Bombay Rayon Fashions Limited vs The State of Maharashtra

A.M. Thipsay, J.—Heard Mr. Shirish Gupte, the learned Senior Advocate for the applicants. Heard Mr.Joseph, Advocate for Respondent No. 2. Heard Mr.Thakre, learned A.P.P. for the respondent No. 1 State of Maharashtra.

By consent, admitted and taken up for final hearing forthwith.

The applicant No. 1 a company and the applicant nos.2 to 12 its directors are the accused in case No. 108/SS/2013, pending before the Metropolitan Magistrate 14th Court at Girgaum. The case is in respect of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ''the N.I.Act'', for short), and arises on a complaint filed by the respondent No. 2 herein.

By the present application under Section 482 of the Code of Criminal Procedure (hereinafter referred to as ''the code'', for short), the applicants pray that the proceedings of the said case pending against them be quashed.

For the sake of convenience and clarity, the applicants shall hereinafter be referred to as ''the accused'' and the respondent No. 2 as ''the complainant''.

The complainant and the accused had some previous business transactions between them, and some amount was payable by the accused to the complainant. The accused issued cheque bearing No. 691810 dated 31st October, 2012, in the sum of Rs. 3,38,61,927/- to the complainant in discharge of their liability. This cheque was presented for payment on 31st October, 2012 by the complainant, but it was dishonoured for want of sufficient funds in the drawer''s account. On receipt of the intimation of dishonour, the complainant issued a demand notice calling upon the accused to make the payment of the amount of the said cheque. This demand notice was received by the accused on 22nd November, 2012. In reply to the said notice, the accused, by their letter dated 26th November, 2013, forwarded three cheques bearing nos. 513423, 513424 and 513426, to the complainant. On the next day i.e. on 27th November, 2012, the complainant presented one of these cheques i.e. 513423, which was in the sum of Rs. 1 crore and received payment in respect thereof. The complainant then informed the accused that even the remaining two cheque would be deposited, but it appears that the accused requested the complainant not to deposit the remaining two cheques. It appears that ultimately on 27th December, 2012, the complainant deposited the other two cheques, but they were dishonoured with an endorsement ''payment stopped by drawer''.

The complainant filed a complaint in respect of the dishonour of the cheque No. 691810 which was for an amount of Rs. 3,38,61,927/-, on 2nd January, 2013, before the Metropolitan Magistrate 14th Court, Girgaum. The learned Magistrate issued process against the accused on the same day, requiring them to answer to the charge of an offence publishable under Section 138 of the N.I. Act. The accused were served with the summons in the said case i.e. case No. 14/SS/2013, on 12th January, 2013. On 18th January, 2013, the complainant addressed the statutory demand notice in respect of the other two cheques i.e. cheque nos. 513424 and 513426, which were dishonored. This notice of demand was received by the accused on 22nd January, 2013, but, it appears that it was not replied. On 22nd February, 2013, the complainant filed the present case i.e. the complaint case No. 108/SS/2013, against the applicant and the learned Magistrate, on the same day, was pleased to issue process against the accused in respect of the cheques mentioned in the said complaint.

On 18th March, 2013, the applicants and the respondent settled the complaint case No. 14/SS/2013. The accused had paid the entire amount of the cheque in question i.e. an amount of Rs. 3,38,61,927/-, and on an application made by the complainant, the Magistrate permitted the complaint to be withdrawn as contemplated under Section 257 of the Code of Criminal Procedure.

Thereafter, the accused were served with the summons in case No. 108/SS/2013, (which had already been filed by the complainant against the accused in respect of the cheque nos. 513424 and 513426). Interestingly, there has been no reference to the filing of a complaint in respect of the said two cheques, or the filing of a complaint when the compromise and withdrawal in case No. 14/SS/2013, was recorded.

The accused have now approached this Court by filing the present application invoking the inherent powers of this Court and praying that the proceedings pending against them vide Case No. 108/SS/2013, be quashed.

