. from the High Court. However, after withdrawal of all the complaints by the respondent, the appellants neither took any step to pay the amount nor kept his commitment.6. In these circumstances, after recording the preliminary evidence, the trial court by an order dated 12.6.2001 issued summons against the appellants as accused for commission of offence under Section 420 of the Indian Penal Code. The appellants filed an application for quashing of the said summons under Section 482 of the Cr.P.C.

Court's reasoning:
It appears that on the question of territorial jurisdiction, the submissions made on behalf of the respondent/complainant have substance. In our opinion, the agreement was entered into at Chandigarh to withdraw the criminal proceedings, the complainant having its head office at Chandigarh and further nowhere the appellants have made out a case that all the cheques were payable at Faridabad. Therefore, we do not have any hesitation to hold that the question of jurisdiction is of no consequence, which would be decided by the trial court. The second point, which was urged by Dr. Dhawan that the dispute is of civil nature, cannot be allowed to stand at this stage after taking into account the conduct of the appellants.10. We do not find any reason to accept the contention of Dr. Dhawan on the ground that the intention of the appellants is absolutely clear from their actions, which they followed to allure the complainant to withdraw the 25 complaints filed by them under Section 138 of the Negotiable Instruments Act. We do not wish to express our views further, but we are not in a position to accept such contention of Dr. Dhawan and further the question of non-performance of the contract tentamounts to breach of contract as sought to be stated by Dr. Dhawan, also cannot be accepted in the teeth of the facts placed before us at this stage.