Contractual breaches should be litigated in civil courts, not through criminal proceedings, reinforcing jurisdictional relevance and the nature of disputes.

C OMMON O RDER

The petitioners herein are the accused in C.C.Nos.30 to 34 of 2020 and they have preferred these Criminal Original Petitions seeking to quash the said complaints pending on the file of XVIII Metropolitan Magistrate, Saidapet, Chennai, which were filed by the respondent/defacto complainant by invoking Sec.200 r/w Sec.190(a) of Cr.P.C. and Sec.25 of Payment and Settlement System Act, 2007 read with the provisions contained in Chapter XVIII of the Negotiable Instruments Act, 1881.

2. Heard both sides.

3. Brief facts of the case is as follows :-

The 1st petitioner/A1 was incorporated on 7th September 1994 as a closely held public limited company under the Companies Act, 1956 and it is a non-banking financial company with due registration from Reserve Bank of India. The 1st petitioner is represented by its authorised Director, the 2nd petitioner/A2. The 1st petitioner/A1 company was set up to provide financial support to the aspirations of entrepreneurs since the year 1994 and availed NBFC license in the year of 2008. Since then, the 1st petitioner grown up and had evolved into one of the finest integrated financial solutions provided to SME's/MSME's in the country. While being so, during January-February 2019, the petitioners were approached by the respondent stating that it has huge finances at its disposal and they were engaged in financing small NBFCs to support and grow their businesses.

4. According to the petitioners, the respondent collected all the relevant data and important information regarding 1st petitioner/A1 company. After verifying the same, they have issued term sheet approving upto Rs.20 crores credit facility on 14.03.2019. Thereafter, certain inter communication between them and the respondent insisted Rs.20 crores charge in favour of them to be registered with Registrar of Companies through MCA Portal and for the repayment of the said amount in instalments, NACH Mandate known as BELLTL052019 was created by the 1st petitioner herein with the condition that the same is valid until cancelled. The respondent also accepted the conditional NACH mandate and agreed to comply with the terms of NACH mandate. But contrary to the terms, the respondent in total breach of its promise and contractual obligation from the first day and had only disbursed a sum of Rs.1 crore on 17.05.2019. Accordingly, totally they have paid a sum of Rs.6,00,000/- only.

5. The contention of petitioners is that when the respondent did not disburse the requested amount when required by the 1st petitioner company, they have sent an email informing that there are no funds available with it to disburse in the month of June 2019, which would prove that the respondent fraudulently misrepresented in respect of its financial wherewithal and ability to lend funds to 1st petitioner company as per agreed terms. In pursuance of the same, the respondent caused substantial loss to the 1st petitioner company. In the meanwhile, the first EMI in relation to the amounts disbursed so far by the respondent, the amount got due, which was duly honoured and paid by the 1st petitioner company to the respondent on the respective dates promptly till Judge 2019, despite gross breach on the part of respondent and its total failure to comply with contractual terms. Thereafter, inspite of all the gross default and persistent breach on the part of respondent, the 1st petitioner company duly honoured its commitment of repayment of monthly EMI and paid further EMI for the month of July 2019. So, despite of agreeing to disburse a total sum of Rs.20 crores, the respondent kept delaying the disbursement dates and they have totally breached and violated the contractual terms as agreed upon in he Facility Agreement between the parties and disbursed only a sum totally Rs.6,00,000/- as against Rs.20 crores. Subsequently, the 1st petitioner company had terminated the Facility Agreement and all other documents including NACH Mandate and simultaneously, the 2nd and 3rd petiti