New Rkbk Motors & Anr vs State Of West Bengal & Anr

Chaitali Chatterjee Das, J

This revisional application is filed for quashing the proceeding pending before the learned Court of Judicial Magistrate at Bidhannagar and all orders passed therein.

This is a case where the petitioner no.1 is the proprietorship concern and petitioner no.2, the sole proprietor petitioner no. 1 and Opposite Party no. 2 engaged in the business of manufacturing of E – rickshaws and the Opposite Party no. 3 is a Finance company working for primarily financing E- rickshaw manufactured by the Opposite Party no. 2.

Brief fact of the case

The petitioner no. 1 was contacted by the Opposite Party no. 2 in the year 2021 for the purpose of its dealership and in this regard, a tripartite agreement was executed on December 6, 2021 between Opposite Party no. 2, the petitioner no. 1 and Rashmi export Private Ltd. In terms of the said agreement, the Opposite Party no. 2 was to supply E – rickshaw/spare part to the petitioners and it was agreed between the parties that in case there is any revision in rate of said spare part/E-rickshaw, prior intimation of the same had to be provided to the petitioners. Despite agreement, the Opposite Party no. 2 had supplied 15 E rickshaw to the petitioner as at enhanced rate of ₹17, 51, 085/- On July 1, 2022.

The Opposite Party no. 2 supplied 15 damaged  E-rickshaws to the petitioner, and after that the Opposite Party no. 3 issued notice under Section 138 of Negotiable Instrument Act 1881 by it’s a letter dated 11 January, 2023 and clarified the entire scenario stating that the petitioners had till date issued no cheque in favour of the Opposite Party no. 3, and only cheques which had been issued to the Opposite Party no.2 , were for the purpose of Security deposit at the time of execution of the Tripartite agreement and the Opposite Party no. 2 with mala fide intention had issued another notice on November 2, 2023, under Section 138 of Negotiable Instrument Act, 1881. The complaint case no. 4077/2023, was filed under Section 138 and 142 of the N.I Act, 1881 filed by the Opposite Parties, no. 2 and 3 is merely based on the purported factual statements made by the Opposite Party no. 2 & 3 and are not maintainable in law. That apart the petitioner informed by giving a legal notice dated 7.10.2023 to the complainant company/Opposite party No. 2 about the instruction given to the Bank for stop payment since he has received the damaged E- Rickshaws despite that the complaint has been lodged. Hence filed this revisional application for quashing of the proceeding of such complaint case pending before the Learned Judicial Magistrate at Bidhannagar, North 24 Parganas.

Submissions

The learned Advocate representing the petitioner at the outset has taken a preliminary point of maintainability of the complaint on the ground that it has been filed by both TERRA Motors, India Pvt Ltd and TERRA Financial Services Private Limited and this joint complaint is not maintainable in the eye of law. The learned advocate as relied upon a decision reported in Manzoor Ahmed Sofi versus Jameel Ahmed Bhat 2022 SC online J & K & Ladakh 985 in this regard. It is further argued that an agreement contains the Arbitration clause and therefore any dispute arising out of the agreement ought to have been referred before the arbitrator.

The Learned Advocate has further relied upon a decision of Gajanand Burange versus Lakshmi Chand Goel 2022 SCC online 1711, on the issue that the proviso to clause (c) of 138 of NI Act makes it clear that no complaint can be filed for an offence under section 138 of the N.I Act unless the period of 15 days has elapsed. Any complaint filed before the expiry of the period of 15 days from the date on which the notice has been served on the drawers /accused is no complaint at all in the eye of the law. The stand taken by the learned advocate that since joint complaint was filed in respect of two cheques issued in favour of two different companies and two demand notices were sent and one of such notice was received on November 7, 2023, and the complaint was lodged on 22 November 2023, which is beyond the completion of 15 days and hence not maintainable.

The learned Advocate representing the Opposite Party on the other hand submits that in the decision relied upon by the learned Advocate of the petitioner itself manifest that the Learned Court observed that merely because the respondents have filed a joint complaint against the petitioner in respect of three cheques cannot be proceeded with but the petitioner cannot go scot free. Accordingly, the whole proceeding was not closed and it was allowed to be proceeded in respect of one of the two complainants.

The learned Advocate further submits that the legal notice was alleged to have been sent, which reasonably presumed that a lawful debt existence. The complainants companies are sister concern and litigate. Litigant should not suffer for any advice given by the Advocate. That apart N.I Act is a beneficial legislation to protect the interest of the litigants who have suffered financial losses. The learned Advocate has relied upon a decision reported in, Sri Krishna agencies versus State of Andhra Pradesh and another (2009) 1 SCC 69, where it was held that there can be no bar to the simultaneous continuance of a criminal proceeding and civil proceeding, if the two arises from separate causes of action. Accordingly prayed for dismissal of this Revisional Application.

