2018 Supreme(P&H) 1854

IN THE HIGH COURT OF PUNJAB AND HARYANA
RAJBIR SEHRAWAT, J.
SAZID KHAN – Appellant
Versus
STATE OF HARYANA – Respondent
CRM-M No. 31873 of 2018
Decided on : 27-07-2018

IMPORTANT POINT
Dishonour of cheque – Fraud – FIR u/s 420 and 406 IPC and offence u/s 138 NI Act are simultaneously maintainable where liability incurred by the accused of offence u/s 138 of N.I. Act results from fraud, misrepresentation or through a conspiracy committed at prior stage of sequence or facts.

Headnote:(A) Negotiable Instruments Act, 1881, S.138 – Dishonour of Cheque – Fraud – FIR u/s 420 and 406 IPC and prosecution for offence u/s 138 NI Act are simultaneously maintainable – Held;

       (i) there can definitely be situations where liability incurred by the accused of offence under Section 138 of the Negotiable Instruments Act results from fraud, misrepresentation or through a conspiracy committed at prior stage of sequence or facts – In that situation, by no means it can be said that an accused cannot be prosecuted for the fraud committed by him, conspiracy in which it is involved or the misrepresentation from which he has benefitted;

       (ii) FIR u/s 420 and 406 IPC and offence u/s 138 NI Act are not mutually exclusive – Therefore, simply because a complaint is filed under Section 138 of the Negotiable Instruments Act, does not mean that under any circumstances, a person cannot be prosecuted under Sections 420, 406 IPC – Indian Penal Code, 1860, S.420 & S.406. (Para 7)

       (B) Negotiable Instruments Act, 1881, S.138 – Dishonour of Cheque – Fraud – FIR u/s 420 and 406 IPC and prosecution for offence u/s 138 NI Act are simultaneously maintainable – Even in case where the legally enforceable liability is incurred by a person under a commercial agreement, which was procured by such person by coercion, undue influence fraud or misrepresentation, the liability can still be enforced by the person upon whom fraud was played, as prescribed under Section 19 and 19-A of the Indian Contract Act – Such agreement is voidable only at the option of the person who has been cheated and not void altogether or voidable at the option of the person who has cheated – So despite being based on fraud, such liability remains legal and valid against the person who had played the fraud – In that situation, a person would definitely be liable for the offence under Sections 420 and 406 IPC as well as u/s 138 N.I. Act – Indian Penal Code, 1860, S.420 & S.406.

       Another aspect which clarifies this situation is that in a trial only under Section 138 of the Negotiable Instruments Act, Court cannot convict a person for fraud or misappropriation although the liability may be arising from entrustment of the amount itself as well. The limited scope of trial and punishment for Section 138 of the Negotiable Instruments Act is the punishment for dishonor of the cheque. If the argument of learned counsel for the petitioner is accepted then the offence under Section 406 or 120-B IPC or for that matter Section 420 IPC are liable to go unpunished, despite the same having been committed in the open glare of law.

       (C) Negotiable Instruments Act, 1881, S.138 – Dishonour of Cheque – Fraud – FIR u/s 420 and 406 IPC and offence u/s 138 NI Act are simultaneously maintainable where liability incurred by the accused of offence u/s 138 of N.I. Act results from fraud, misrepresentation or through a conspiracy committed at prior stage of sequence or facts – Indian Penal Code, 1860, S.420 & S.406. (Para 7)

       (D) Negotiable Instruments Act, 1881, S.138 – Dishonour of Cheque – Fraud – Criminal Breach of trust – Complaint u/s 138 N.I. Act and S.406 & S.420 IPC held to be simultaneously maintainable – 'H' accused had assured the complainant to get him the distributorship of a big company and took Rs. 50 lakhs for that-'H' neither returned money nor got the distributorship as promised – Complaint against 'H' was filed u/s 420 and 406 IPC – In the meantime 'H' on his representation got the work contract/orders by different firms to complainant – Present petitioner who took goods from complainant and issued cheque towards discharge of liability which got dishonored due to insufficient funds – For which complainant filed complaint u/s 138 N.I. Act – During investigation of FIR u/s 406 & S.420 IPC it was prima facie found by police that present petitioner is also part of conspiracy and fraud played by accused 'H' – Therefore, both the offences are distinct and separate – In present case both the complainants are maintainable – Plea of double jeopardy is not available to present petitioner – Complaint u/s 406 & 420 IPC not quashed – Indian Penal Code, 1860, S.420 & S.406.

       (E) Criminal Jurisprudence – Cause of Action – There is no concept of 'same cause of action' or for that matter, of 'cause of action' in the criminal jurisprudence – What is punishable in criminal law is the conduct of an accused or the consequences arising from such conduct as reflected in a fact or set of facts – If such two distinct facts or set of facts or the consequences thereof constitute more than one offences then the accused is liable to be prosecuted and punished for all such offences, whether the offences are punishable under the general penal law as contained in IPC only or the same are punishable under general criminal and special criminal law separately. (Para 6)

       (F) Criminal Jurisprudence – Cause of action – It is settled law that mere fact that a conduct is punishable under special law is not the ground to hold that such conduct cannot be punished under general criminal law. (Para 6)