Present: Mr.Kiran Kumar Advocate Vs. State of Punjab and Another - Court Judgment

SooperKanoon Citationsooperkanoon.com/1157874
CourtPunjab and Haryana High Court
Decided OnJul-14-2014
AppellantPresent: Mr.Kiran Kumar Advocate
RespondentState of Punjab and Another
Excerpt:
crm-m-7282-2013 1 in the punjab & haryana high court at chandigarh crm-m-7282-2013 date of decision : 14.07.2014 gurbachan juneja and others ..petitioners versus state of punjab and another ..respondents coram: hon'ble mrs.justice rekha mittal present: mr.kiran kumar, advocate for the petitioners.mr.amarinder singh klar, aag, punjab. rekha mittal, j. the petitioners.directors of krishna engineering private limited, focal point, jalandhar (hereinafter referred to as 'company') have invoked the jurisdiction of this court under section 482 of the code of criminal procedure (in short 'the cr.p.c.') for quashing fir no.143 dated 02.08.2012 punishable under section 420 of the indian penal code (in short 'ipc') registered at police station division no.8, jalandhar and proceedings emanating therefrom. the brief backdrop of this case is that the company obtained an interest free loan of rs.13,45,700/- from the department of industries, state of punjab. the loan was repayable in three equal installments on 25.06.1996, 25.06.1997 and 25.06.1998. the company issued cheque bearing no.001242 dated 30.06.2012 for an amount of rs.1 lac in the name of general manager, district industrial centre to the district collector, davinder kumar 2014.07.24 17:24 i attest to the accuracy and integrity of this document crm-m-7282-2013 2 jalandhar which got dishonoured with remarks 'opening balance insufficient'. the cheque was again presented but returned with the same remarks. counsel for the petitioners contends that the company was already under the control of ministry of finance through board for industrial and financial reconstruction (bifr).therefore, the company and the petitioners cannot be held liable for non-payment of outstanding amount or dishonour of cheque. it is further submitted that if the petitioners and the company has failed to repay the loan amount, the same gives rise to civil/ contractual liability and the facts do not entail criminal liability. it is further argued that petitioners no.2 & 3 are not the signatories to the cheque in dispute nor there is any material on record to prove that they are incharge of and responsible for the conduct of business of the company to make them vicariously liable for an offence committed by the company. the last submission made by counsel is that on 01.04.2012, the amount outstanding against the company was rs.9,67,802/- only. the company made certain payments to the department by way of cheques and demand drafts and in this manner, the liability of the company has been reduced to rs.5,67,802/- after payment of rs.4 lacs. counsel for the respondent, on the other hand, contends that the company and its directors failed to make any payment on the dates fixed for repayment of the loan amount in three equal installments in the year 1996, 1997 and 1998. the company issued eleven cheques, detailed in para 6 of the reply by way of affidavit of bhinder singh, general manager, district industries centre, jalandhar on behalf of respondent no.2 and the firs.four davinder kumar 2014.07.24 17:24 i attest to the accuracy and integrity of this document crm-m-7282-2013 3 cheques in the year 2006 got dishonoured with the remarks 'exceeds arrangement' and the remaining seven cheques issued in the year 2012 and 2013 got dishonoured with the remarks 'opening balance insufficient'. in the year 2009, the department announced a scheme known as 'one time settlement scheme' for defaulters to pay interest free loan on payment of principal amount in lump sum by the stipulated date in order to get waiver of penal interest. the petitioner issued cheque in the sum of rs.1 lac in favour of the respondent which also got dishonoured. it is further argued that liability of interest free loan towards principal is rs.5,97,782/- and the company is liable to pay interest amounting to rs.32,07,581/- being outstanding as on 31.08.2013. it is argued with vehemence that keeping in view the conduct of the company and its directors that a large number of cheques were issued from time to time but the same got dishonoured on presentation to the bank, it clearly indicates dishonest intention of the petitioner since the inception of transaction constituting offence punishable under section 420 ipc. it is further argued that the petitioners cannot escape their criminal liability by taking the plea that some proceedings are pending before bifr. in addition, it is submitted that the issue regarding intention of the petitioner being deceitful can be decided only during cours.of trial by leading evidence, therefore, the petitioners are not entitled to indulgence of this court seeking quashing of criminal proceedings who are guilty of causing loss to the state exchequer. i have heard counsel for the parties and perused the case file. the petitioners have not disputed that the company failed to make any payment to the department of industries on the dates fixed for davinder kumar 2014.07.24 17:24 i attest to the accuracy and integrity of this document crm-m-7282-2013 4 payment of three installments in the year 1996, 1997 and 1998. the petitioners have also not controverted the plea of respondent no.2 that 11 cheques, detailed in para 6 of the reply issued by the company from the year 2006 to 2013 got dishonoured on presentation to the bank with the remarks 'exceeds arrangement' / 'opening balance insufficient'. the petitioners failed to avail benefit of one time settlement scheme floated by the state in the year 2009, according to which the petitioners could discharge their liability by payment of outstanding principal amount only. the hon'ble supreme court of india in state of haryana and others versus ch.bhajan lal and others.air1992supreme court 604 quoted certain categories of cases by way of illustration wherein extra- ordinary power under article 226 or the inherent power under section 482 of the cr.p.c.can be exercised either to prevent abuse of process of any court or otherwise to secure the ends of justice with the observation that it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. however, the court in para 109 of the judgment has given a note of caution to exercise this power very sparingly and with circumspection and that too in the rarest of rare cases. a relevant extract from para 109 reads as follows:- “109. we also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the davinder kumar reliability or genuineness or otherwise of the allegations 2014.07.24 17:24 i attest to the accuracy and integrity of this document crm-m-7282-2013 5 made in the f.i.r.or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice.”. when the facts and circumstances of the present case are examined in the light of aforesaid observations, i do not think it to be a fit case wherein the petitioners deserve indulgence of this court in exercise of extra-ordinary jurisdiction under section 482 cr.p.c.for the aforesaid reasons, the petition is dismissed. however, nothing stated in this order shall prejudice the rights of the petitioners to raise all available pleas before the trial court. (rekha mittal) judge july 14, 2014. davinder kumar davinder kumar 2014.07.24 17:24 i attest to the accuracy and integrity of this document
Judgment:

