Sushil Tayal and another vs State of Uttarakhand and another

Hon''ble Servesh Kumar Gupta, J.—By means of this petition moved u/s 482 Cr.P.C., a prayer has been advanced to quash the charge sheet dated 06.09.2009 giving rise to the criminal case no. 6080 of 2009 titled as State Vs. Sushil Tayal and another and order of cognizance dated 08.10.2009 passed by Additional Chief Judicial Magistrate, Dehradun asking the applicants Sushil Tayal and his associate Naveet Tayal to stand trial for the offence u/s 420, 406 IPC, the case pertain to crime no. 24 of 2009 Police Station Cantt., Dehradun, District Dehradun.

Having heard pros and cons of the matter, it transpires that pivot of the controversy between the parties is issuance of cheque of Rs. 75,00,000/- dated 12.04.2008 drawn from Punjab National Bank, Dehradun issued by respondent no. 2 V.K. Gupta to the applicants, who are partners of Tayal and Company, having its head office at New Delhi and running its branch office at Mohali, Punjab. This cheque was issued by V.K. Gupta in consideration for supplying a particular technology regarding manufacturing of Railway Spare Parts, on the basis of tripartite Memorandum of Understanding between the two with CHINA based research institute. This Memorandum of Understanding is annexure no. 2 to the petition. Anyhow, V.K. Gupta, who runs his business at Dehradun under the name and style of M/s G.B. Springs Pvt. Ltd. could not secure the supply of technology (as alleged) from Tayal and Company, so he issued instructions to the Bank for stopping the payment. Accordingly, the Bank dishonoured the cheque with memo dated 16.04.2008. Notice, as envisaged u/s 138 (b) of the Negotiable Instruments Act, 1881 (hereafter called as ''Act'') issued by Tayal and Company on 01.05.2008 to V.K. Gupta, reply whereof was sent on 15.05.2008 by V.K. Gupta on behalf of M/s G.B. Springs Pvt. Ltd.

No payment was made by V.K. Gupta to Tayal and Company, so criminal complaint under the Act was filed on 14.06.2008 and the learned Magistrate, having gone through the contents of complaint, statement of complainant nay the documents filed therewith, took cognizance in the matter on 13.08.2008 at Mohali, Punjab against V.K. Gupta. This order of cognizance was challenged in Punjab and Haryana High Court bearing Criminal Misc. Petition No. M 16349 / 10 but of late stay granted by Punjab and Haryana High Court, initially, in that case was vacated with a direction to proceed ahead in the matter subject to the injunction of pronouncement of final judgment.

Next scenario qua the controversy is lodging of First Information Report by V.K. Gupta in Police Station Cantt. Dehraun on 18.02.2009 against the applicants, who are partners of the Tayal and Company for the offence u/s 420, 406 IPC. In brief, the contents of the First Information Report are that on 11.01.2008, Sushil Tayal and Naveet Tayal (applicants in the present petition) came to the office of informant V.K. Gupta and allured him to be a partner in their business. On the advancement of business terms, V.K. Gupta issued a post dated cheque of Rs. 75,00,000/- with Rs. 5,00,000/- cash. Terms and conditions of this business could not be complied, as per understanding between the parties, so First Information Report was lodged by V.K. Gupta against the applicants. Police (Dehradun) after investigation submitted the charge sheet for the offence u/s 420, 406 IPC, which is under challenge by way of this petition.

Learned counsel for the applicants has advanced erudite arguments and relied upon several judgments of the Hon''ble Apex Court. Out of these judgments, it would suffice to mention two. One is Mahindra and Mahindra Financial Services Limited and another Vs. Rajiv Dubey reported in 2009 (1) SCC 706. The facts of the case were almost identical. In the case (supra) the Magistrate took cognizance for the offence u/s 420, 406 IPC against the appellants in the complaint filed by respondent. When High Court declined to interfere with the order of cognizance u/s 482 Cr.P.C., then payee of the cheque challenged the cognizance order of the Magistrate by way of SLP before the Hon''ble Apex Court. The Hon''ble Apex Court was of the view that such complaint was nothing but abuse of process of law being a counter blast to the proceedings initiated by the appellants u/s 138 of the Act against the respondent and such a complaint initiated with ulterior motive is amounted to abuse of process of law, hence, relying upon the precedent of State of Haryana and others Vs. Ch. Bhajan Lal and others, , reiterating that where a criminal proceeding is manifestly attended with mala fide and / or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge, the Hon''ble Apex Court held that proceedings initiated before the trial court should be quashed. Another case is of M/s Eicher Tractor Ltd. and others Vs. Harihar Singh and another reported in 2009 (1) JCC 260. It was almost a similar case. In this case also, High Court refused to quash the proceedings u/s 482 Cr.P.C. initiated against the payee of cheque, which was M/s Eicher Tractor Ltd. Then M/s Eicher Ltd. knocked the doors of Hon''ble Apex Court. The Court, while adjudicating the case, has clarified the magnificent and plenary powers of the High Court u/s 482 Cr.P.C. and found the case to be fit one, where High Court should have exercised its powers in order to prevent abuse of process of law. It was held that in order to pre-empt the impending proceeding initiated u/s 138 of the Act, drawer of the cheque launched prosecution u/s 468, 471, 420 IPC.

Learned counsel for the applicants drawn attention of this Court towards Section 118 enacted under Chapter XIII. Provision (a) of Section 118 of the Act is relevant and reads thus:

Presumptions as to negotiable instruments- Until the contrary is proved, the following presumptions shall be made:-

a. of consideration; that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

Undisputedly, the cheque amounting to Rs. 75,00,000/- was issued by V.K. Gupta, working as Director of M/s G.B. Springs Pvt. Ltd. to the applicants, who were Managing partner of their own company. Under the Memorandum of Understanding, which was nothing but a tripartite agreement in collaboration with CHINA based company impugned cheque was issued. When cheque was dishonoured, proceeding under the Act was commenced and the order of cognizance dated 13.08.2008 was passed, while First Information Report was lodged by V.K. Gupta after six months of the order of cognizance. It can be discerned that V.K Gupta lodged the impugned First Information Report when he received the summons of the case initiated by applicants under the Act. Fortiori, incident which has been narrated by V.K. Gupta is of dated 11.01.2008 and he got the payment stopped prior to 16.04.2008. It can be inferred that cheating (if any) had happened with V.K. Gupta then there was no reason for him to abstain from initiating the criminal action soon after. He did not do so but he lodged the First Information Report on 18.02.2009 i.e. almost after 10 - 11 months. When he had come to know cheating (if any) committed by applicants with him then he has no reason to offer for this excessive belated lodging of First Information Report. This all is enough to draw a conclusion that lodging of First Information Report by V.K. Gupta is nothing but to wreaking of vengeance towards the applicants and such vengeance cannot be allowed to take turn of initiating criminal case by way of lodging First Information Report. Investigating Officer certainly has not understood the depth of intricacies involved in the matter and spirit of the Penal Section 420, 406 IPC while submitting the charge sheet on the basis of which applicants cannot be left to face rigmarole trial. This petition has merits and deserves to be allowed. The petition is, accordingly, allowed. Proceeding of criminal case no. 6080 of 2009 pending in the court of Additional Chief Judicial Magistrate, Dehradun is hereby quashed with all consequences.