PUNJAB & HARYANA HIGH COURT
Harmohinder Kaur Sandhu, J.
M M Rajagaria
Versus
State Of Punjab
Decided On : NOVEMBER 3, 1993
NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 138 - DISHONOUR OF CHEQUE - QUASHING OF COMPLAINT - CONDITIONS - INGREDIENTS OF OFFENCE - INHERENT JURISDICTION OF COURT.
Fact of the Case:
Petitioners, directors of a company, issued cheques to complainants for goods purchased. Cheques were dishonoured due to insufficient funds. Petitioners claimed the company was a sick industrial unit and they were illegally detained and forced to sign the cheques. They also claimed one petitioner had resigned as director before the cheques were issued.
Finding of the Court:
The court held that the allegations in the complaint, if accepted, constituted an offence under Section 138 of the Negotiable Instruments Act. The court found no merit in the petitioners' arguments and dismissed the petitions.
Issues: Whether the complaint and summoning order should be quashed due to the company being a sick industrial unit and the petitioners being illegally detained and forced to sign the cheques.
Ratio Decidendi: The court held that the ingredients of the offence under Section 138 of the Negotiable Instruments Act were satisfied in the complaint. The court also held that it could only exercise its inherent jurisdiction to quash a complaint if the allegations did not constitute an offence or if it was necessary to prevent abuse of process or secure the ends of justice. The court found that none of these conditions were met in this case.
Final Decision: The court dismissed the petitions and held that the petitioners could raise their pleas at the appropriate stage of the trial.
, J.
1. - This judgment will also dispose of Criminal misc. Nos.5291-M of 1992, 5293-M of 1992, 5295-M of 1992, 5297-M of 1992, 5299-M of 1992, 5301-M of 1992, 5305-M of 1992, 5307-M of 1992, 5309-M of 1992, 5311-M of 1992, 5313-M of 1992, 5315-M of 1992, 5317-M of 1992, 5319-M of 1992, 4248-M of 1992 and 5303-M of 1992, as the same legal question is involved in all these petitions filed by the same petitioners against different respondents.
2. M. M. RAJAGARIA has filed this petition under Sec.482 of the Code of Criminal procedure for quashing the complaint Annexure P/5 and the summoning order dated 8.1.1992 and further proceedings initiated against him and other accused in the Court of Sub-Divisional Judicial Magistrate, Malerkotla for an offence under Sec.138 read with Sec.142 of the Negotiable Instruments Act, 1881 (the Act for short ). Criminal misc. No.4248 of 1992 was filed by Shri V. K. Rajagaria for quashing of the same complaint and the summoning order. The rest of the petitions have been filed jointly by both these petitioners.
3. The facts of the case necessary for the disposal of these petitions as set up in the various complaints filed against the petitioners are that M/s Vinod Paper mills Limited, Industrial Focal Point, Malerkotla, carried on the business of manufacturing paper. The petitioners as well as Vijay Mehta and S. K. Chopra, accused nos.2 to 5 in all the complaints were in charge of and responsible for the conduct of the business of the company i. e. M/s Vinod Paper Mills. They used to purchase material from the various complainants and amount was outstanding against the company. In consideration of the price of the goods various cheques were issued in favour of the complainants for different amounts. The complainants presented the cheques in the Punjab National Bank, Branch Malerkotla, for the realisation of the amount of the cheques, but the same were dishonoured and returned unpaid with the Bank memo refer to drawer on account of insufficient funds in the accounts of the accused company. Intimation was sent to the various complainants by the Punjab National Bank, Branch Malerkotla. Thereafter notices were issued to the petitioners and other accused and a demand was made for payment of the amount within 15 days from the date of the receipt of the notice. The amount was not paid so the various complaints were filed against the company and the persons in charge of the business of the company. After preliminary evidence was recorded the petitioners were summoned to face trial for an offence under Sec.138 of the Act.
4. The petitioners prayed for quashing of the complaint as well as the summoning order on the ground that the company had become a sick industrial unit and was registered with the Board for Industrial and Financial Re- construction under Sec.18 (3) of the Sick Industrial Companies (Special Provisions)Act, 1985. The efforts to put the company on wheels of recovery failed due to the problem created by the workers and also due to the lack of financial resources and ultimately a lock-out was declared at the factory of the company. Shri Vijay Mehta and Shri Vivek Bhargava were, thus, not permitted to issue any cheque. But in the month of April and May, 1991 the workers and local creditors illegally and coercibly detained the two managers in the factory for about 72 hours. They were physically tortured and were made to sign the cheques under threat. A letter was sent to Chief Manager, Punjab national Bank, Malerkotla informing him that certain cheques had been obtained by the creditors and their payment should not be made. The payment was, thus, not made because it was stopped when the cheques were presented for encashment. When the cheques were dishonoured on account of stoppage of payment, no offence under Sec.138 of the Act was made out. The cheques were detained illegally by detaining and torturing the managers. The managers who issued the cheques were no longer the employees of the co
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.