1. This order of mine shall dispose of both the petitions as detailed above, as they arise from similar facts and circumstances. However, for the sake of brevity, facts are taken from CRM-M No.63462 of 2023.

2. The petitioner has approached this Court by the filing present petition under Section 482 of the Code of Criminal Procedure seeking quashing of criminal complaint under Section 138 of the Negotiable Instruments Act (hereinafter referred to as the ' NI Act '), bearing No.NACT/455/2019 dated 26.07.2019, and all subsequent proceedings arising therefrom (Annexures P-1 and P-3 in the Court of 1 of 8 ::: Downloaded on - 23-02-2024 01:15:46 ::: Neutral Citation No:=2024:PHHC:023759 CRM-M No.63462 of 2023 (O&M) -2- 2024:PHHC:023759 learned Judicial Magistrate 1st Class, Kapurthala, titled as 'HDFC Bank v. Babalgeet Singh' under Section 138 of the NI Act).

FACTUAL MATRIX

3. The brief facts of the present case are that the respondent-complainant is a bank with its registered office at HDFC House, Senapati Bapat Marg, Lower Parel, West Mumbai - 400013, and one of its branches at Kapurthala. The petitioner was granted C.C. Agriculture Limit of Rs.95,00,000/- under Loan Account No. 50200023232498 by the respondent bank. In consideration of sanctioning of aforesaid loan/limit, the petitioner executed various deeds and documents, as required for obtaining the loan, in favour of the respondent bank.

4. Since the petitioner failed to repay the abovementioned loan amount, the respondent bank filed a case bearing No.OA/3252/2019, titled 'HDFC Bank v. Babalgeet Singh' before the Debts Recovery Tribunal - 3, Chandigarh on 20.12.2019, in which summons were issued to the petitioner vide order dated 07.10.2021.

5. The respondent bank also instituted a complaint under Section 138 of the NI Act alleging that the petitioner had issued a cheque bearing No.000006 dated 12.06.2019 for Rs.82,00,000/-in favour of the respondent bank, in order to discharge his legally enforceable liability. On presentation for encashment, the said cheque was dishonoured vide memo dated 13.06.2019 with remarks "Insufficient Funds". Thereafter, a legal notice dated 05.07.2019 was served upon the petitioner. However, since the petitioner failed to make the requisite payment in the stipulated time period, the instant complaint was filed before the learned Chief Judicial Magistrate, Kapurthala on 26.07.2019. Hence, the present petition has been filed seeking quashing of the criminal complaint on the ground that proceedings for recovery of the disputed amount are already pending before the Debts Recovery 2 of 8 ::: Downloaded on - 23-02-2024 01:15:46 ::: Neutral Citation No:=2024:PHHC:023759 CRM-M No.63462 of 2023 (O&M) -3- 2024:PHHC:023759 Tribunal - 3, Chandigarh.

CONTENTIONS

6. Learned counsel for the petitioner inter alia contended that the respondent/complainant-Bank has already filed an application for recovery of alleged debt before the Debts Recovery Tribunal, Chandigarh (DRT3) in which summons have already been issued to the petitioner and therefore, the complaint filed under Section 138 of the NI Act is not maintainable. In support of this contentions, he relied upon the judgments rendered by the Hon'ble Supreme Court in M/s Gimpex Private Limited Vs. Manoj Goel (2022) 11 SCC 705; P. Mohanraj and others Vs. M/s Shah Brother Ispat Pvt. Ltd. Civil Appeal No.10355 decided on 01.03.2021 and Nahar Industrial Enterprises Ltd. Vs. Hong Kong & Shanghai Banking Corporation 2011 (7) RCR (Civil) 95. It was further contended that the alleged cheque was given by the petitioner at the time of availing the CC Agricultural Limit as security and therefore, at the time of issuance of cheque, there was no legal liability against the petitioner. In this regard, reliance was placed upon the judgment rendered by the High Court of Madras in A.R. Chellappan Vs. A.R.E. Thirugnanam Law Finder Id:900481 and the Delhi High Court in IKF Technologies and others Vs. Sasi Bhushan Raju Law Finder Id:450963.

