JUDGMENT - N.V. DABHOLKAR, J.:---The writ petition prays this Court to invoke the powers under Article 227 of the Constitution of India as also inherent powers under section 482 of Cri.P.C. 1973, for the purpose of quashing the proceedings of Criminal Case No. 130/S/1994 pending before 37th Court of Metropolitan Magistrate at Esplanade, Bombay, presided by Additional Chief Metropolitan Magistrate.

2. Facts giving rise to present petition, according to petitioners, are as follows :

Petitioner No. 2 is a company incorporated under the Companies Act and dealing in business of processing of food products such as grains, pulses, etc. Petitioner No. 1 is one of the directors.

In or about November, 1992, respondent No. 2 approached petitioners with a proposal for processing a consignment of Masoor imported by them. The proposal was accepted and executed by processing the consignment as required by respondent No. 2. With the passage of time, commercial transactions between the parties increased. In February, 1993, respondent No. 2 offered the work of processing gram/Watana to the petitioners. It was agreed that petitioner No. 2 shall effect sale of processed gram and Watana on behalf of respondent No. 2 and would get 4% commission on the sale price. As per agreement, respondent No. 2 was to get sale proceeds of processed products only upon realization of the same by petitioners from the purchasers. Respondent No. 2 had agreed to bear the expenses towards commission, transport, insurance, discount, octroi and packing material, etc.

During the business as per agreement described above, petitioners used to furnish to respondent No. 2 day-to-day details of quantity of goods received, processed, sold, amount due and received, etc. At the request of respondent No. 2, petitioners remitted entire realizations of sale proceeds without deducting anything towards processing charges, commission, etc., which was requested to be adjusted afterwards.

In or about July, 1993, at the suggestion of respondent No. 2, in order to overcome the difficulty in forwarding cheques during monsoon, petitioners, in good faith, entrusted 5 blank cheques bearing Nos. 481671 to 75 to the respondent No. 2. It was understanding between the parties that the cheques should be used for withdrawal of amount not exceeding Rs. 1,00,000/-, except with prior direction on behalf of petitioner No. 2. Those cheques were signed by a single director of petitioner No. 2. Since those were to be filled in for amount not exceeding Rs. 1,00,000/-, petitioner No. 2 had an arrangement with the bankers that in case of a cheque for withdrawing amount exceeding Rs. 1,00,000/-, it was required to be signed by two directors. At no point of time, petitioners instructed respondent No. 2 to complete the cheques by inserting the amount or to present the same to the Bank for realizing the amount.

After July, 1993, respondent No. 2 stopped entrusting work to the petitioners and expressed desire to stop dealing, without paying any amounts for the work already executed or towards commission etc. in October, 1993, petitioners requested respondents for a meeting to settle the accounts which respondent avoided. According to petitioners, amount of rupees eleven lakhs and odd is due from respondent No. 2.

In breach of all terms and conditions agreed between the parties, respondent No. 2 filed in cheque No. 481671 with an amount of Rs. 34,75,654/- and tendered the same to the Bank. It was dishonoured by Ahmednagar Sahakari Bank Ltd., Bombay, for the reason "A/c operation jointly, other director signature required". Upon enquiry by petitioners, when they learnt the above incident, respondent No. 2 apologized and agreed to settle the account in January, 1994.

Respondent No. 2 again mis-using the trust reposed, filled in amount of Rs. 28,75,654/- on cheque No. 481672 on 22-12-1993 and presented the same to the bankers for realization. The said cheque was dishonoured since it exceeded Rs. 1,00,000/- for which s

Click Here to Read the rest of this document