The judgment established the importance of investigating prima facie allegations of cognizable offences, the distinction between offences under NI Act and IPC, and the relevance of mens rea in determining the sustainability of complaints under IPC.

JUDGMENT

(Prayer: Criminal Original Petition filed under Section 482 of Cr.P.C. praying to call for the records in Crime No.112 of 2019 pending on the file of the first respondent and quash the same.)

1. This petition has been filed to quash the FIR in Crime No.112 of 2019 pending on the file of the first respondent, registered for the offences under Sections 406 & 420 of I.P.C., as against the petitioners.

2. Totally there are two accused and the petitioners are arrayed as A1 & A2. The allegations as against the petitioners are that the first petitioner is the Managing Trustee of St.Johns Rajakumar Education & Research Trust and the second petitioner is the wife of the first petitioner. The second respondent/ defacto complainant was introduced to the first accused by one Jayakrishna for the purpose of construction work in the year 2014. The construction work of Auditorium for their school was assigned to the second respondent herein and also they alloted renovation work in the school. During the completion of the project another construction work was assigned to the defacto complainant by entering into a Memorandum of agreement dated 07.12.2006, in which approximate cost of construction is fixed as Rs.45 crores. On the date of agreement an advance amount of Rs.50 lakhs has been paid. Further alleged that a portion of construction was completed and handed over the building to the petitioners along with bills to the tune of Rs.31,10,74,414/-. At several stages, part of the amount paid by the petitioners and for the balance amount, the first petitioner issued a cheque for Rs.11,39,38,813/-. When the said cheque was presented for collection, it was returned for the reason "Account blocked". Therefore, the statutory notice was issued under Section 138 of Negotiable Instruments Act (hereinafter referred to as NI Act) on 18.12.2018 to the first petitioner and the lodged the present complaint by the second respondent.

3. The learned counsel appearing for the petitioners submitted that no offence is attracted as against the petitioners since the entire transactions are business transaction and there is absolutely no ingredients to attract the offence under Sections 406 and 420 of IPC. As per the memorandum of agreement entered between the petitioners and the defacto complainant, there was an arbitration clause and as per the clause any dispute, both the parties have to appoint an Arbitrator to resolve the issue. In fact the second respondent also initiated proceedings under Section 138 of Negotiable Instruments Act in C.C.No.664 of 2019 and the same is pending on the file of the learned Metropolitan Magistrate (Fast Track Court No.3), Saidapet, Chennai. Even according to the defacto complainant, there is a balance payment payable by the petitioners to the second respondent. He further vehemently contended that on perusal of complaint, that there is absolutely no intention of the petitioners to cheat the second respondent as such, no offence is made out as against the petitioners and sought for quashment of the FIR in Crime No.112 of 2019 on the file of the first respondent. In support of his contention, he also relied upon the judgment of the Hon'ble Supreme Court of India and of this Court as follows :-

i. Crl.O.P.No.16109 of 2010 dated 15.10.2014 - Jayaprakash Vs. The State rep by the Inspector of Police and anr.

ii. Crl.O.P.No.20776 of 2014 dated 27.10.2014 - K.Jayakumar Vs. The State rep by the Inspector of Police and anr.

iii. 2019 AIR (SC) 1538 - Satishchandra Ratanlal Shah Vs. State of Gujarat and anr.

4. Per contra, the learned Senior Counsel appearing for the second respondent submitted that there are specific allegations as against the petitioners to attract the offences under Sections 406 and 420 of IPC. Even the case pending for the offence under Section 138 of NI Act, it is not impediment for taking action for the offences under Sections 406 and 420 of IPC. As per the agreement, after completion of project, the petitioners ought