2010(1) ALL MR 181
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BILAL NAZKI AND A.R. JOSHI, JJ.
Chanchal Choudhary Vs. State Of Maharashtra & Ors.
Criminal Writ Petition No.842 of 2006,Criminal Writ Petition No.843 of 2006
15th September, 2009
Petitioner Counsel: Mr. SUBHAS ZHA,M/s. Law Global
Respondent Counsel: Dr. F. R. SHAIKH
(A) Negotiable Instruments Act (1881) S.139 - Presumption under - Once a cheque is issued by a person, there would be a presumption in favour of the holder of the cheque that cheque was issued in discharge of a debt - This onus can only be discharged by person who issues cheque if he proves to the contrary and such a proof cannot be accepted in a proceeding under Art.226 of the Constitution of India. (1994)1 SCC 1 - Ref. to. (Para 10)
(B) Negotiable Instruments Act (1881) S.138(a) - Prosecution under - Fraud - Held, fraud is a question of fact and has to be proved before the consequences follow. 1992 Supp (1) SCC 335 - Ref. to. (Para 14)
S. P. Chengal Varaya Naidu (Dead) by LRs. Vs. Jagannath (Dead) by LRs., (1994)1 SCC 1 [Para 11]
Uma Shankar Sitani Vs. Commissioner of Police, Delhi, (1996)11 SCC 714 [Para 11]
Baburao Dagdu Paralkar Vs. State of Maharashtra, (2005)7 SCC 605 [Para 11]
Suraylakshmi Cotton Mills Ltd. Vs. Rajvir Industries Ltd., (2008)13 SCC 678 [Para 11]
R. Kalyani Vs. Janak C. Mehta, (2009)1 SCC 516 [Para 11]
Vijay Shekhar Vs. Union of India, 2004 ALL MR (Cri) 3126 (S.C.)=(2004)4 SCC 666 [Para 13]
State of Haryana Vs. Bhajan Lal, 1992 Supp (1) SCC 335 [Para 15]
BILAL NAZKI, J.:- These Writ Petitions have been filed in year 2006. On September 21, 2006, Rule was issued, and interim relief was granted. As a result, the trial has not started in the matters for the last three years.
2. When the petitions came up before the Court, the learned advocate for the petitioner sought an adjournment. They were adjourned to 6th May, 2009. Again, adjournment was sought. Adjournment was granted, but the stay was vacated, and the learned Metropolitan Magistrate, 43rd Court at Borivali, Mumbai, was directed to expedite the trial.
4. Respondents No.2 and 3 have not appeared, though counter-affidavits have been filed on their behalf. We have heard the learned counsel for the petitioner at great detail. The facts in both the petitions are almost similar. For the sake of convenience, we refer to the facts in the first petition, viz., Criminal Writ Petition No.842 of 2006 :
5. Before mentioning the facts, it will be necessary to note that the complaint, which is sought to be quashed, was filed in year 2005, and a Writ Petition, No.7082 of 2005, was filed by the petitioner, which was withdrawn, as, according to him, certain documents were not annexed to the petition. Thereafter, this petition was filed. It is stated in this petition that he has sought leave of the Court to file a fresh petition.
6. The complaint discloses that the accused had failed and neglected to pay an amount of Rs.50,000/-, being the amount due and payable to the complainant as per the complainant's account book for the arrears of the Society for maintenance and other dues approved by the accused. A cheque drawn on ICICI Bank Ltd. of Rs.50,000/- was accordingly issued by the accused on 7th August, 2003. This cheque was returned unpaid by the bank with the remark : "Date not clear".
7. Thereafter, a notice was given as contemplated under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter, "the Act", for short), which was received by the accused on 4th March, 2004. Acknowledgment was also received by the complainant on 6th March, 2004. There was no response to the notice.
8. The only ground on which the prosecution has been challenged is that the cheque, which was produced by the complainant before the bank, was obtained by him by fraud. The petitioner wants this Court to take into consideration the documents submitted by him along with this petition, including a notice given by respondent No.2 to the petitioner before the cheque was issued, thereby placing on record circumstances under which, according to him, cheques aggregating Rs.1,50,000/were issued in favour of respondent No.2 and the cheque in question for Rs.50,000/- was issued by respondent No.1.
9. The learned counsel for the petitioner submits that the prosecution was launched with an ulterior motive and with a view to launch an absolutely frivolous prosecution. He further submits that the prosecution was launched out of vendetta against the members of the Akurli Satya Co-operative Housing Society Ltd.. The learned counsel, laying emphasis on the documents he has produced, wants to show to this Court that the cheque issued by the petitioner was, in fact, the result of fraud. We have heard the learned counsel for the petitioner in detail, and we have perused also the petitions in detail. Nowhere the issuance of cheques has been disputed by the petitioner even in these petitions. The petitioner, in paragraphs 9 and 10 of the petition, states as follows :
"9. The Respondent No.2 alleges that the Petitioner had issued the impugned cheque in discharge of legally enforceable debt and/or liability towards maintenance of arrears of society for maintenance and other dues approved by the Petitioner, whereas Satya Co-operative Housing Society Ltd. for which the Respondent No.2 is the Promoter and Ex-Secretary had issued a letter dated 17.5.2003 in favour of ICICI Home Finance Company Ltd. inter alia stating therein that there are no outstanding dues/charges payable by the Petitioner in respect of Flat No.1304 and that he has paid all the taxes and dues in respect of the said flat up to date. Similarly, the Respondent No.2 has issued a receipt in favour of the Petitioner dated 21.5.2003 inter alia stating therein that the cheque under question have been issued against flat construction cost in respect of Flat No.1304...
