2008 Supreme(SC) 31

2008(1) Supreme 123
Supreme Court of india
(From Andhra Pradesh High Court)
S.B. Sinha & Harjit Singh Bedi, JJ.
Suryalakshmi Cotton Mills Ltd. — Petitioner
versus
Rajvir Industries Ltd. & Ors. — Respondents
Appeal (crl.) 62 of 2008
[Arising out of SLP(Crl.) No. 2920 of 2007]
Decided on : 09-01-2008

important point
Maintainability of a criminal proceeding should not be determined only upon raising a presumption in terms of Section 139, it being a rebuttable one.

Headnote:(a)Code of Criminal Procedure, 1973 – Section 482 – It is neither feasible nor practicable to lay down exhaustively as to on what ground the jurisdiction of the High Court under Section 482 should be exercised – Criminal proceedings however should not be encouraged when it is found to be mala fide or otherwise abuse of the process of court. (Para 17)

       1992 Supp (1) SCC 335; (1992) 4 SCC 305; (1995) 6 SCC 194; (2006) 6 SCC 736; 2007 (12) SCALE 391 – Relied upon.

       (b)Code of Criminal Procedure, 1973 – Section 482 – Criminal cases are filed only 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. (Para 18)

       (c)Negotiable Instruments Act, 1881 – Section 139 – Maintainability of a criminal proceeding like the present one should not be determined only upon raising a presumption in terms of Section 139, it being a rebuttable one. (Para 19)

       (d)Code of Criminal Procedure, 1973 – Section 482 – Before allowing the quashing application the High Court should have attempted to find out as to whether the complaint petition even if given face value and taken to be correct in its entirety constitutes an offence under Section 420, 406, 463 of the Indian Penal Code or not. (Para 20)

       (e)Indian Penal ode, 1860 – Section 420 – Blank cheques were handed over to the accused during the period 2000-2004 for use thereof for business purposes – Dispute between the parties arose much thereafter in 2005 – Hence no case of cheating u/s 420 is made out. (Para 22)

       2007 (12) SCALE 364 – Relied upon.

       (f)Indian Penal Code, 1860 – Section 120B – Filling up of the blanks in a cheque by itself would not amount to forgery – Allegation of conspiracy to issue the cheques has been levelled against the respondents but in counter affidavit their employees have been alleged to have done it – Further there is no allegation of conspiracy by respondents with their employees – Thus no case of forgery or conspiracy is made out. (Para 23)

       (g)Indian Penal Code, 1860 – Section 406 – A cheque being a property, the same was entrusted to the respondents – If the said property has been misappropriated or has been used for a purpose for which the same had not been handed over, a case under Section 406 may be found to have been made out. (Para 24)

       (h)Code of Criminal Procedure, 1973 – Section 482 – Where the first information report prima facie discloses commission of a cognizable offence, the High Court, ordinarily, shall not have interfered with investigation thereof by the statutory authority. (Para 24)

       Facts of the case:

       1.Private parties herein were the Directors of the appellant Company. They were closely related. The Company had two units: one was known as Mahaboobnagar Unit and the second was a sales depot at Tirupur. Allegedly, pursuant to negotiations representations were made that as process for obtaining cheques from the Managing Director had been taking considerable time, it would be advisable that signed blank cheques be left in the hands of accused Nos. 2 and 3 for efficient management of Mahaboobnagar Unit and Tirupur Sales Depot.

       2.Relying on or on the basis of the said representation, signed blank cheques were handed over to them during the period 2000 A.D. to 2004 A.D. Disputes and differences arose between the parties in 2005 A.D.

       3.A Scheme for arrangement submitted by the parties was approved by the High Court, and the said Scheme was fully implemented and the respondent Nos. 2 and 3 by a letter dated 22.4.2005 stated out that they would not make demand of any payment in respect of the said Mahaboobnagar Unit.

       4.L.N. Agarwal in his capacity as the Secretary of the appellant Company, allegedly made oral requests to the accused Nos. 2 and 3 to return the unused signed blank cheques.

       5.However, allegedly on the premise that Respondent Nos. 2 and 3 herein entered into a conspiracy to misuse the said cheques; an informal complaint was filed on 20.10.2006 and another complaint was filed on 30.10.2006 with Mahankali Police Station but FIR was not registered which was later done on intervention of the Addl. CMM.

       6.Respondents herein thereafter issued a letter dated 1.10.2004 as also a telegram dated 20.10.2004 stating that as the institutional liability of the respondent No. 1 had crossed 13.25 crores, with a view to repay a part of the said amount, a cheque of a sum of Rs. 6.28 crores had been drawn by the appellant in favour of the first respondent being the amount of difference which had been deposited for collection.

       7.Legal notices were, however, issued by the first respondent upon the appellant with regard to dishonour of three cheques bearing No. 444840 dated 31.7.2006 of Rs. 6.28 crores, Cheque No. 444841 dated 31.7.2006 of a sum of Rs. 3,80,77,646/- and Cheque No. 444842 dated 31.07.2006 of an amount of Rs. 3,39,12,086/-.

       8.On or about 13.11.2006, an application was filed before the High Court for quashing of the said First Information Report. By reason of the impugned judgment, the said quashing application filed by the respondents herein has been allowed.

       Findings of the Court:

       No case u/s 420 and 120B IPC has been made out, but the case u/s 406 can be found to be made out. High Court was not justified in allowing quashing of the proceedings.

       Result : Appeal partly allowed.