Judicial Analysis Court Copy Headnote Facts Arguments Court observation

JAMMU AND KASHMIR HIGH COURT
Sanjay Kumar Gupta, J.
M/s Grand Batteries Pvt. Ltd. and Ors. —Petitioners
versus
M/s Osaka Alloya and Steels Pvt. Ltd.
c/w connected matter —Respondent
CRR No.77 of 2016, IA No.01 of 2016 c/w
CRR No.78 of 2016, IA No.01 of 2016
CRR No.79 of 2016, IA No.01 of 2016
Decided on 3.11.2018

Advocates:
Counsel for the Parties:
For the Petitioners:Mr. Sunil Sethi, Sr. Advocate with Mr. Nitin Parihar, Advocate
For the Respondent:Mr. R.P. Sharma, Advocate

IMPORTANT POINT
Once issuance of a cheque and signature thereon are admitted, presumption of a legally enforceable debt in favour of the holder of the cheque arises. It is for the accused to rebut the said presumption.

Headnote:(i) Negotiable Instruments Act, 1881—Section 141—Dishonour of cheque issued by company—Prosecution of company and directors—Petition for quashing complaint on plea that Petitioners Nos.3 and 4 had already resigned prior to filing of complaint by writing a letter to Board of Directors—Complaint Specifically mentioned that petitioner-accused were directors of company and were in control of affairs of said company—Defence taken was required to be proved during trial.
        (Paras 13 and 14)
       (ii) Negotiable Instruments Act, 1881—Section 139—Prosecution for dishonour of cheque—Petition for quashing complaint on plea that cheques were issued as security when there was no liability and were issued during purchase order—Pleas raised in quashing petition were rebuttable facts to the facts narrated in complaint—Complaint was not liable to be quashed. (Paras 15 to 21)
       Result: Petition dismissed.

JUDGMENT

Sanjay Kumar Gupta, J.—Since common questions of law and facts have arisen for consideration in these criminal revision petitions, these were heard analogously and are being decided by this common order.

CRR No.77/2016

2. In this criminal revision, the petitioners inter alia have assailed the validity of order dated 04.07.2017 passed by the Munsiff, JMIC, Samba in complaint, titled, Osaka Alloys and Steels Pvt. Ltd. Vs. Grand Batteries and others, whereby cognizance of the complaint was taken and process against the petitioners was issued as well as the subsequent orders passed by the Munsiff, JMIC, Samba. The petitioners also seek quashing of complaint under section 138 of Negotiable Instruments Act.

CRR No.78/2016

3. In this criminal revision, the petitioners inter alia have assailed the validity of order dated 31.08.2016 passed by the Chief Judicial Magistrate, Samba in complaint, titled, Osaka Alloys and Steels Pvt. Ltd. Vs. Grand Batteries and others, whereby cognizance of the complaint was taken and process against the petitioners was issued as well as the subsequent orders passed by the Chief Judicial Magistrate, Samba. The petitioners also seek quashing of complaint under Section 138 of Negotiable Instruments Act.

CRR No.79/2016

4. In this criminal revision, the petitioners inter alia have assailed the validity of order dated 31.08.2016 passed by the Chief Judicial Magistrate, Samba in complaint, titled, Osaka Alloys and Steels Pvt. Ltd. Vs. Grand Batteries and others, whereby cognizance of the complaint was taken and process against the petitioners was issued as well as the subsequent orders passed by the Chief Judicial Magistrate, Samba. The petitioners also seek quashing of complaint under section 138 of Negotiable Instruments Act.

5. For facility of reference, the facts in brief are taken from CRR No.77/2016. The petitioner No. 1 is a Private Limited Company duly incorporated under the Companies Act, 1956 and registered with the Registrar of Companies Rajasthan. The petitioner No. 2 is one of the Directors of the petitioner No. 1-Company, whereas the petitioner Nos. 3 & 4 were also the directors of the company but have resigned and are no more associated or dealing with the affairs of the petitioner No. 1-Company. The petitioner No.1-Company is manufacturer of Batteries having its industrial unit in the State of Rajasthan. The petitioner No.1-Company in connection with manufacturing of Batteries was requiring Lead and Lead Alloys, and accordingly came in contact with the respondent, who is engaged in the business of manufacturing of Lead Alloys having one of its industrial unit in the State of Jammu and Kashmir at Industrial Growth Centre, Samba. It is contended that after due negotiations with respect to purchase of aforesaid products from the respondent, the petitioner No.1-Company placed a standing purchase order dated 15.10.2014 with the respondent for supply of Lead and Lead Alloy on the terms and conditions as were stipulated in the said Standing Purchase Order. The Purchase Order issued by the petitioner No. 1-Company was for a period of one year only. It was further envisaged in the Standing Purchase Order dated 15.10.2014 that rate of each consignment will be discussed and then proforma invoice will be raised by the respondent at the agreed rate of payment.

6. The significant condition of the Standing Purchase Order dated 15.10.2014 after due negotiation with the respondent was that the petitioner No.1 will provide to the respondent security cheques so that the respondent could start and complete the production and at the time of dispatch, payment was required to be made through RTGS/LC. It is also indicated in the said Standing Purchase Order that use of security cheques will be invalid and illegal. It is further contended that the petitioner No.1-Company has provided as many as 27 cheques of different amounts from time to time as security notwithstanding the fact that it has made all the payment

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IMPORTANT POINTOnce issuance of a cheque and signature thereon are admitted, presumption of a legally enforceable debt in favour of the holder of the cheque arises. It is for the accused to rebut the said presumption.

Cases Referred (1)

IMPORTANT POINT
Once issuance of a cheque and signature thereon are admitted, presumption of a legally enforceable debt in favour of the holder of the cheque arises. It is for the accused to rebut the said presumption.