Atma Tube Products Limited and Others vs Bhushan Steel and Strips Ltd.

V.S. Aggarwal, J.—This is a petition filed by M/s Atma Tube Products Limited and two others u/s 482 of the Code of Criminal Procedure for quashing of the complaint dated 3.1.1996 u/s 138 read with Section 142 of the Negotiable Instruments Act, 1881 (as amended), read with the Banking Public Financial Institution and Section 420 of the Indian Penal Code. Petitioners further seek quashing of all the subsequent orders passed in the complaint pending in the Court of Chief Judicial Magistrate, Chandigarh.

The relevant facts alleged by the Petitioners are that Petitioner No. 1 is a limited company. It has been purchasing C.R. coils from M/s. Bhushan Steel and Strips Limited. Petitioner No. 1 and M/s. Bhushan Steel and Strips Limited (Respondent No. 1) re-started business transactions from 17.11.1994. The first deal for supply of the material was raised on 17.11.1994. The business transactions were expected to grow. Therefore, Petitioner No. 1 and the Respondent opened a running account in their respective books of accounts. The subsequent purchases were made with regard to which the deals were raised on 15.12.1994 and thereafter on 20.12.1994. Petitioner No. 1 had issued a post dated cheque dated 31.1.1995. It was clarified to the Respondent that Petitioner No. 1 shall make the payment before the said date by way of Pay Order and in case the said payment is not made upto 31.1.1995, the cheque may be presented for encashment. Petitioner No. 1 sent a Pay Order dated 6.12.1994 for a sum of Rs. 1.17.118/-. Similarly a post dated cheque dated 31.1.1995 against bill dated 15.12.1994 had been issued. That, Respondent had been asked that the said cheque be presented for encashment after informing Petitioner No. 1. The Respondent did not inform Petitioner No. 1 and presented the cheque for encashment on 1.2.1995. Since the business transactions were continuing, the said cheque was retimed to the Respondent by the bankers of Petitioner No. 1. No information was received by Petitioner No. 1 about it. The same cheque was presented on 8.2.1995 without informing Petitioner No. 1. Again it was dishonoured. Petitioner No. 1 did not have the information. The Respondent after receiving back the cheque, debited the account on 31.3.1995. At that time Petitioner No. 1 was verbally informed that the cheque had been dishonoured. Petitioner No. 1 asked the Respondent for returning both the cheques against which he issued one cheque for Rs. 2 lacs and another for Rs. 1,44,859/- encashable on 26.4.1995 and 19.5.1995. Both the cheques were honoured by the bankers of Petitioner No. 1.

Petitioner No. 1 issued two more post dated cheques, one for Rs. 2 lacs dated 22.5.1995 and another for Rs. 1,49,792/- dated 29.5.1995. The cheques were honoured by the bankers of Petitioner No. l. Two more cheques for Rs. 2 lacs and Rs. 2,44,899/-dated 8.6.1995 and 12.6.1995 were issued. They were honoured by the bankers. Petitioner No. 1 had received the material against Bill No. 6135 dated 20.12.1994. It was found that material was not according to specifications. Petitioner No. 1 had to get certain work carried out at its own expenses. Rs. 70,560/- were debited and information was given to the Respondent. Two cheques were issued, one for Rs. 1,82,177/- and another for Rs. 2 lacs. It had been explained that debit note had already been sent. The Respondent had been requested not to present the cheque before 21.7.1995. The Respondent presented the cheques on 15.7.1995 and on 19.7.1995 respectively without intimation to the Petitioner. The Petitioner No. 1 prepared a Pay Order of 21.7.1995 and informed the Respondent that cheque should not be presented. Pay Order of Rs. 2 lacs was delivered to the Respondent. The Respondent-company did not return the earlier cheques. Petitioner No. 1 had closed the account of Respondent company because as per its claim the good were not received as per the specifications. Petitioner No. 1 addressed a communication on 31.8.1995 that if the cheques are presented, the payment shall be stopped. Even the Respondent was informed. The Respondent-company still presented the cheques on 3.11.1995. The same was received back with the endorsement that payment had been stopped. It was followed by the notice of the Respondents.

The Respondent had filed a criminal complaint against the Petitioners with respect to the offence punishable u/s 138 of the Negotiable Instruments Act and other relevant provisions mentioned above. By virtue of the present petition, it is claimed that the said provisions are not attracted because there was sufficient amount to clear the debts and in any case the Respondent had already been intimated not to present the cheques and payment had been stopped by instructing the bankers before the cheques were presented. Accordingly, it is prayed that the complaint and the subsequent proceedings before the learned Chief Judicial Magistrate, Chandigarh be quashed.

In the reply filed preliminary objection has been taken that the said pleas can be taken before the Judicial Magistrate at Chandigarh. The assertions of the Petitioner were controverted. It was further denied that any intimation had been sent to the Respondent-company not to present the cheques in question.

Before proceeding further it would be appropriate to have a look of the complaint filed by the Respondent. In the said complaint the Respondent -M/s Bhushan Steel and Strips Ltd. had contended that on behalf of Petitioner No. 1 and for valuable consideration post dated cheques had been issued. On it being presented, the same were dishonoured with the endorsement "payment stopped by the drawer". This has been done with malafide intention. When the Respondent was informed about dishonouring of the cheques, a notice was issued to Petitioner No. 1 but the payment has not been made. On these broad facts, the complaint was filed.

During the course of arguments, learned Counsel for the Petitioners urged that Petitioner No. 1 had the money in the bank. He also contended that there was running account between Petitioner No. 1 and the Respondent. He went on to argue that payment had been stopped before the cheques were presented and the Respondent-company had been informed. According to him, there was no agreement for the payment of the interest. The learned Counsel has taken pains to draw the attention of the court to different documents. I am afraid for purposes of the disposal of the present petition, it becomes unnecessary to scrutinize the details of the same.

The reasons are obvious. Some of the basic facts ire in controversy. The Respondent does not admit that intimation had been sent not to present the cheques to the Bank. It is also disputed that if there was a running account or there was no contract for payment of the interest. When facts are in dispute, in that event this Court will not exercise its inherent powers and indulge in the minute scrutiny of facts. It could be so done only on admitted facts. A similar question came up for consideration before this Court in the case M/s. Garg Forgings & Castings Ltd. v. M/S. Steel Strips Limited 1996 (1) CCC 588 (P&H) : 1996 (1) RCR 799. In paragraph 9 this Court held:

Turning to the case in hand, it is evident that both the pleas sought to be raised by way of the present petition are not pure question of law, but are either questions of facts or mixed questions of law and facts. Both these pleas have been controverted by the Respondent company in its reply. Therefore, these questions can only be decided after taking evidence of the parties by the trial court and not on affidavits by this Court. I do not find any infirmity or illegality either in the complaint-or the accompanying documents or the summoning order to exercise jurisdiction of this Court u/s 482 of the Code of Criminal Procedure.

No different is the position herein. Therefore, this Court would not be expressing any opinion on merits. The parties may lead the evidence on merits and thereafter the trial Court would be competent to look into the said facts and decide the controversy.

Not only that we know from the decision in the case of K.M. Mathew Vs. State of Kerala and another, that is open to the accused to plead before the Magistrate that process against him ought not to have been issued. The Magistrate may drop the proceedings if he is satisfied that there is no offence for which the accused could be tried. The Petitioner in that view of the matter even could file the appropriate application in the trial Court. There is no ground thus to exercise the inherent powers of the Court.

For these reasons, the petition being without merit must fail and is dismissed.