7. Per contra, learned counsel appearing for the respondent contended that there is no embargo in initiating simultaneous proceedings for recovery of debt under the Securitization and Reconstructions of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act ) and fastening criminal liability of the defaulter for not discharging the legally enforceable debt under Section 138 of the NI Act. In support of his contention, he relied upon the judgments passed by the Hon'ble Supreme Court in Gurcharan 3 of 8 ::: Downloaded on - 23-02-2024 01:15:46 ::: Neutral Citation No:=2024:PHHC:023759 CRM-M No.63462 of 2023 (O&M) -4- 2024:PHHC:023759 Singh and another Vs. M/s Allied Motors Ltd. and another Crl. Appeal No.1523 of 2004 decided on 17.12.2004 and Guru Granth Saheb Sthan Meerghat Vanaras Vs. Ved Prakash and others Civil Appeal No.4166 of 2013 decided on 01.05.2013 to contend that criminal proceedings under Section 138 of the NI Act and the civil suit/arbitration proceedings over the same cause can run simultaneously and there is no requirement that proceedings either civil or criminal must be stayed. Further reliance also placed upon the judgment passed by the Bombay High Court in Mr. Mahesh Pralhad Salunke Vs. Bharati Sahakari Bank Ltd. Criminal Writ Petition Nos.2131, 2450 of 2019 decided on 16.08.2019 wherein prayer of the petitioner for quashing of proceedings initiated under Section 138 of the NI Act on the ground of pendency of simultaneous proceedings under the SARFAESI Act was rejected. OBSERVATION AND ANALYSIS

8. Having heard learned counsel for the parties and after perusing the record of the case with their able assistance as well as the case laws cited, it transpires that there is no merit in the arguments raised by the counsel for the petitioner.

9. Loan granted by the financial institutions does not become the property of the person taking the loan but it is given in a fiduciary capacity out of the public money generated at the expense of tax payers. In order to facilitate the swift and efficient recovery of bad loans by the banks and financial institutions, the SARFAESI Act was enacted in the year 2002. On the other hand, the Negotiable Instruments Act, 1881 is a codified law relating to promissory notes, bills of exchange and cheques and ascribes criminal liability for dishonour of a cheque. The legislature enacted both the laws with different objects and reasons. Both laws are excluded from the trappings of Code of Civil Procedure and Code of Criminal Procedure and are governed by the concept of summary trial based on the principle 4 of 8 ::: Downloaded on - 23-02-2024 01:15:46 ::: Neutral Citation No:=2024:PHHC:023759 CRM-M No.63462 of 2023 (O&M) -5- 2024:PHHC:023759 of natural justice. The proceedings under Section 138 of the NI Act are quasi- criminal in nature and therefore, there is no embargo in initiating proceedings under the SARFAESI Act and Section 138 of the NI Act simultaneously. The judgment relied upon by the counsel for the petitioner in the case of M/s Gimpex Private Ltd. (supra) was a case where in a complaint filed under Section 138 of the NI Act for dishonour of cheque, a settlement agreement was entered into by parties, however, the cheque issued in pursuance of the settlement agreement was also dishonoured. It was in this backdrop, the Hon'ble Supreme Court held that once a settlement agreement has been entered into by the parties, the proceedings in the original complaint cannot be sustained and a fresh cause of action accrues to the complainant under the terms of the settlement deed. It was further observed that pursuing both the complaints would lead to contradictory results, increase the burden on the criminal justice system and discourage settlement matters. Therefore, the ratio decidendi culled out in the aforesaid judgment is not applicable to the facts and circumstances of the present case.

10. Further, reliance placed upon the judgment in P. Mohanraj's case (supra) does not come to the rescue of the petitioner, as the same is distinguishable from the facts of the present case. In the said case, the question for consideration before the Hon'ble Supreme Court was whether the institution or continuation of a proceeding under Section 138 / 141 of the NI Act can be covered by the moratorium provision namely Section 14 of the Insolvency and Bankruptcy Code (in short IBC), 2016 and the Hon'ble Supreme Court answered that proceedings under Section 138 / 141 of the NI Act against a corporate debtor is covered by Section 14 (1) (a) of the IBC. However, the counsel for the petitioner has failed to bring to the notice of this Court any provision of SARFAESI Act which debars initiation of proceedings under Section 138 of the NI Act. Moreover, the moratorium under 5 of 8 ::: Downloaded on - 23-02-2024 01:15:46 ::: Neutral Citation No:=2024:PHHC:023759 CRM-M No.63462 of 2023 (O&M) -6- 2024:PHHC:023759 Section 14 of the IBC applies only to the Corporate Debtor and in the present case, neither the proceedings are initiated under the IBC nor the debtor is a Corporate Debtor.

11. Another argument raised by the counsel for the petitioner that the cheque was given as security at the time of availing loan facility and not as a legal liability is a disputed question of fact, which is a matter of trial and cannot be determined by this Court under Section 482 Cr.P.C. A two Judge Bench of the Hon'ble Supreme Court in HMT Watches Ltd. Vs. M.A. Abida (2015) 1 SCC 776 has held as under:-

12. On the other hand, this Court finds merit in the argument raised by the counsel for the respondent that there is no embargo in initiating civil and criminal proceedings for the same cause of action. A two Judge Bench of the Hon'ble Supreme Court in Dr. Purshotama Reddy and another Vs. K. Sateesh (2008) 8 SCC 505 speaking through Justice S.B. Sinha has held as under:-

CONCLUSION:

13. In view of the above, this Court does not find any merit in both the petitions and they are dismissed accordingly.