Mr.Gupte, the learned senior counsel for the accused contended that the proceedings pending before the learned Magistrate vide the said case are liable to be quashed. He submitted that the proceedings arose out of the same liability in discharge of which the cheque No. 691810 was earlier issued and in respect of the dishonour of which the complaint case No. 14/SS/2013, had been filed. He submitted that having received the payment in respect of the said cheque, and thereafter, having withdrawn the said complaint, the complainant was not entitled to prosecute the accused by way of the second complaint, though there was no different or fresh liability in respect of the second complaint.

The learned counsel for the complainant attempted to suggest that the two cases were in respect of different considerations. According to him the cheque No. 691810, was issued for a particular consideration and other two cheques which are the subject matter of complaint case No. 108/SS/2013, were issued for a different consideration i.e. towards the other outstandings.

I have examined this aspect of the matter. It is not possible to agree with the learned counsel for the complainant.

It is clear that it is only after a notice demanding the amount of cheque No. 691810 was issued by the complainant to the accused, that three cheques bearing Nos. 513423, 513424 and 513426, were sent by the accused to the complainant. It is clear that these cheques were in lieu of the cheque bearing number 691810 which was in respect of an amount of Rs. 3,38,61,927/-. It is contrary to common sense to hold that while replying to the demand notice, and while enclosing three cheques along with the reply, the accused persons had in mind to discharge their some other alleged liability towards the complainant (for which no demand had been made).

The falsity of this stand is self evident, but even otherwise, the amount of these two cheques totals up to Rs. 2,37,37,811/-. Inspite of drawing my attention to the statement of account, the learned counsel for the complainant could only point out that there was an additional liability on the part of the accused to pay an amount of Rs. 70 lac and odd to the complainant. Thus, this exposes the falsity of the contention further, inasmuch as if the cheques which are the subject matter of the C.C. No. 108/SS/2013, were given in discharge of the remaining liability which is said to be of Rs. 70 lac and odd then why the cheques should be, totally for an amount of Rs. 2,37,37,811/-, is not at all clear.

The learned counsel for the complainant then submitted that there was nothing wrong in the order issuing process as the complaints were in respect of different cheques. He submitted that it was a fact that the amount of the cheques which are the subject matter of the complaint case No. 108/SS/2013, was not paid even after demand. He, therefore, suggested that there was no need to interfere in the matter and that the prosecution initiated by the complainant be permitted to be continued. I find no substance in this contention. It is clear that the liability in discharge of which cheque No. 691810 (which was the subject matter of CC. No. 14/SS/2013), was issued and the liability in respect of which the cheques which are the subject matter of C.C.No. 108/SS/2013, were issued, is one and the same. In fact, it is clear that after the amount of the cheque No. 691810 was demanded, while replying to the demand notice the accused enclosed three cheques, two of which are the subject matter of the complaint case No. 108/SS/2013. It may be noted that one of the three cheques was honored.

It is significant that the summons in the second case, i.e. C.C. No. 108/SS/2013, was served upon the accused only after they paid the entire amount in respect of the cheque which was the subject matter of C.C. No. 14/SS/2013. The complainant, at that time, did not disclose to the accused persons that any other prosecution in respect of the cheques subsequently issued by them, was already pending. It was not proper on the part of the complainant to have given an impression to the accused persons that the matter was being settled by his withdrawal of the complaint case No. 14/SS/2013, but, after having received the amount, to prosecute the accused persons in case No. 108/SS/2013.

Though the cheques in both the cases were different, they were issued in discharge of the same liability. When two different prosecutions were instituted on the basis of different cheques issued in discharge of the same liability, and when one of them was withdrawn on the basis that the liability had been discharged, the other prosecution cannot be permitted to be continued. The settlement arrived at in complaint case No. 14/SS/2013 and the withdrawal of the said complaint on that basis must be treated and deemed as implicit withdrawal of the CC No. 108/SS/2013 also.

Under the circumstances, continuation of the proceedings against the accused persons would amount to an abuse of the process of the Court. Such continuation is bound to result in miscarriage of justice. The inherent powers of the Court are, therefore, required to be exercised to quash such a prosecution.

The application is allowed.

The prosecution of the applicants vide C.C.No. 108/SS/2013, is quashed.