CRM-M-7282-2013 1 IN THE PUNJAB & HARYANA HIGH COURT AT CHANDIGARH CRM-M-7282-2013 Date of decision : 14.07.2014 Gurbachan Juneja and others ..Petitioners Versus State of Punjab and another ..Respondents CORAM: HON'BLE MRS.JUSTICE REKHA MITTAL Present: Mr.Kiran Kumar, Advocate for the petitioneRs.Mr.Amarinder Singh Klar, AAG, Punjab.

REKHA MITTAL, J.

The petitioneRs.directors of Krishna Engineering Private Limited, Focal Point, Jalandhar (hereinafter referred to as 'Company') have invoked the jurisdiction of this Court under Section 482 of the Code of Criminal Procedure (in short 'the Cr.P.C.') for quashing FIR No.143 dated 02.08.2012 punishable under Section 420 of the Indian Penal Code (in short 'IPC') registered at Police Station Division No.8, Jalandhar and proceedings emanating therefrom.

The brief backdrop of this case is that the company obtained an interest free loan of Rs.13,45,700/- from the Department of Industries, State of Punjab.

The loan was repayable in three equal installments on 25.06.1996, 25.06.1997 and 25.06.1998.

The company issued cheque bearing No.001242 dated 30.06.2012 for an amount of Rs.1 lac in the name of General Manager, District Industrial Centre to the District Collector, Davinder Kumar 2014.07.24 17:24 I attest to the accuracy and integrity of this document CRM-M-7282-2013 2 Jalandhar which got dishonoured with remarks 'Opening Balance Insufficient'.

The cheque was again presented but returned with the same remarks.

Counsel for the petitioners contends that the company was already under the control of Ministry of Finance through Board for Industrial and Financial Reconstruction (BIFR).therefore, the company and the petitioners cannot be held liable for non-payment of outstanding amount or dishonour of cheque.

It is further submitted that if the petitioners and the company has failed to repay the loan amount, the same gives rise to civil/ contractual liability and the facts do not entail criminal liability.

It is further argued that petitioners No.2 & 3 are not the signatories to the cheque in dispute nor there is any material on record to prove that they are incharge of and responsible for the conduct of business of the company to make them vicariously liable for an offence committed by the company.

