IMPORTANT POINT
Dishonour of cheque – Proceedings under Section 138 of NI Act would lie only in respect of any ‘enforceable debt’.

JUDGMENT (ORAL)

Gita Gopi, J.—By way of this application filed under Section 482 of the Code of Criminal Procedure read with Article 226 of the Constitution of India, the applicants have prayed to quash and set aside the order dated 18.11.2019 passed by the Court of learned 13th Additional Chief Judicial Magistrate, Rajkot below Exhibit-1 in Criminal Case No.16873 of 2019 whereby, the complaint filed by respondent No.2 herein, original complainant, under section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the NI Act”) was ordered to be registered and process under Section 204 of Cr.P.C. was ordered to be issued against the applicants herein and have also prayed to quash and set aside all the consequential proceedings initiated under Criminal Case No.16873 of 2019.

2. The facts in brief are as under;

The applicant No.1 herein is a Company registered under the Companies Act, 1956 and having its Registered Office at “Dashrathvadi, Court Road, Naidad”. It is engaged in the business of production of Grey Cast Iron and Nodular Iron (Ductile Iron) castings weighing from 5 Kgs to 150 Kgs and is also a supplier of fully finished parts to Original Equipment Manufacturers since the year 1956. The factory premises of applicant No.1 Company is located at Nadiad and it employs around 1500 workers. The respondent No.2 herein is a Partnership Firm registered under the provisions of the Indian Partnership Act and is engaged in the business of manufacture of Casting Parts. It also accepts orders and manufacturers casting parts as per requirements of different customers.

2.1 It appears that the parties were into business relations for several years. However, in the year 2014, problem arose in their business relation when a large number of parts that had been supplied by the respondent No.2 to applicant No.1 Company, which, in turn, had supplied it to its clients were rejected and returned to applicant No.1 Company for being defective or of inferior quality. It is the say of the applicants that on account of the defective parts manufactured by the No.2, which were, in turn, supplied by the applicants to the Original Equipment Manufacturers, who were mainly into the Automobile industry, defects were reported in the vehicles in which the parts were used and resultantly, the automobile manufactures had to call back several numbers of vehicles for carrying out necessary repair works. As a result thereof, the applicant No.1 Company had suffered huge financial loss and had sustained a big blow on its reputation and goodwill in the market.

2.2 The respondent No.2 herein filed a summary suit being Special Summary Suit No.23 of 2014 against the applicant No.1 Company before the Court of learned 4th Additional Senior Civil Judge at Rajkot under Order 37 of the Code of Civil Procedure for recovery of an amount of Rs.1,12,26,500/- being the amount payable with interest by the applicant-defendant to the respondent-plaintiff for the work executed and goods delivered as per the order placed by applicant No.1 Company. In the suit proceeding, the applicant No.1 Company preferred an application seeking Leave to Defend; however, the same was rejected. Thereafter, vide judgment and order dated 07.05.2015, the Court of learned 4th Additional Senior Civil Judge at Rajkot decreed Special Summary Suit No.23 of 2014 in favour of the respondent-plaintiff and directed the applicant No.1-Company to pay an amount of Rs.1,12,26,500/- along with 6% interest to the respondent-plaintiff.

2.3 Against the said judgment and decree dated 07.05.2015 passed by the civil Court, the applicant No.1 Company preferred appeal being First Appeal No.1730 of 2015 before this Court along with an application seeking stay of the said judgment and decree. While admitting the First Appeal vide order dated 29.01.2016, the Division Bench of this Court granted interim relief in favour of applicant No.1 Company by staying operation and implementation of the judgment a