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IN THE HIGH COURT OF DELHI AT NEW DELHI
R.K. Gauba, J.
Ritu Jain - Appellant
Vs.
State Through Standing Counsel And Another - Respondents
Criminal Miscelalaneous Case No. 555 of 2016, Criminal Miscellaneous Appeal No. 2315 of 2016
Decided On : 12-03-2019
Payment and Settlement Systems Act - Criminal Complaint - Section 25, Section 27 - The judgment discusses the allegations of dishonour of electronic funds transfer under Section 25 of the Payment and Settlement Systems Act, 2007 and the liability of the proprietor under Section 27. It highlights the legal provisions and their interpretations, emphasizing the proprietor's responsibility for the conduct of business and the presumption of guilt in electronic funds transfer dishonour cases.
Fact of the Case:
The petitioner, proprietor of M/s Shrey Overseas, sought quashing of criminal proceedings under Section 25 of the Payment and Settlement Systems Act, 2007. The complainant alleged dishonour of electronic funds transfer by the petitioner's firm and sought prosecution.
Finding of the Court:
The court found that the petitioner, as the proprietor, was responsible for the conduct of the business and could not escape prosecution under Section 25. The court also noted the petitioner's evasion of the legal process over four years.
Issues: The issues revolved around the liability of the petitioner for dishonour of electronic funds transfer and the petitioner's evasion of legal proceedings.
Ratio Decidendi: The court held that the petitioner, as the proprietor, was liable for the offence under Section 25 and that her evasion of legal process amounted to an abuse of the process of law.
Final Decision: The petition and application were dismissed with costs of Rs.50,000/- to be deposited with the Delhi High Court Legal Services Authority within a week.
R.K. Gauba, J.
The petitioner is described as the proprietor of a firm called M/s Shrey Overseas. On the criminal complaint (CC No. 1047/2015) of the second respondent, she and her said firm (shown in the array as ond and first accused respectively) were summoned by the Metropolitan Magistrate by order dated 19.05.2015, on the accusations of offence punishable under Section 25 read with Section 27 of the Payment and Settlement Systems Act, 2007. It appears that in the said criminal complaint, the second respondent (the complainant) had, inter alia, mentioned the name of one Manish Kumar Jain (shown in the array as third accused), his description being that of a partner of M/s Shrey Overseas. The Metropolitan magistrate, however, declined to issue any process against the said person noting that as per the evidence adduced in the preliminary inquiry (on affidavit), the case was essentially against the proprietory firm of the petitioner herein.
2. The petition at hand was filed seeking quashing of the proceedings in the said criminal complaint case, invoking the inherent powers and jurisdiction of this court under Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.). The petition is resisted by the second respondent (complainant) by a formal reply to which the petitioner has also filed a rejoinder.
3. The allegations set out in the criminal complaint and the evidence led in support at the preliminary inquiry reveal that the complainant is engaged in the business of trading in export and import licenses. It had supplied licenses to the proprietory concern of the petitioner, they being Focus Product Scheme (FPS) licence no. 0519014472 dated 08.12.2014, Focus Market Scheme (FMS) licence no. 0519014755 dated 10.12.2014 and FPS no. 0519014752 dated 10.12.2014, the former two for a total consideration of Rs.14,41,969/- and the last one for a consideration of Rs.4,15,177/-, after discount and taxes, vide invoices dated 22.12.2014 and 02.01.2015. It appears that against the first said invoice dated 22.12.2014, cheque no. 000316 dated 06.01.2015 was issued in the sum of Rs.14,41,960/-, with instructions to the bank "yourself for RTGS'' and handed over to the complainant, the intention being for transfer of funds by RTGS. Similarly, cheque no.000633 dated 17.01.2015 for Rs.4,15,177/- with instructions to the bank "yourself for RTGSwas handed over to the complainant, the instruction being for transfer of such funds by RTGS, both against the two above-mentioned invoices.
4. The complainant's case is that the cheques were issued by the petitioner and handed over along with separate applications dated 06.01.2015 and 17.01.2015 for RTGS transfer of funds. The two instruments were statedly presented at the concerned bank where the account was held in the name of the proprietory concern of the petitioner, but electronic funds transfers could not be executed, the same being dishonoured on 09.03.2015 since the petitioner had issued instructions for "stop payment". The complainant has claimed that a statutory notice of demand was sent on 28.03.2015, but no payment was made within the requisite period, this according to the complainant, constituting offence under Section 25 of Payment and Settlement Systems Act, 2007.
5. The offence under Section 25 of Payment and Settlement Systems Act, 2007 is defined thus:-
''25. Dishonour of electronic funds transfer for insufficiency, etc., of funds in the account.-
1. Where an electronic funds transfer initiated by a person from an account maintained by him cannot be executed on the ground that the amount of money standing to the credit of that account is insufficient to honour the transfer instruction or that it exceeds the amount arranged to be paid from that account by an agreement made with a bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may extend to two years, or wi
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