Mukesh Vij vs Ajay Sharma

The present petition has been filed by the petitioner for quashing complaint under section 138 of the Negotiable Instrument Act (herein after referred to be as the Act), titled, Ajay Sharma vs. Mukesh Vij pending before the Court of Judicial Magistrate, Pulwama (hereinafter referred to be as the trial court) and also for quashing issuance of the process by the trial court.

The petitioner has sought quashing of the aforesaid complaint on the following grounds:

(a) That no legal notice or summon from the court was ever received by petitioner on the correct address and the respondent has given wrong address to harass the petitioner. No notice has been served upon the petitioner, which is mandatory requirement under section 138 of the Act.

(b) That the registered office of the respondent is situated at Delhi and all the transactions, whatsoever, are made at Delhi and the office of the petitioner is also situated at Delhi, as such, the court lacks the territorial jurisdiction.

(c) That the cheque in question was issued by the petitioner as a security cheque in advance against the goods to be supplied by the respondent and the respondent did not supply the goods and misused the cheque in question without there being any existing legal liability on the part of the petitioner.

(d) That the bare perusal of the complaint reveals that there is no liability of any nature and there is no allegation or evidence against the petitioner so as to implicate him in the said complaint.

Before appreciating the contentions of the petitioner, it is appropriate to have brief resume of the complaint filed by the respondent. It is alleged that respondent had supplied Refrigerant gases to the petitioner under a valid contract and the petitioner had agreed to provide Form ""C"" for the sale invoices made by the respondent to the petitioner’s firms, namely, Best Overseas and Metro Refrigerants. The respondent has stated to have enclosed the bills along with the complaint. It is further stated that petitioner failed to discharge his obligation to provide Form ""C"" for the value of the sales made by the respondent to the petitioner, therefore the petitioner was liable to pay 13.5% of the sales value and interest and penalties for the delay in providing said Form ""C"". The amount so recovered from the petitioner was then to be deposited in the Government Treasury. Besides that, the petitioner had to return 300 empty cylinders of 62 kilograms capacity each and 100 empty cylinders of 10 kilograms capacity each, those were supplied to petitioner on returnable basis along with said gases. In order to compensate the petitioner for not arranging the form C as per the value of sales invoices raised, penalties and interests thereof and to pay the costs for the said 300 empty cylinders of 62 kilogram capacity each and 100 empty cylinders of 10 kilogram capacity each to the respondent, the petitioner approached the respondent at Lassipora Putwama and issued cheque in favour of the respondent at Lassipora, Pulwama dated 12.11.2012 for Rs. 32,72,000/- in discharge of his legally enforceable liability. The respondent presented the said cheque for encashment in his Bank, J&K Bank Limited, Lassipora Pulwama branch, but the same was dishonored by the Bank due to “Insufficient Funds” on 24.12.2012. Thereafter, the respondent issued a legal notice through his counsel upon the petitioner on 23.01.2013 and when within the stipulated period of notice, the petitioner did not make the payment of dishonored cheque, the respondent filed a complaint against the petitioner for commission of offence under section 138 of the Negotiable Instrument Act. After recording of the statement of the complainant, learned trial court vide order dated 21.02.2013 issued a process against the petitioner.

Learned counsel for the petitioner has laid much stress that there was no legal liability for which the petitioner had issued the cheque to the respondent and in fact the cheque was issued as security for the goods to be supplied by the respondent. The Learned Counsel has not pressed the issue of territorial jurisdiction in view of the amendment made in the Act. The written submissions have also been made by the petitioner, in which it is stated that the petitioner paid an amount of Rs. 23,80,800/ to the respondent as an advance amount but the respondent failed to supply gases to the petitioner. It is also submitted that the Best Overseas does not belong to the petitioner and the respondent has himself filled the date as well as amount in the cheque and has filed the false and frivolous complaint against the petitioner despite the fact that the petitioner has no existing liability towards the respondent. Learned counsel for the petitioner has relied upon the judgment of Apex Court in case, titled, ""M/S Indus Airways Pvt. Ltd. vs. Magnum Aviataion Pvt. Ltd., 2014(12) SCC 539.

On the contrary, learned counsel for the respondent submitted that the petitioner has raised disputed questions of facts, those cannot be adjudicated by this Court in a petition under section 561-A Cr.P.C. (now section 482 Cr.P.C).

Heard learned counsel for the parties, perused the written submissions and considered the matter.

The first contention raised by the petitioner that no legal notice and summon was sent to the petitioner on his correct address is not tenable in the eyes of law. A perusal of the complaint reveals that the respondent had issued a notice to the petitioner with address as C/o Metro Refrigerants/Best Overseas F/FA/118, District Centre, Authority Building Janakpuri, New Delhi, whereas the petitioner has shown different address in the present petition. On this ground only, the complaint under section 138 of the Act cannot be quashed. So far as contention pertaining to non-issuance of notice under section 138 of the Act is concerned, there is positive averment in the complaint that the notice was issued on 23.01.2013 and the postal receipt is also stated to have been annexed with the complaint (para-12 and 14 of the complaint). So there is no force in the contention of the petitioner and the same is rejected.

