The Magistrate has no right or power to refer it for investigation to police as in the case of private complaint filed in accordance with the provisions of Cr.P.C.

Orissa High Court
S. Jayaswami And Anr. vs State Of Orissa And Anr. on 23 February, 2005
Equivalent citations: 2005 (2) ALD Cri 23, IV (2005) BC 469, 99 (2005) CLT 424
Author: A Parichha
Bench: A Parichha

JUDGMENT

A.K. Parichha, J.

1. This is an application under Section 482 of the Code of Criminal Procedure (in short, “Cr.P.C.”) for quashing the proceedings in G.R. Case No. 896 of 2004 of the Court of Learned S.D.J.M., Puri arising out of Kumbharpada P.S. Case No. 144 of 2004 involving offences under Sections 420/34, IPC and Section 138 of the Negotiable Instruments Act.

2. Opp. Party No. 2 lodged an FIR on 29.7.2004 in Kumbharpara Police Station alleging that the petitioners who are Managing Director, and Finance Director respectively of M/s. Smith and Keener Pharmaceuticals Pvt. Ltd., Hyderabad had business transaction with him and in that connection they had issued 12 post-dated cheques, each worth of Rs. 50,000/-, towards repayment of the security deposit. But on presentation in the Bank, those cheques were dishonoured one after the other. Basing on the said FIR, Kumbharpara P.S. Case No. 144 of 2004 was registered under Sections 420/34, IPC and Section 138 of the Negotiable Instrument Act, (in short, “the Act”) and investigation of the case is going on. The petitioners have filed the present application under Section 482, Cr.P.C. to quash the said investigation and proceedings of the G.R. Case No. 896 of 2004 basically on the plea that such case is not maintainable in the eye of law.

3. Mr. S. N. Mohapatra, learned Senior Counsel appearing for the petitioners submitted that complaint cases bearing ICC Nos. 79 of 2004, 113 of 2004 and 135 of 2004 having already been filed in the Court of Learned S.D.J.M., Puri on the issue of bouncing of cheques bearing Nos. 164276 dated 28.1.2004, 164277 dated 28.2.2004, 164278 dated 28.3.2004 and some complaint cases having been filed subsequently for the rest cheques, G.R. Case No. 896 of 2004 on the same issue is not maintainable. He submitted that even otherwise Section 142 of the Act contemplates for fifing of complaint petitions only by the payee or holder of the dishonoured cheques and bars police investigation into the offence under Section 138 of the Act.

4. Mr. Mohapatra, Learned Counsel appearing for Opp. Party No. 2, on the other hand, argued that the cheques involved in G.R. Case No. 896 of 2004 and ICC Nos. 79 of 2004, 113 of 2004, 135 of 2004 not being one and the same, proceeding in G.R. Case No. 896 of 2004 is maintainable. He further submitted that Section 142 of the Act does not bar police investigation when the offence under Section 138 of the Act is coupled with the offence under Section 420, IPC. It is submitted by Mr. Mohapatra that investigation is going on in the G.R. Case and at the end of investigation only it can be known whether there is prima facie case for the alleged offences and whether the petitioners would be prosecuted and so, the prayer for quashing the proceeding in G.R. Case No. 896 of 2004 at the stage of investigation is premature.

5. From the submissions of the Learned Counsel for the parties, the following points emerge for consideration and adjudication :

(i) Whether police investigation is permissible into an allegation relating to offences under Section 138 of the Act.

(ii) Whether the proceeding in a case can be quashed at the stage of investigation.

(iii) Whether pendency of complaint cases filed by Opp. Party No. 2 before the Learned S.D.J.M., Puri operates as a bar to proceed in G.R. Case No. 896 of 2004.

6. Section 142 of the Act reads as follows :

“Cognizance of offences : Notwithstanding anything contained in the Code of Criminal Procedure, 1973 :

(a) No Court shall take cognizance of any offence punishable under Section 138 except upon a complaint in writing made by the payee or, as the case may be, the holder in due course of the cheque.

(b) Such complaint is made within one month of the date on which the cause of action arises under Clause (c) of the proviso to Section

138.

(c) No Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under Section 138.”

Sub-section (a) of Section 142 of the Act clearly contemplates that Court shall not take cognizance of an offence under Section 138 of the Act except on a complaint in writing made by the payee or holder in due course of the cheque. While interpreting the provision of Section 142 of the Act, in the case of J. Durgaprasad v. State of Andhra Pradesh, 1993 (76) Comp. Cases, 339 (AP), the High Court of Andhra Pradesh observed that in view of Section 142 of the Act when a complaint is filed by a payee or holder in due course of the cheque, which was dishonoured, the Magistrate is necessarily to take cognizance, if the other ingredients are satisfied. But the Magistrate has no right or power to refer it for investigation to police as in the case of private complaint filed in accordance with the provisions of Cr.P.C. Similar view was taken in the case of K. Mahadevan v. Y. Venketesh, (1994) 79 Comp. Cases, 206. In these cases it was observed that Sub-section (1) of Section 142 contemplates filing of a private complaint and does not give any indication to refer such a private complaint filed by the payee or holder in due course of a cheque for police investigation under Section 156(3) of Cr.P.C. These observations of the Courts also suggest that police is not empowered to investigate into a complaint involving an offence under Section 138 of the Act.

7. Mr. R. Mohapatra, Learned Counsel for Opp. Party No. 2, argued that police investigation might not be contemplated for an offence under Section 138 of the Act, but when such offence is coupled with other offences like Section 420 and 406, IPC, then police would certainly have the authority to conduct investigation into the case.

