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2025 Supreme(Online)(MP) 3571
HIGH COURT OF MADHYA PRADESH
HON'BLE SHRI JUSTICE SANJEEV S KALGAONKAR, J
M/S Chinar Shipping And Infrastructure (India) Pvt. Ltd. – Appellant
Versus
M/S Laxyoenergy Ltd. – Respondent
MCRC 54607/2021
Shri Vivek Singh Senior Advocate with Shri Neeraj Jain - Advocate and Shri Ravindra Pal Singh Nayyar -Advocate; Shri Rishi Tiwari, learned counsel for the respondent [R-1]
The court upheld that a cheque issued for a legally enforceable debt is actionable under Section 138 of the N.I. Act, emphasizing the presumption of consideration and the burden of proof on the accused.
Headnote:(A) Code of Criminal Procedure, 1973 - Section 482 - Negotiable Instruments Act, 1881 - Section 138 - Quashing of criminal complaint - Petitioners sought to quash a complaint for dishonor of cheque, arguing invalidity due to lack of authorization and closure of account - The court held that the allegations in the complaint prima facie constituted an offence under Section 138, and the quashing of the complaint was unwarranted. (Paras 1, 23)
(B) Presumption of consideration - Under Sections 118 and 139 of the N.I. Act, a cheque is presumed to be issued for consideration unless proven otherwise - The court emphasized that the burden of proof lies on the accused to establish the non-existence of consideration. (Paras 10, 14)
(C) Legal liability - The court reiterated that a cheque issued as security can still be presented for payment if it represents a legally enforceable debt or liability. (Paras 21, 22)
Facts of the case:
The petitioners challenged a complaint filed under Section 138 of the N.I. Act for dishonor of a cheque issued by the accused company, claiming the cheque was invalid due to closure of the account and lack of authorization.
Findings of Court:
The court found sufficient grounds in the complaint to proceed with the case, dismissing the petition to quash the complaint.
Issues: The main issues included the validity of the cheque, the authorization of the signatory, and whether the cheque represented a legally enforceable debt.
Ratio Decidendi: The court ruled that the allegations in the complaint constituted an offence under Section 138, emphasizing the presumption of consideration and the burden on the accused to prove otherwise.
Result: Petition dismissed.
ORDER
This petition under section 482 of Code of Criminal Procedure, 1973 (hereinafter referred to as “Cr.P.C”) is filed by the petitioners for quashing of Criminal Complaint registered as SC NIA no. 503 of 2019 for the offence punishable under section 138 of the Negotiable Instruments Act (hereinafter referred to as “ N.I. Act”) and consequential proceedings, before learned Judicial Magistrate First Class, Ratlam.
2. The exposition of facts, giving rise to present petition, in brief, is as under :
A. M/s Laxyo Energy Ltd filed a complaint for the offence punishable under section 138 of N.I. Act through its Director Jaiprakash Sharma against accused no. 1 / M/s Chinar Shipping and Infrastructure (India) Pvt. Ltd and accused no. 2 Avnindra Kumar Tripathi, Director of M/s Chinar Shipping and Infrastructure (India) Pvt. Ltd stating that the accused Company is a legally constituted and registered company. The commercial agreements were executed on 11/11/2011 and 14/11/2011 between the complainant and the accused with regard to dredging work in the river. In furtherance of the agreement, the complainant had purchased 45% of the share of accused no. 2 in the Company and paid Rs. 87,12,000/-. Jaiprakash Sharma and Yogesh Sharma were appointed as Directors in the Company. Accused no. 2 Avnindra Kumar Tripathi issued a cheque no. 102099 dated 18/12/2018 of Federal Bank Ltd, Mumbai for an amount of Rs. 5,00,00,000/- in favour of the complainant towards the payment of profit share in the Company. After execution of the agreement between the parties, the Company Law Board, Mumbai, vide order dated 13/04/2015, appointed Ms. Manjiri Kakkar as Chairperson authorizing her to issue cheques on behalf of the Company (Accused no. 1). The complainant, vide letter dated 13/12/2018, requested accused no. 2 for issuance of a new cheque duly signed by Competent Authority, otherwise, the impugned cheque dated 18/12/2018 shall be presented for payment at the Bank. Accused no. 2 did not respond to the communication, therefore, the complainant presented the cheque at HDFC Bank, Branch Ratlam. The Bank dishonored the cheque with the intimation that the accused has closed the account. The accused did not respond to the statutory notice for payment of the amount of cheque, therefore, the complaint for the offence punishable under section 138 of N.I. Act was filed.
B. Learned Judicial Magistrate First Class, Raltam, vide order dated 15/07/2019, took cognizance for the offence punishable under section 138 of N.I. Act against both the accused and directed issuance of process to secure their presence.
3. The present petition is filed for quashing the complaint and the impugned summoning order dated 15.07.2019 on following grounds :
A. The registration of impugned complaint against the petitioner is illegal and without application of mind on the facts and circumstances of the case.
B. The impugned cheque was invalid. The petitioner / accused no. 2 was not authorized signatory for the Company at the relevant time.
C. The Company Law Board, vide order dated 13/04/2015 has appointed another person as Authorized Signatory for the purpose of issuing cheques on behalf of the Company. There was no possibility of issuing the cheque by petitioner no. 2 on 18/12/2018 in view of the order of Company Law Board.
D. Learned Judicial Magistrate ignored the fact that name of account holder Company is different from the name of accused / Company as stated in impugned complaint. The name of the accused / Company was changed on 12/07/2012. The impugned cheque was presented after seven years of the agreement dated 11/11/2011. The impugned cheque was issued on the bank account, which was already closed in the year 2015 i.e. four years prior to presentation of impugned cheque in the bank for payment. The closure of the account was within the knowledge of respondent and its Director Jaiprakash Sharma.
On these grounds, it is requested that the Criminal Complaint registered as SC NIANo. 503 of 20
