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TMI Blog2018 (4) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to 4 are brothers. The Petitioner No.5 is the son of the Petitioner No.2 and the Petitioner No.6 is the son of the Petitioner No.1. The subjectmatter of the FIR is the transaction between the first informant's firm and the 3 entities namely M/s. Sharp Industries Ltd., M/s. Lalit Polyester Pvt. Ltd. and M/s. Ridhi Petrochem Pvt. Ltd. It is the Petitioners' case that the Petitioner Nos.1 and 2 resigned from the Directorship of Sharp Industries Ltd. from 06/12/2010. The Petitioner Nos.3 and 4 similarly resigned from being Directors of Sharp Industries Ltd. from 21/03/2015 and 24/12/2013 respectively. The Petitioner No.5 was a Director of M/s. Lalit Polyester Pvt. Ltd. and resigned on 27/01/2014. The Petitioner No.6 is the Director of M/s. Ridhi Petrochem Pvt. Ltd. since 20/03/2010. 4. According to the Petitioners, the aforementioned 3 companies purchased Chromo Paper from the first informant's firm worth Rs. 17,01,73,377/ during the period from March 2012 up to July 2012 and that the total amount of Rs. 11,47,04,308/ was paid and the balance amount of Rs. 5,54,69,069/ remained to be paid. According to the Petitioners, 9 cheques were given to the Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustries Ltd. and they were in need of Chromo Paper for packaging. The Petitioner No.1 visited the Respondent No.2's office at Nariman Point, Mumbai and informed him that M/s. Sharp Industries Ltd. used to supply packaging material to various 'gutkha' companies and their business was growing. The Petitioner No.1 invited the Respondent No.2 to his office for discussion for purchase of Chromo Paper. Accordingly, the Respondent No.2 visited the Petitioner No.1's office. The Petitioner No.1 told the Respondent No.2 that their company was in need of 500 Metric Tonne (MT) of Chromo Paper. On 05/04/2011, the Respondent No.2 received an email sent by the Petitioner No.4 placing a trial order of 3 MT of Chromo Paper. In the said email, it was mentioned that the Petitioner No.1 was the Managing Director of the said company. The Respondent No.2 supplied the material and the bill was promptly paid on that occasion. In December 2011, the Petitioner Nos.1, 2, 3 and 5 met the Respondent No.2 and his uncle in the presence of the officers of the aforementioned Ballarpur Industries. In the meeting, the Petitioner No.1 told the Respondent No.2 that they wanted 1000 MT paper worth Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed after the Respondent No.2 had failed to secure any urgent relief in any of the proceedings. He further submitted that there was no misrepresentation whatsoever and the Respondent No.2 had supplied the material purely by way of business transaction. Mr. Jethmalani submitted that the proceedings filed against the Petitioners under Section 138 read with Section 141 of the NI Act show that the similar allegations were made in those complaints but the Courts in question have not taken cognizance of any of the offences under the IPC. According to Mr. Jethmalani, therefore, it was not open for the Respondent No.2 to lodge this FIR, particularly in view of the fact that no steps were pursued in those Courts to get the process issued under various sections of the IPC. Mr.Jethmalani further submitted that after having restricted their relief for the offences under the NI Act, the Respondent No.2 was not right in filing the FIR and therefore the FIR was liable to be quashed. 10. In support of his contentions, Mr. Jethmalani relied on various Judgments of the Hon'ble Supreme Court. He, first, relied on the Judgment of the Hon'ble Supreme Court in the case of State of Gujarat Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently, such a culpable intention right at the beginning, when the promise was made, could not be presumed. In para 15 of the Vir Pratap Sharma's (supra) Judgment, the Hon'ble Supreme Court further held that only because the accused had issued cheques which were dishonoured, the same, by itself, would not mean that he had cheated the complainant. Taking help of these observations, Mr. Jethmalani contended that mere inability to make payment of the remaining due amount would, therefore, not fall within the purview of any of the offences alleged by the Respondent No.2. 