TMI Blog2022 (4) TMI 1434X X X X Extracts X X X X X X X X Extracts X X X X ..... res transactions, there is a time lag between money going out from the buyer and shares reaching to the seller. In earlier days the time gap was longer. It has now become speedier but the gap still remains. The share transactions in India generally follows this pattern. It is also relevant to bear in mind that the burden of proving that there is no existing debt or liability, is to be discharged in the trial. On careful reading of the complaint and the order passed by the Magistrate, what is discernible is that a possible view is taken that the cheques drawn were, in discharge of a debt for purchase of shares. In any case, when there is legal presumption, it would not be judicious for the quashing Court to carry out a detailed enquiry on the facts alleged, without first permitting the trial Court to evaluate the evidence of the parties. The quashing Court should not take upon itself, the burden of separating the wheat from the chaff where facts are contested. To say it differently, the quashing proceedings must not become an expedition into the merits of factual dispute, so as to conclusively vindicate either the complainant or the defence. The consequences of scuttling th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be considered within the parameters of limited enquiry permissible in a petition under Section 482 Cr.P.C. Accordingly, the petition was dismissed but the accused s liberty to raise his defence in the competent Court was safeguarded in the impugned order. 3. For the appellant, Mr. Krishnamohan K., the learned counsel argues that without satisfying the essential ingredients for the offence under Section 138 of the N.I. Act to the effect that the dishonoured cheque received by the complainant is against legally enforceable debt or liability , the criminal process could not have been issued. Relying on few judgments, it is next argued that the ingredients necessary to constitute the offence under Section 138 of the N.I. Act is missing in the instant case and therefore the appellant cannot be prosecuted for the offence under the said provision. According to the appellant, the concerned post-dated cheques drawn by him in favour of the complainant were, contingent/security cheques for buyback of shares of AAT Academy (appellant s company), held by the complainant, and therefore the cheques could not have been prematurely presented to the bank and should have been prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h led to the summons and process against the appellant. 6. As noted earlier, the appellant s basic contention is that the cheque in question was not issued in discharge of legally recoverable debt . They also raised a contention on the obligation of the complainant to transfer the concerned shares. A defence plea is raised by the appellant to the effect that the cheques in question were issued as security and not in discharge of any legally recoverable debt . 7. The learned Judge of the Delhi High Court while considering the petition under Section 482 Cr.P.C kept in mind the scope of limited enquiry in this jurisdiction by referring to the ratio in HMT Watches Limited vs. M.A. Abida Anr [(2015) 11 SCC 776]. and in Rajiv Thapar Ors. vs. Madan Lal Kapoor [(2013) 3 SCC 330] and opined that the exercise of powers by the High Court under Section 482 Cr.P.C, would negate the complainant s case without allowing the complainant to lead evidence. Such a determination should necessarily not be rendered by a Court not conducting the trial. Therefore, unless the Court is fully satisfied that the material produced would irrefutably rule out the charges and such materials bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to bear in mind that the burden of proving that there is no existing debt or liability, is to be discharged in the trial. For a two judges Bench in M.M.T.C. Ltd. Anr. vs. Medchl Chemicals and Pharma (P) Ltd. Anr. [(2002) 1 SCC 234], Justice S.N. Variava made the following pertinent observation on this aspect: - 17. There is therefore no requirement that the complainant must specifically allege in the complaint that there was a subsisting liability. The burden of proving that there was no existing debt or liability was on the respondents. This they have to discharge in the trial. At this stage, merely on the basis of averments in the petitions filed by them the High Court could not have concluded that there was no existing debt or liability. 11. The legal presumption of the cheque having been issued in the discharge of liability must also receive due weightage. In a situation where the accused moves Court for quashing even before trial has commenced, the Court s approach should be careful enough to not to prematurely extinguish the case by disregarding the legal presumption which supports the complaint. The opinion of Justice K.G. Balakrishnan for a three judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take upon itself, the burden of separating the wheat from the chaff where facts are contested. To say it differently, the quashing proceedings must not become an expedition into the merits of factual dispute, so as to conclusively vindicate either the complainant or the defence. 14. The parameters for invoking the inherent jurisdiction of the Court to quash the criminal proceedings under S.482 CrPC, have been spelled out by Justice S. Ratnavel Pandian for the two judges bench in State of Haryana v. Bhajan Lal [AIR 1992 SC 604], and the suggested precautionary principles serve as good law even today, for invocation of power under Section 482 of the Cr.P.C. 103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice. 15. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nant, at the stage of the summoning order, when the factual controversy is yet to be canvassed and considered by the trial court will not in our opinion be judicious. Based upon a prima facie impression, an element of criminality cannot entirely be ruled out here subject to the determination by the trial Court. Therefore, when the proceedings are at a nascent stage, scuttling of the criminal process is not merited. 19. In our assessment, the impugned judgment is rendered by applying the correct legal principles and the High Court rightly declined relief to the accused, in the quashing proceeding. Having said this, to rebut the legal presumption against him, the appellant must also get a fair opportunity to adduce his evidence in an open trial by an impartial judge who can dispassionately weigh the material to reach the truth of the matter. At this point, one might benefit by recalling the words of Harry Brown, the American author and investment advisor who so aptly said - A fair trial is one in which the rules of evidence are honored, the accused has competent counsel, and the judge enforce the proper court room procedure a trial in which every assumption can be challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X
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