S. Krishan Sharma vs Hada Developers Pvt. Ltd.

Ajit Bharihoke, J.—S. Krishan Sharma, the Petitioner herein vide this petition u/s 482 Code of Criminal Procedure is seeking quashing of proceedings of Complaint Case No. 4353/2008 in complaint titled as M/s. Hada Developers Pvt. Ltd. v. S. Krishan Sharma, pending in the court of Metropolitan Magistrate, Dwarka, New Delhi.

Briefly stated, facts relevant for disposal of this petition are that Respondent M/s. Hada Developers Pvt. Ltd. filed a complaint u/s 138 read with Section 142 of N.I. Act and Section 420 Indian Penal Code against the Petitioner claiming that in June, 2004, the Petitioner along with M/s. 3rd Dimension of Architecture Pvt. Ltd. and Mr. Nitin Sharma approached the Respondent/complainant in June, 2004 for a short term loan of Rs. 6 lakhs, which was sanctioned and disbursed as per the terms and conditions detailed in loan agreement dated 17th June, 2004, which was signed by the Petitioner, Nitin Sharma and the Respondent/complainant. The amount of loan was to be repaid along with 20% interest per annum in 18 monthly instalments of Rs. 43,333/- from June, 2004 to November, 2005. It is claimed in the complaint that in order to discharge the aforesaid legally enforceable debt, the Petitioner/accused issued a cheque bearing No. 962976 dated 15th December, 2005 for Rs. 7,80,000/- drawn on Punjab National Bank, Sheikh Sarai, New Delhi. The cheque, when presented to the drawee bank through the complainant''s bank, was returned back dishonoured with the remarks "Funds Insufficient". Respondent served the Petitioner with requisite demand notice u/s 138, N.I. Act, calling upon him to pay the cheque amount. The Petitioner, however, failed to comply with the demand notice. This led to filing of the complaint u/s 138, N.I. Act & Section 420 Indian Penal Code, 1860.

Learned Metropolitan Magistrate, after the preliminary enquiry, summoned the Petitioner to undergo trial for the offence punishable u/s 138 N.I. Act. The Petitioner was served with the notice u/s 251 Code of Criminal Procedure to which, he pleaded not guilty.

In order to bring home the guilt of the Petitioner, Respondent has examined CW1 S.K.Bahri, Authorized Representative of Respondent/complainant company.

Learned Sh. Rajesh Manchanda, Advocate appearing for the Petitioner submits that the complaint qua him is liable to be quashed for the reason that he only stood guarantee for repayment of loan advanced to M/s. 3rd Dimension of Architecture Pvt. Ltd. and admittedly, the cheque in question was issued as a security for the aforesaid loan. Expanding on the argument, learned Counsel for the Petitioner has drawn my attention to the copy of the statement of CW1 S.K.Bahri, Authorized Representative of the complainant company, particularly, his cross examination wherein he has, inter alia, stated thus:

Since the accused is a guaranteer of the loan provided to M/s. Third Dimension Architecture Pvt. Ltd. and was also a director in the same, accused is legally liable to pay the cheque amount.....

....

....

It is correct to suggest that the cheque was given as a security by the accused for timely repayment of borrowed loan by the company.

Learned Counsel submits that from the aforesaid, it is apparent that the cheque in question was given as a security for the loan for which the Petitioner stood guarantee, as such, it cannot be said that it was against the existing debt. Accordingly, Section 138, N.I. Act is not attracted. In support of his contention, Petitioner has relied upon the judgment of Supreme Court in M.S. Narayana Menon @ Mani Vs. State of Kerala and Another,

I have considered the submissions made on behalf of the Petitioner and perused the record. From the application, being Crl.M.A. 6180/2010, filed along with the petition of the Petitioner, it is apparent that when the application was moved on 06th May, 2010, the trial of the complaint case was at the stage of recording of statement of the accused. Thus, it is obvious that the trial is almost at its conclusion. The Petitioner is seeking quashing of the complaint mainly on the ground that the cheque in question was given by him to the Respondent as security and in this regard, he is relying upon the cross-examination of CW1 S.K. Bahri, A.R. of the complainant, who admitted the suggestion that the cheque in question was given as a security for timely repayment of loan by the company. The above noted excerpt of statement of CW1 S.K. Bahri cannot be read in isolation. It has to be read in the context of other evidence, including the affidavit of the witness tendered in evidence, copy of which is not placed on record. Entire evidence led by the Petitioner has to be analyzed to come to a conclusion about the guilt of the accused. Otherwise also, Section 139, N.I. Act raises a presumption in favour of holder of the cheque, which provides that unless the contrary is proved, it shall be presumed that the holder of the cheque received the cheque of the nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability. This presumption, however, is rebuttable but the onus to rebut the presumption is on the accused. Admittedly, evidence of the accused is yet to be recorded. Therefore, at this stage, it would be premature to analyse the evidence and quash the proceedings of the complaint only on the basis of one line admission of a suggestion by CW1 S.K.Bahri. The judgment relied upon by the Petitioner is not applicable to this case, because it is yet a question of fact to be determined, whether the cheque in question was given as security and not against the existing debt.

In view of the discussion above, taking into account that the trial of the complaint is almost at the fagend, I am not inclined to invoke inherent power u/s 482 Code of Criminal Procedure to quash the proceedings of the complaint.

Petition is accordingly dismissed.