8. Mr. S. N. Mohapatra, Learned Sr. Counsel appearing for the petitioners counters the aforesaid submission by submitting that the matter of dishonour of cheque squarely comes under Section 138 of the Act and offence under Section 420/34, IPC is not applicable to such an issue and so in such cases, the question of police investigation is not there. In support of his contention, he cited the case of G. Sagar Sun and Anr. v. State of U.P., AIR 2000 SC 754. In that case the cheques issued by the accused to the finance company on two occasions were dishonoured by the Bank and proceedings under the Section 138 of the Act was initiated by the finance company for dishonour of the cheques. During pendency of such proceedings, complaint was filed under Section 406 and 420, IPC against the accused. But nothing was specifically mentioned as to how complainant was duped and how the accused indulged in corrupt practices. The Apex Court held that in that situation there was no occasion for the complainant to prosecute the accused under Section 406 and 420, IPC and quashed the prosecution for those offences. In the case of Sunil Kumar v. Escorts Yamaha Motors Ltd. and Ors., (2000) 18 OCR (SC) 67, the informant appellant filed an FIR alleging therein that the respondents by the act of conspiracy committed Criminal Breach of trust by presenting blank cheques signed by the appellants for withdrawing the money for a purpose for which it had not been given and by so doing, caused loss to the informant. Basing on the FIR a case under Sections 420 and 406, IPC was registered. The respondents filed an application before the High Court for quashing the FIR, inter alia, on the ground that the averments did not make out the offences alleged, that the FIR had been lodged with ulterior motive and that there had been gross abuse of the process of law. The High Court on consideration of the submissions of the parties and the materials on record quashed the FIR holding that the informant after resorting to Civil remedy for adjudication by a Magistrate, lodged the complaint for which the subsequent complaint was abuse of the process of law. This finding of the High Court was challenged in the Apex Court and the Apex Court concluded that the necessary ingredients of the offence of cheating and Criminal breach of trust were not made out, but on the other hand, the attending circumstances indicate that the FIR was lodged to preempt filing of Criminal complaint against the informant under Section 138 of the Act. It was therefore held that the High Court was justified in quashing the FIR, as otherwise it would tantamount to abuse of the process of the Court. These judicial pronouncements indicate that unless specific instances of cheating is pleaded, issue of bounced cheque would not attract the provisions of Section 420, IPC and would be confined to Section 138 of the Act. The rulings also sugest that FIR and investigation can be quashed, if such investigation amounts to abuse of the process of law and Court.

9. In the present case, the allegation of Opp. Party No. 2 is that the cheques bearing Nos. 164276, 164277, 164278, 164279 and 164280 issued by the petitioners were dishonoured by the Bank, the first three due to insufficiency of funds and the rest two due to instruction of the petitioners to stop payment. According to the Learned Counsel for the petitioners, the matter of dishonour of the above noted cheques by the Banks is now the subject matter of the complaint cases bearing ICC Nos. 79, 133 and 135 of 2004 in the Court of Learned SDJM, Puri and so, on the self-same issue the police investigation cannot be permitted to continue.

10. Learned Counsel for Opp. Party No. 2, on the other hand, submits that the cheques involved in the complaint cases and the G.R. Case being different and payment of some of the cheques having been stopped by the petitioners, the provisions of Section 420, IPC is attached and the police investigation in that situation is permissible. The cheques bearing Nos. 164276 to 164280 are involved in G.R. Case No. 896 of 2004. The number of the cheque involved in ICC No. 79 of 2004 is 164276, in ICC No. 113 of 2004 is 164277 and in ICC 135 of 2004 is 164278. Some more complaint cases are also said to have been filed involving the remaining cheques. So, now, the bouncing of the cheques No. 164276 to 164280 is the subject matter of the complaint cases filed by Opp. Party No. 2 before SDJM, Puri. For the self-same issue another investigation by the police during pendency of the complaint case would amount to parallel proceeding, which is not permissible under the law. The allegation in the complaint case as well as in the FIR of the G.R. Case is virtually one and the same, i.e., bouncing of cheques bearing Nos. 164276 to 164280. The dishonour of the cheques by the Bank due to insufficient funds is squarely covered under the scope of Section 138 of the Act. The provision of Section 420, IPC is not attracted unless mala fide intention of the person issuing the cheque is established. Here, no specific instances have been pleading about the existence of mala fide intention. As has been said in the case of G. Sagar Suri (supra), dishonest intention and mis-representation are to be specifically indicated to attract the provisions of Section 406 or 420, IPC and if such specific allegations are not there and general allegations of dishonour of cheque is there, only Section 138 of the Act will be attracted. When same cheques are involved in the complaint case and in the G.R. Case and when the only allegation is bouncing of the cheques for insufficient funds or stop payment direction, the issue will be covered only under Section 138 of the Act. In such situation, the police investigation into the issue during pendency of the complaint cases would be abuse of the process of Law and Court.

11. Taking note of the above factors and the legal propositions, I am of the considered opinion that continuance of the investigation in G.R. Case No. 896 of 2004 of the Court of Learned SDJM, Puri will be abuse of the process of Court and Law. Therefore, I am inclined to quash the proceedings in G.R. Case No. 896 of 2004.

12. In the result, the CRLMC is allowed and the proceedings in G.R. Case No. 896 of 2004 is quashed.

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