Analysis

Heard the submissions of both the Learned Advocates. The matter pertains to a complaint lodged under section 138 and 142 of the Negotiable Instruments Act by Terra Motors Pvt Limited and Terra Financial Services Pvt. Ltd. against the present petitioner M/s New RKBK Motors & anr. in respect of Higher Purchase agreement. The complaint was filed by one Bunty Singh on behalf of both the complainant being an authorized agent of both the companies. The amount involves Rs. 31,56,136 /-is outstanding as on September 26, 2023 against the present petitioner being the accused and it was alleged that the petitioner no. 2 approached the complainant and purchased E rickshaw and accordingly complainant supplied E rickshaw to the accused which was duly acknowledged by the accused. The accused no. 2 /petitioner no. 2 sold the vehicles to the customers brought from Terra Motors, India Private Limited and financed the vehicle from Terra Financial services Private Limited and there was a Tripatite agreement between them and the cheques were issued to Terra Motors, India Pvt. Ltd. on 26 September 2023 for an amount of ₹31, 50, 000 and another to Terra Financial services Private Limited dated September 21, 2023 for an amount of ₹1, 50, 000/- and also an undated cheque dated September 26, 23 for an amount of ₹44, 80, 000 with the assurance that the same would be in encashed on presentation. Accordingly, said cheque was deposited by the complainant, but it was dishonoured with the remarks Funds insufficient and payment stopped by the drawer. Two notices dated October 5, 2023, and October 11, 2023, where issued to the present petitioner on October 9, 2023 and October 12,, 2023, which was duly served on October 13 2023 through DTDC courier. Another notice was sent through registered post, but the notice was put on hold and was received by the accused on November 7, 2023. Same notice was sent to the accused on November 1, 2023 through DTDC courier, which was received by the accused on November 5, 2023, but no payment of the said cheque has been made to the complainant within the period stipulated and the complaint was lodged against the present petitioner. It is a fact that joint complaint has been filed and also that two cheques were issued in favour of two different company and on two different dates and therefore the learned advocate has rightly raised the question of the maintainability the complaint itself and is liable to be rejected being not in form.

In the case of Manzoor Ahmed Sofi (supra) a joint complaint was filed before the Magistrate alleging that by way of an agreement, the accused allotted some work in partnership and an amount was outstanding as the cost of work and the petitioner issued three cheques out of which two were for an amount of ₹6 lakhs and Rs. 5 lakhs and one cheque for an amount of ₹6 lakhs was issued in favour of the respondent no. 2, which were presented for engagement and were returned on presentation for the reason of insufficiency of funds. Joint legal notice of demand was issued and ultimately the complaint was filed.

The only ground agitated was regarding maintainability as it was a joint complaint on behalf of two or more persons is not maintainable as the same is not contemplated either under the provisions of the Cr.Pc or in the N.I Act 1881. The High Court considered various judicial pronouncement and found divergent views expressed by different High courts regarding maintainability of a joint complaint and agreed with the view expressed by the co-ordinate bench of the Jammu and Kashmir and Ladakh High Court in the case of Mohammad Safi Mir versus Haji Bashir Ahmed Dar (CRMC NO.118/2018 DECIDED ON 1.4.2021) while dealing with a similar question, held that a joint complaint by two or more persons is not maintainable.

On careful perusal of the aforesaid decision as relied upon, it can be found from paragraph 16 that the Learned Court considered the next question as to what should be the course of action available to the respondents and merely because of filing of joint complaint against the petitioner, he cannot go scot free. The interest of justice would demand that whole of the proceedings should not be quashed and the complaint which is pending before the Trial Magistrate can be proceeded ahead in respect of one of the two complainants, whereas the other complaint can be given liberty to have recourse to other remedies under law. Accordingly directed the trial court to proceed ahead with the complaint to the extent of the cheque issued in favour of the respondent no.1 and the proceeding against respondent no.2 was quashed giving liberty to appropriate remedy under law.

In this case, the complainant no.1 is in the business of manufacturing of rickshaw that is Terra Motor India Private Ltd. and is a subsidiary of Terra Motors Corporation, Japan and complainant no. 2 M/s Terra Financial services Private Limited, formerly known as Rashmi export Private Limited is a finance company and it finances, the E-rickshaws manufactured by Terra Motors India Pvt Ltd. The usual practice to be followed is to lodge two separate complaints when two separate cheques where dishonoured on two different dates. Two different notices were also sent received on two different dates.

