The main legal point established in the judgment is that allegations in a complaint should be accepted at face value at the pre-trial stage, and the trial court should have the opportunity to weigh the evidence. The court emphasized that quashing proceedings at a pre-trial stage could have grave and irreparable consequences, and that the trial court should have the opportunity to weigh the evidence.

JUDGMENT :

SANJAY KUMAR DWIVEDI, J.

1. Heard Mr. R.S. Mazumdar, learned senior counsel appearing for the petitioners, Ms Nehala Sharmin, learned A.P.P. for the State and Mr. G.K. Sinha, learned counsel appearing for the O.P. No. 2.

2. This criminal miscellaneous petition has been filed for quashing and setting aside the order dated 16.05.2019, passed by the 1st learned Judicial Magistrate, Class, Ranchi, in connection with Complaint Case No. 4724 of 2018, whereby cognizance has been taken against the petitioners, for the offences under Sections 406, 420, 34 of the Indian Penal Code and Section 138 of Negotiable Instruments Act [hereinafter referred to “NI Act”] pending in the Court of learned Judicial Magistrate, 1st Class, Ranchi.

3. The O.P. No. 2 filed a complaint stating therein that the O.P. No. 2 and petitioner No. 1 entered into a Term Sheet dated 22.01.2018.

As per Term Sheet, O.P. No. 2 agreed to invest a sum of Rs. 2,50,00,000/- (rupees two crores and fifty lakhs only) for production of cinematograph film titled “Desi Magic” produced by petitioner No. 1. O.P. N. 2 contributed his investment in accordance with Term Sheet.

The opposite party’s investment was to be repaid within six months with a grace period of 60 days and after such expiry, the petitioner no. 1 did not repay the opposite party’s investment.

On opposite party’s insistence, in month of August, 2018, petitioner no. 1 issued two cheques amounting to Rs. 2,50,00,000/- and Rs. 50,00,000/-. The above mentioned cheques issued by the petitioner no. 1 were returned on account of stop payment. Therefore, the opposite party was deceived, cheated and fraudulently and dishonestly made to execute Term Sheet.

For reasons above, complaint was filed before the learned trial court and the learned trial court recorded opposite party’s statement on 27.02.2019 and 22.04.2019.

4. The learned Court has taken cognizance under Sections 406, 420, 34 of the Indian Penal Code and Section 138 of the NI Act by order dated 16.05.2019.

5. Mr. R.S. Mazumdar, learned senior counsel appearing for the petitioners submits that looking into the complaint, no case under Sections 406, 420, 34 of the Indian Penal Code and Section 138 of the NI Act is made out against the petitioners. He submits that in view of Section 141 of the NI Act, if the Directors are discharging their day to day affairs for the company/firm, then only they are liable to be punished and cognizance has to be taken against them. He further submits that the cheque in question was issued by the petitioner No. 3, as such, no other than that person are liable to be proceeded under the said Sections, as they have not been the drawer of the cheque. To buttress his arguments, he relied in the case of Aparna A. Shah vs. Sheth Developers Private Limited and Another, (2013) 8 SCC 71, wherein the Hon’ble Supreme Court in Para-27 and 28 held as follows:

“27. In the light of the above discussion, we hold that under Section 138 of the Act, it is only the drawer of the cheque who can be prosecuted. In the case on hand, admittedly, the appellant is not a drawer of the cheque and she has not signed the same. A copy of the cheque was brought to our notice, though it contains name of the appellant and her husband, the fact remains that her husband alone put his signature. In addition to the same, a bare reading of the complaint as also the affidavit of examination-in-chief of the complainant and a bare look at the cheque would show that the appellant has not signed the cheque.

28. We also hold that under Section 138 of the N.I. Act, in case of issuance of cheque from joint accounts, a joint account holder cannot be prosecuted unless the cheque has been signed by each and every person who is a joint account holder. The said principle is an exception to Section 141 of the N.I. Act which would have no application in the case on hand. The proceedings filed under Section 138 cannot be used as an arm twisting tactics to recover the amount allegedly due from