IMPORTANT POINTS
(1) Principle of res judicata is equally applicable in criminal matters.
(2) Dishonour of cheque – A person cannot be vicariously prosecuted, especially for offences under IPC, merely on account of fact that he holds a managerial position in a company without there being specific allegations regarding his involvement in offence.

JUDGMENT :

PRASHANT KUMAR MISHRA, J.

1. Challenge in this Criminal Appeal is to the final judgment and order dated 28.04.2017 passed by the High Court of Judicature at Allahabad whereby the appellant’s petition under Section 482 of the Criminal Procedure Code, 1973,¹[‘Cr.P.C.’] seeking quashment of Criminal Case No. 7489 of 2002 pending on the file of Chief Judicial Magistrate, Ghaziabad for offences under Section 420 of the Indian Penal Code, 1860,²[‘IPC’], has been dismissed.

2. Brief facts necessary for disposal of the criminal appeal are that the appellant/S.C. Garg,³[‘Garg’] was the Managing Director of the Company Ruchira Papers Ltd.,⁴[‘Company’] which was engaged in manufacturing craft papers. The Company had business dealings with ID Packaging, a partnership concern of respondent no. 2/R.N. Tyagi,⁵[‘Tyagi’]. In conduct of business between two entities, the parties used to maintain a running account and Tyagi used to issue cheques from time to time in favour of ID Packaging. Between 22.12.1997 to 30.01.1998, Tyagi issued 11 cheques which were initially dishonoured due to insufficiency of funds in the account. To maintain business relations, both the parties agreed to present the 11 cheques again at a later stage upon instructions from Tyagi. In relation to the liabilities other than the amount involved in the 11 cheques, Tyagi made payment by issuing 03 demand drafts in the name of the appellant’s company. On 08.06.1998, 11 cheques were again presented for encashment upon which only four cheques were cleared leaving the remaining 07 cheques to be dishonoured again. The appellant’s company filed a complaint under Section 138 of the Negotiable Instruments Act, 1881,⁶[‘NI Act’] against ID Packaging and Tyagi in relation to the 07 dishonoured cheques.

3. On 25.10.2002, the learned Magistrate convicted Tyagi for offence under Section 138 of the NI Act. His defence, that there is no enforceable debt as the amount involved in 07 cheques has already been paid through the demand drafts, was rejected with a specific finding that the demand drafts pertained to other liabilities of Tyagi to the company and were not towards liquidating the liability arising under the cheques in question. Tyagi was sentenced to imprisonment till rising of Court and pay fine of Rs. 3,20,385/- (i.e. cumulative amount of the 7 dishonoured cheques). The appeal preferred by Tyagi challenging his conviction under Section 138 of the NI Act was dismissed by the learned Additional Sessions Judge on 17.03.2005 by affirming the finding, conviction and sentence awarded to him.

4. Tyagi and his Company/ID Packaging challenged the appellate order by preferring criminal revision and vide order dated 10.10.2012 the High Court disposed of criminal revision as well as two other proceedings between the parties basis compromise between them. When the criminal revision challenging his conviction was pending, the sentence was suspended upon deposit of R. 3,20,385/-. The High Court disposed of three different proceedings between the parties by observing thus in paragraph nos. 5 & 6 of the order:

“5. When these petition/appeal/ revision were taken up today, Sh. R.N. Tyagi, who is present in Court along with his counsel Sh. Rampal Tyagi and Ashok Tyagi expressed his desire to put an end to the entire controversy on the condition that the amount deposited by him in this Court by demand draft pursuant to the orders passed in the Criminal Revision (supra) along with interest be paid to M/s Ruchira Papers in full satisfaction of all their claims, subject matter of criminal appeal No. 752 of 2002, CMPMO No. 305 of 2012 and in Civil Suit No. 47/1 of 2005/01, titled as M/s Ruchira Papers versus M/s I.D. Packings, decreed on 23.09.2005. Statement of Sh. R.N. Tyagi, who is present in Court, to this effect has been recorded separately, which statement has been accepted by Sh. Sanjeev Sood, learned counsel on behalf of M/s Ruchira Papers.

6. In these circumstance, all three cases are being di