It  is  relevant  to  extract  the  provisions  under  Section  138  of  Negotiable Instruments Act, which reads as follows :

“138. Dishonour of cheque for insufficiency, etc. of funds in the account – Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it

exceeds the amount arranged to be paid from that account by an arrangement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twice the amount of the cheque, or with both :

Provided that nothing contained in this section shall apply unless-

(a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.

(b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

(c) the drawer of the such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.

Explanation: For the purposes of this section, 'debt or other liability' means a legally enforceable debt or other liability”.

In the decision of in the case of Aparnaa.Shah Vs. Sheth Developers Private Limited and another 2013 (8) SCC 71, the Hon'ble Supreme Court of India held that under Section  138  of  the  Act,  it  is  only  the  drawer  of  the  cheque  who  can  beprosecuted.

It is the settled law that for each distinct offence of which any person is accused, there should be a separate charge and there is no provision dealing with joinder of charges, authorising two or more complaints to file a single complaint in terms of Section 138 of N.I Act, it is only the person who is signatory to cheque and the said cheque is drawn by that person on account maintained by him and issued for discharge in whole or in part of any debt or other liabilities and said cheque is returned and paid who can be prosecuted under  the  provision  .Therefore,  this  provision  does  not  speak  about  joint liability.

The object behind promulgation of Negotiable Instrument Act, 1881 was to ensure a reliable, safe and convenient mechanism for payment and credit and to protect the rights and interest of the parties involved in transaction. In the instant case, admittedly the cheques were issued even if for the purpose of security deposit it is admitted that those cheques were dishonoured. The complainants had to come before the court against the present petitioner for protecting their interest under the Negotiable Instrument Act 1881 and therefore, since procedural irregularities are found for which the foundation of the complaint is shaken, this court fully agrees with the view observed by the High Court of Jammu and Kashmir and Ladakh, that the entire proceeding should not be quashed being not maintainable.

The other point raised by the petitioner regarding invoking of arbitration clause, the judgement relied upon by the learned Advocate of the Opposite Party in the case of Krishna agencies(Supra) where the point raised that the applicant already taken records to arbitration proceedings and therefore the dispute was obviously a civil nature and criminal complaint could not be proceeded with. It was held by the Hon’ble Supreme Court that there can be no bar to the simultaneous continuance of a criminal proceeding and civil proceeding if the two arises from separate causes of action. In this case, the dispute was regarding dishonour of cheques attracts the provisions specially mentioned in the Negotiable Instrument Act however the present petitioner never made attempt to invoke the said clause, even when the legal notice was given to M/s Terra Motors and the said company gave reply informing that the cheques were placed for encashment in the month of September,2023 but dishonoured. Therefore, on that score also, the proceeding cannot be quashed which has been lodged under Section 138 of N.I Act.

Lastly, the point regarding premature filing of the complaint it can be seen that the first notice was received on October 13, 2023, and a complaint was lodged on November 22, 2023, that is more than after one month from the date of receipt of notice. The paragraph 13 of the complaint is clear that the notices were again sent through registered post, which was received by accused on November 7, 2023, and if the date of filing the complaint is counted from that date then it would be on the 15th day which may not be considered in terms of the settled law.

This Court is unable to accept such contention as it is clear that the notice was received firstly on 13th of October 2023 and therefore the complaint can be said to be lodged within time.

Conclusion

Therefore, upon conspectus of all the above discussion, this is also the view that instead of quashing of the entire proceeding, it is allowed to be continued so far the cheque being no. 801263 dated 26th September 2023 of Rs. 31,50,000/- issued in favour of the Opposite Party no. 2 being the complainant no.1 , Terra Motors, India Pvt Ltd by the petitioner and so far the proceeding regarding the dishonour of cheque no, 801268 dated 21st September 2023 of Rs. 1,50,000/- against opposite party No. 3 , M/S Terra Financial services Private Limited is concerned, the same stand quashed with the liberty to the complainant to lodge the complaint against the said company for taking appropriate legal remedy in respect of the cheque issued in his favour.

Hence, this revisional application is allowed in part.

No order as to costs.

The proceeding pending before the Learned Court of magistrate is quashed, so far the accused no.2 being the Opposite Party no. 3 herein is concerned and

the proceeding to be continued so far, the accused no. 1.Opposite party no. 2.

Urgent certified copy if applied by any of the parties to be supplied subject to observance of all formalities.