The last submission made by counsel is that on 01.04.2012, the amount outstanding against the company was Rs.9,67,802/- only.

The company made certain payments to the department by way of cheques and demand drafts and in this manner, the liability of the company has been reduced to Rs.5,67,802/- after payment of Rs.4 lacs.

Counsel for the respondent, on the other hand, contends that the company and its Directors failed to make any payment on the dates fixed for repayment of the loan amount in three equal installments in the year 1996, 1997 and 1998.

The company issued eleven cheques, detailed in para 6 of the reply by way of affidavit of Bhinder Singh, General Manager, District Industries Centre, Jalandhar on behalf of respondent No.2 and the fiRs.four Davinder Kumar 2014.07.24 17:24 I attest to the accuracy and integrity of this document CRM-M-7282-2013 3 cheques in the year 2006 got dishonoured with the remarks 'exceeds arrangement' and the remaining seven cheques issued in the year 2012 and 2013 got dishonoured with the remarks 'Opening Balance Insufficient'.

In the year 2009, the department announced a scheme known as 'One Time Settlement Scheme' for defaulters to pay interest free loan on payment of principal amount in lump sum by the stipulated date in order to get waiver of penal interest.

The petitioner issued cheque in the sum of Rs.1 lac in favour of the respondent which also got dishonoured.

It is further argued that liability of interest free loan towards principal is Rs.5,97,782/- and the company is liable to pay interest amounting to Rs.32,07,581/- being outstanding as on 31.08.2013.

It is argued with vehemence that keeping in view the conduct of the company and its directors that a large number of cheques were issued from time to time but the same got dishonoured on presentation to the bank, it clearly indicates dishonest intention of the petitioner since the inception of transaction constituting offence punishable under Section 420 IPC.

It is further argued that the petitioners cannot escape their criminal liability by taking the plea that some proceedings are pending before BIFR.

In addition, it is submitted that the issue regarding intention of the petitioner being deceitful can be decided only during couRs.of trial by leading evidence, therefore, the petitioners are not entitled to indulgence of this Court seeking quashing of criminal proceedings who are guilty of causing loss to the State Exchequer.

I have heard counsel for the parties and perused the case file.

The petitioners have not disputed that the company failed to make any payment to the Department of Industries on the dates fixed for Davinder Kumar 2014.07.24 17:24 I attest to the accuracy and integrity of this document CRM-M-7282-2013 4 payment of three installments in the year 1996, 1997 and 1998.

The petitioners have also not controverted the plea of respondent No.2 that 11 cheques, detailed in para 6 of the reply issued by the company from the year 2006 to 2013 got dishonoured on presentation to the bank with the remarks 'exceeds arrangement' / 'opening balance insufficient'.

The petitioners failed to avail benefit of one time settlement scheme floated by the State in the year 2009, according to which the petitioners could discharge their liability by payment of outstanding principal amount only.

The Hon'ble Supreme Court of India in State of Haryana and others versus Ch.Bhajan Lal and otheRs.AIR1992Supreme Court 604 quoted certain categories of cases by way of illustration wherein extra- ordinary power under Article 226 or the inherent power under Section 482 of the Cr.P.C.can be exercised either to prevent abuse of process of any Court or otherwise to secure the ends of justice with the observation that it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

However, the Court in para 109 of the judgment has given a note of caution to exercise this power very sparingly and with circumspection and that too in the rarest of rare cases.

A relevant extract from para 109 reads as follows:- “109.

We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the Court will not be justified in embarking upon an enquiry as to the Davinder Kumar reliability or genuineness or otherwise of the allegations 2014.07.24 17:24 I attest to the accuracy and integrity of this document CRM-M-7282-2013 5 made in the F.I.R.or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice.”

.

When the facts and circumstances of the present case are examined in the light of aforesaid observations, I do not think it to be a fit case wherein the petitioners deserve indulgence of this Court in exercise of extra-ordinary jurisdiction under Section 482 Cr.P.C.For the aforesaid reasons, the petition is dismissed.

However, nothing stated in this order shall prejudice the rights of the petitioners to raise all available pleas before the trial Court.

(REKHA MITTAL) JUDGE July 14, 2014.

Davinder Kumar Davinder Kumar 2014.07.24 17:24 I attest to the accuracy and integrity of this document