TMI Blog2017 (4) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to above, the proceedings of the Criminal Case pending before the court of the learned Metropolitan Magistrate, Surat, are hereby ordered to be quashed. Rule made absolute. - CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE FIR/ORDER) NO. 14352 of 2015 - - - Dated:- 29-3-2017 - MR. J.B.PARDIWALA, J. FOR THE APPLICANT : MR ASIM J PANDYA, ADVOCATE FOR THE RESPONDENT : MR LIYAKAT I MEHTA, ADVOCATE, MS NISHA THAKORE, APP ORAL ORDER RULE returnable forthwith. Ms.Nisha Thakore, the learned APP, waives service of notice of rule for and on behalf of the respondent no.1 State of Gujarat. Mr.Liyakat Mehta, the learned counsel waives service of notice of rule for and on behalf of the respondent no.2 original complainant. By this application under Section 482 of the Code of Criminal Procedure, 1973, the applicant original accused seeks to invoke the inherent powers of this Court, praying for quashing of the proceedings of the Criminal Case No.920 of 2015 pending before the court of the learned Metropolitan Magistrate, Surat, for the offence under Section 138 of the Negotiable Instruments Act. The respondent no.2 is a limited company. The company is enga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued way back in the year 2011 towards the security as one of the terms and conditions of the dealership. On the other hand, this application has been vehemently opposed by Ms.F.I.Mansuri, the learned counsel appearing for the complainant. According to Ms.Mansuri, more than a prima facie case could be said to have been made out and, therefore, the application deserves to be rejected. Ms.Mansuri submitted that as the accused failed to give any reply to the statutory notice issued by her client, the accused should not be heard now at this stage in the present proceedings. Having heard the learned counsel appearing for the parties and having considered the materials on record, the only question that falls for my consideration is, whether the complaint deserves to be quashed. The company, i.e. the complainant, addressed a letter dated 31st March 2013 to the accused, which reads as under : 31st March 2013 To, M/s.Bajrang Sales Surat SUB : CONFIRMATION OF BALANCE AS ON 31st MARCH 2013 Dear Sir, In connection to the audit of our accounts, we request you to confirm your balance of ₹ 76,26,766/- due to us as on 31st March 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 on 01/04/2013 within 7 days. The following is not in dispute : (1) The company offered dealership to the accused and the same was accepted by the accused subject to certain terms and conditions; (2) In the year 2011, a blank cheque duly signed by the accused was handed over to the complainant by way of security; (3) The materials on record, prima facie , indicates that the cheque was from a cheque-book of the year 2011. I need not go into this issue as this fact has not been disputed. The moot question is, whether on the date the blank cheque was handed over to the complainant, there was any existing debt or liability so as to bring the case within the ambit of Section 138 of the Negotiable Instruments Act ? The learned counsel appearing for the complainant has placed reliance on a recent pronouncement of the Supreme Court in the case of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited, (2016)10 SCC 458, wherein the Supreme Court observed as under : 6. It will be appropriate to reproduce the statutory provision in question which is as follows : 138. Dishonour of cheque for insufficiency, etc., of funds in the accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced by learned counsel for the appellant. The question therein was whether postdated cheque issued by way of advance payment for a purchase order could be considered for discharge of legally enforceable debt. The cheque was issued by way of advance payment for the purchase order but the purchase order was cancelled and payment of the cheque was stopped. This Court held that while the purchaser may be liable for breach of the contract, when a contract provides that the purchaser has to pay in advance and cheque towards advance payment is dishonoured, it will not give rise to criminal liability under Section 138 of the Act. Issuance of cheque towards advance payment could not be considered as discharge of any subsisting liability. View to this effect of the Andhra Pradesh High Court in Swastik Coaters (P) Ltd. versus Deepak Bros., 1997 CriLJ 1942, Madras High Court in Balaji Seafoods Exports (India) Ltd. versus Mac Industries Ltd., (1999)1 CTC 6, Gujarat High Court in Shanku Concretes (P) Ltd. versus State of Gujarat, 2000 CriLJ 1988 and Kerala High Court in Supply House versus Ullas, 2006 CriLJ 4330 was held to be correct view as against the view of Delhi High Court in Magnum Aviat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r liability or whether it represents advance payment without there being subsisting debt or liability. While approving the views of different High Courts noted earlier, this is the underlying principle as can be discerned from discussion of the said cases in the judgment of this Court. 13. In Balaji Seafoods (supra), the High Court noted that the cheque was not handed over with the intention of discharging the subsisting liability or debt. There is, thus, no similarity in the facts of that case simply because in that case also loan was advanced. It was noticed specifically therein as was the admitted case of the parties that the cheque was issued as security for the advance and was not intended to be in discharge of the liability, as in the present case. 14. In HMT Watches Ltd. versus M.A. Abida[8], relied upon on behalf of the respondent, this Court dealt with the contention that the proceedings under Section 138 were liable to be quashed as the cheques were given as security as per defence of the accused. Negativing the contention, this Court held :- 10. Having heard the learned counsel for the parties, we are of the view that the accused (Respondent 1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng mere harassment to the accused. While we are not oblivious of the fact that although a large number of disputes should ordinarily be determined only by the civil courts, but criminal cases are filed only for achieving the ultimate goal, namely, to force the accused to pay the amount due to the complainant immediately. The courts on the one hand should not encourage such a practice; but, on the other, cannot also travel beyond its jurisdiction to interfere with the proceeding which is otherwise genuine. The courts cannot also lose sight of the fact that in certain matters, both civil proceedings and criminal proceedings would be maintainable. 12. In Rallis India Ltd. v. Poduru Vidya Bhushan [(2011) 13 SCC 88], this Court expressed its views on this point as under: (SCC p. 93, para 12) 12. At the threshold, the High Court should not have interfered with the cognizance of the complaints having been taken by the trial court. The High Court could not have discharged the respondents of the said liability at the threshold. Unless the parties are given opportunity to lead evidence, it is not possible to come to a definite conclusion as to what was the date when the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X
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