The Yamakanamardi Urban Co-operative Credit Society Limited vs Sri Raju Basavantrao Bhosale

K. Sreedhar Rao, J.—Both the cases involve common question of law and fact and between the same parties. However two different cheques were issued and separate prosecutions are launched by way of private complaint. The Petitioner herein is the complainant before the trial Court in respect of the discharge of loan the Respondent issued the cheques. The said cheques were dishonoured. The statutory notice as required u/s 138 of the Negotiable Instruments Act was issued and after expiry of 15 days time and within one month the complaints are filed. On the filing of the private complaint, the Magistrate took cognizance and issued summons to the accused. The accused after appearance, filed the Revision before the Sessions Judge, Belgium challenging the issuance of summons on the ground that the complainant is a Co-operative Society. In respect of the loan liabilities, the cheques which were issued and the said liabilities were made subject matter of arbitration and award is passed. Therefore after the issuance of award, it is contended that the liabilities whatever incurred under the cheque gets merged with the liability under the award and therefore, there is no cause of action available for the Petitioner to launch the prosecution u/s 138 of the Negotiable Instruments Act. The Sessions Judge upheld the contention of the Respondent, allowed the Revisions and dismissed the complaints. Being aggrieved by the order, the present petitions are filed.

After going through the impugned order and hearing the Counsel, I find that the order of the Sessions Judge is not tenable in law. The Ruling of the Supreme Court in Rajneesh Aggarwal v. Amit J. Bhalla AIR 2001 SCW 124 wherein it is held thus:

So far as the criminal complaint is concerned, once the offence is committed, any payment made subsequent thereto will not absolve the accused of the liability of criminal offence, though in the matter of awarding of sentence, it may have some effect on the Court trying the offence. But by no stretch of imagination a criminal proceeding could be quashed on account of deposit of money in the Court or that an order of quashing of criminal proceeding, which is otherwise unsustainable in law, could be sustained because of the deposit of money in this Court. In this view of the matter, the so-called deposit of money by the Respondent in this Court is of no consequence

In the instant case also both the loan liabilities were made subject matter of arbitration and award came to be passed. The civil liability to pay the debt under award is a distinct liability. However any penal liability incurred consequent to the dishonour of cheque which amounts to an offence u/s 138 of the Negotiable Instruments Act is a different and independent liability and the award would not get absolved merely because the debt liability has merged into an award or a decree.

Therefore, under the circumstances, the order passed by the learned Sessions Judge is set aside. The complaints are restored to file and the trial Court is directed to proceed with the case with further enquiry in accordance with law.