10. The Petitioner states and submits that the Respondent No.2 proceeded to file the impugned complaint against him without he being authorised to represent the society under question. The society never authorised and/or instructed the Respondent No.2 to file the complaint against the Petitioner. The Respondent No.2 as a mater of fact has been ousted from Akurli Satya Co-operative Housing Society because of the Respondent indulging in misuse & defalcation of the funds of the society, running into several crores of rupees. Defalcation/siphoning of society's funds also led to arrest & detention of the Respondent No.2 in two cases registered against him by Kurar Village Police Station, being C.R. Nos.119/04 & 122/04. The Petitioner craves leave of this Hon'ble Court to refer to and rely upon the records & proceedings concerning these two cases & court records, when produced. The petitioner with a view to avoid prolonged and protracted litigation amicably settled the matter concerning the cheques under question by effecting entire payment of Rs.1,50,000/- by account payee cheques, drawn in favour of Akurli Satya Co-op. Hsg. Society Ltd. by another set of cheques. The said society has executed an indemnity bond dated 22.9.2005 thereby indemnifying the Petitioner in the event of any liability being accrued to him in this regard. The Petitioner as a matter of fact moved out of flat No.1304 and is no more member of Akurli Satya Co-Op. Hsg. Society Ltd. Perusal of the deed of indemnity bond dated 22.9.2005 leaves no matter of doubt whatsoever that the impugned complaint is not maintainable and permitting prosecution to continue on the basis of such frivolous complaint would be nothing short of permitting an act of illegality to continue and such litigant would get a wrong message inasmuch as that they can get away with anything and everything..."
"Presumption in favour of holder.- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in section 138, for the discharge, in whole or in part, of any debt or other liability."
A perusal of Section 139 would show that once a cheque is issued by a person, there would be a presumption in favour of the holder of the cheque that the cheque was issued in discharge of a debt. This onus can only be discharged by the person who issues the cheque if he proves to the contrary and such a proof cannot be accepted in a proceeding under Article 226 of the Constitution of India. Even if we had to agree with the learned counsel for the petitioner, which we are afraid we cannot, that we could take the documents into consideration, which he has produced in these petitions filed under Article 226 of the Constitution of India, even then, it was not possible for this Court to come to a conclusion that the petitioner has discharged the onus under Section 139 of the Act.
(1) S. P. Chengal Varaya Naidu (Dead) by LRs. Vs. Jagannath (Dead) by LRs. & Ors., reported in (1994)1 Supreme Court Cases 1.
(2) Uma Shankar Sitani Vs. Commissioner of Police, Delhi & Ors., reported in (1996)11 Supreme Court Cases 714.
(3) Baburao Dagdu Paralkar Vs. State of Maharashtra & Ors., reported in (2005)7 Supreme Court Cases 605.
(4) Suraylakshmi Cotton Mills Limited Vs. Rajvir Industries Limited & Ors., reported in (2008)13 Supreme Court Cases 678.
(5) R. Kalyani Vs. Janak C. Mehta & Ors., reported in (2009)1 Supreme Court Cases 516.
12. All these judgments relate to fraud, and the submission of the learned counsel for the petitioner is that the complaint can be quashed at this stage, because the cheque in question is the result of fraud. We have no quarrel with the principle that the prosecution could be quashed if it was found that the cheque issued was result of a fraud; but, again, the question remains whether this Court would be in a position to come to a conclusion that the cheque issued was result of a fraud ?
13. In this connection, the learned counsel for the petitioner has placed reliance on a judgment of the Supreme Court in Vijay Shekhar & Anr. Vs. Union of India & Ors., reported in (2004)4 SCC 666 : [2004 ALL MR (Cri) 3126 (S.C.)]. This order of the Supreme Curt was passed in a petition in which persons, who could not have been prosecuted in law, were made accused. Although in paragraph 2, the Supreme Court said that the Writ Petition raised important issues of legal and public importance, but we find that a concession of the parties was also made. This judgment was passed in the peculiar circumstances of the case, and the Court found that the order taking cognizance of the matter was a result of fraud, and, therefore, the prosecution was quashed. There were the affidavits of the lawyers, who appeared for the so-called complainants before the Magistrate, who admitted the contents of the Writ Petition, and in paragraph 7 of the judgment, the Court noted :
"From the affidavit filed on behalf of the said lawyers and from the arguments addressed today on their behalf, it is clear that at least as on today they are also in agreement with the writ petitioner that the contents of the complaint are not genuine though they categorically state that the said statement was recorded at the instance of one Suresh Kumar Jethalal Sanghvi who had approached them to file a complaint and on the basis of the facts narrated by him the said complaint was drafted and filed."
14. We do not feel that this judgment will apply to the facts of the case. Rest of the judgments relied upon define fraud, and also deal with the effects of fraud on a judicial proceeding. But the question would remain whether fraud was proved in this case ? Fraud is a question of fact and has to be proved before the consequences follow. In the present proceedings, it is not possible for this Court to come to a conclusion that the prosecution under Section 138-A of the Act was result of a fraud. It is particularly difficult in view of the mandate of Section 139 of the Act. The petitioners did not challenge issuance of cheques or their bouncing. Therefore, unless they discharge the onus, the Court will believe that the cheques were issued for payment of debts.
15. In paragraph 102 of the judgment in State of Haryana & Ors. Vs. Bhajan Lal & Ors. reported in 1992 Supp (1) Supreme Court Cases 335, the Supreme Court, after analysing the law on the subject, held that prosecution could be quashed in cases which were illustrated by it as follows :
"(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."
16. If we take these principles into consideration, we find that the complaints disclose a prima facie case, and these petitions deserve to be dismissed, and are accordingly dismissed. The Rule is discharged.