12. Mr. Jethmalani then relied on the Judgment passed by the Hon'ble Supreme Court in the case of G. Sagar Suri and Another Vs. State of U. P. and Others(2000) 2 Supreme Court Cases 636. In the said case, a complaint under Section 138 of the NI Act had already been filed by the complainant. It was observed by the Hon'ble Supreme Court that it was not explained by the complainant as to why offences punishable under Sections 406/420 of the IPC were not added in the complaint filed under Section 138 of the NI Act and it was not explained as to why a separate FIR was filed. In those circumstances, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the Judgments relied on by Mr. Jethmalani were not applicable to the facts of the present case. 15. Mr. Ponda invited our attention to the Consent Terms dated 07/03/2017 wherein the Petitioners had agreed to settle all the outstanding disputes by making payment of the agreed amount mentioned in the Consent Terms. The said Consent Terms mention the litigation between the parties including the present C.R.No.58 of 2016 registered with the EOW. Mr. Ponda submitted that in spite of entering into the Consent Terms, the Petitioners have not fulfilled their obligation; which shows their conduct. He further submitted that there is only a passing reference in the Petition to the said Consent Terms in para 6 of the Petition which reads thus : "6. The Petitioners belong to a reputed family they were influenced and / or coerced to entire (sic.) into consent terms with Respondent No.2. Thus, consent Terms were duly executed by the Petitioners." 16. Mr. Ponda invited our attention to the order dated 08/03/2017 whereby the learned Additional Chief Metropolitan Magistrate granted bail to the Petitioner No.1. In para 5 of the said order, it was observed thus : "5. By going through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the Petitioner No.1 was not incharge of affairs of M/s. Sharp Industries Ltd. amounted to forgery of documents and using such documents for the purpose of cheating. Therefore, according to Mr. Ponda, all the cognizable offences were clearly made out from the FIR. Therefore, the said FIR could not be quashed. 19. In support of his submissions, Mr. Ponda relied on a few Judgments. He first referred to the observations of the Hon'ble Supreme Court in the case of Rajesh Bajaj Vs. State NCT of Delhi and others AIR 1999 SUPREME COURT 1216 (1). In the said case, the complainant had supplied goods to the accused. The purchase price promised by the accused was not paid to the complainant. It was alleged in the said complaint that the accused had induced the complainant to believe that he was a genuine dealer but his intentions were not clear. In that case also, the argument was advanced that it was purely a commercial transaction and no offence was made out. The Hon'ble Supreme Court dealt with the submissions in paragraph nos.10 to 13 of the Judgment thus : "10. It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cognizance of an offence punishable under Section 138 only on a complaint in writing made by the payee. Therefore, the police could not have started investigation under Section 138 of the Act. But if a cheque is dishonoured drawer may expose himself to prosecution under various Sections of the Indian Penal Code which are cognizable and police could take up investigation. What was indicated in the notice was that in addition to the legal action by the appellant Bank under the Act, option was kept open for taking action against the respondents under the provisions of Indian Penal Code by informing the police. Therefore, the contention of learned counsel for the respondents has no force." Thus, according to Mr. Ponda, the separate FIR under the various sections of the IPC was perfectly maintainable in respect of the earlier pending complaints under Section 138 of the NI Act. 21. Mr. Ponda then relied on the Judgment in the case of Sesami Chemicals Private Limited Vs. State of Meghalaya and Another (2014) 16 Supreme Court Cases 711. In the said case, the complainant had filed FIR under Sections 120B, 418 and 420 of the IPC and thereafter had also filed criminal proceedings in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and avoiding to meet the Respondent No.2, shows the dishonest intention on the part of the Petitioners. In any case, it cannot be said that no cognizable offence is made out from the allegations in the FIR. 25. The submission of Mr. Jethmalani that once the proceedings under Section 138 of the NI Act were initiated mentioning the alleged cheating, and once the Magistrate had taken cognizance only under Section 138 of the NI Act, the FIR could not be lodged under various sections of the IPC; cannot be accepted. Taking into account the ratio laid down by the Hon'ble Supreme Court in the cases of G. Sagar Suri (supra), Central Bank of India and another (supra) and Sesami Chemicals Private Limited (supra), we are of the opinion that the complainant can approach the police and lodge his FIR irrespective of the fact that he is entitled to file a separate private complaint under Section 138 of the NI Act. However, we make it clear that filing of the complaint under Section 138 of the NI Act will not automatically entitle the complainant to lodge the FIR. The complainant, in such cases, will have to make out a case of commission of a cognizable offence or cognizable offences which is ..... 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