The other contention raised by the petitioner is that there was no legal debt or liability and, as such, the respondent could not have filed complaint under section 138 of the Act. A perusal of the complaint reveals that the respondent has pleaded that he had supplied Refrigerant gases to the petitioner and the petitioner had to return empty cylinders to the respondent. He has further stated that due non furnishing of Form ""C"" by the petitioner, certain penalties were also to be paid and in order to discharge above mentioned liability, the petitioner had issued the said cheque. The contention of the petitioner is that the cheque was issued as security for goods to be supplied, those were never supplied in fact and the same has been misused by the petitioner. Learned counsel for the petitioner laid much stress on the word 'compensate' used in the complaint and also that there was no written contract between the parties and the petitioner had paid sum of Rs. 23,80,800/ as an advance for the goods to be supplied by the respondent but the same were never supplied. This court is of the opinion that mere use of the word 'compensate' would not mean that the respondent had not pleaded any liability to be discharged by the petitioner. The complaint is required to be read as a whole and the word 'compensate' has been used to include the costs of the empty returnable cylinders and the interest as well as the penalties payable due to non furnishing of ""C"" Form. In view of the pleadings made by the complainant mentioned above, the issues raised by the petitioner that there was no liability, the cheque was issued as security but was misused by the respondent by filling the date and amount in the cheque are disputed questions of facts and cannot be adjudicated in a petition under section 561-A (now 482) Cr.P.C. Whether the goods were supplied or not and also whether the cheque was issued as security or in lieu of the liability pleaded in the complaint, are the issues those are to be adjudicated during the trial of the complaint and the complaint cannot be quashed at the threshold without any trial just on the basis of defence raised by the accused/petitioner in a petition under section 561-A (Now 482) Cr.P.C. Reliance is placed upon the decision of the Hon’ble Apex Court in case, titled, Rajeshbhai Muljibhai Patel vs. State of Gujarat, (2020) 3 SCC 794, the relevant para is reproduced as under:

The High Court, in our view, erred in quashing the criminal case in CC No. 367 of 2016 filed by Appellant 3 Hasmukhbhai under Section 138 of the NI Act. As pointed out earlier, Yogeshbhai has admitted the issuance of cheques. When once the issuance of cheque is admitted/established, the presumption would arise under Section 139 of the NI Act in favour of the holder of cheque that is the complainant Appellant 3. The nature of presumptions under Section 139 of the NI Act and Section 118(a) of the Evidence Act are rebuttable. Yogeshbhai has of course, raised the defence that there is no legally enforceable debt and he issued the cheques to help Appellant 3 Hasmukhbhai for purchase of lands. The burden lies upon the accused to rebut the presumption by adducing evidence. The High Court did not keep in view that until the accused discharges his burden, the presumption under Section 139 of the NI Act will continue to remain. It is for Yogeshbhai to adduce evidence to rebut the statutory presumption.

When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the NI Act ought not to have been quashed by the High Court by taking recourse to Section 482 CrPC. Though, the Court has the power to quash the criminal complaint filed under Section 138 of the NI Act on the legal issues like limitation, etc. criminal complaint filed under Section 138 of the NI Act against Yogeshbhai ought not to have been quashed merely on the ground that there are inter se disputes between Appellant 3 and Respondent 2.

Without keeping in view the statutory presumption raised under Section 139 of the NI Act, the High Court, in our view, committed a serious error in quashing the criminal complaint in CC No. 367 of 2016 filed under Section 138 of the NI Act.

(Emphasis supplied)

The judgment of Hon'ble Apex Court in case, titled "M/S Indus Airways Pvt. Ltd. vs. Magnum Aviataion Pvt. Ltd.",2014(12) SCC 539 relied upon by the learned counsel for the petitioner is not applicable in the facts and circumstances of the case in hand as in the said case, admittedly post dated cheques were issued as advance payment and subsequently notice was issued for cancelling the purchase order and return of the post dated cheques.

After the issuance of notice by the purchaser to the complainant/supplier, the complainant/supplier in the said case issued a notice under the Act and filed the complaint. So far as the instant case is concerned, the facts are entirely different, as such, said decision of Apex Court is not applicable in the present facts and circumstances of the case.

In view of what has been stated herein above, this petition is found to be devoid of merit and the same is, as such, dismissed. Interim directions shall stand vacated.

Record, if summoned, be sent back to the Trial court along with a copy of this judgment. Parties shall cause their appearance before the trial court on 01.03.2021.