LAFARGE AGGREGATES & CONCRETE INDIA P.LD Vs SUKARSH AZAD
Bench: GYAN SUDHA MISRA,PINAKI CHANDRA GHOSE
Case number: Crl.A. No.-001941-001941 / 2013
Diary number: 4301 / 2011
Advocates: KHAITAN & CO. Vs
ABHISHEK ATREY
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IN THE SUPREME COURT OF INDIA REPORTABLE CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1941 OF 2013 (@ Special Leave Petition(Crl) No. 1327 of 2011)
LAFARGE AGGREGATES & CONCRETE INDIA P.LD Appellant
VERSUS
SUKARSH AZAD & ANR Respondents
WITH CRIMINAL APPEAL NO. 1942 OF 2013
(@ Special Leave Petition(Crl) No. 1145 of 2012)
O R D E R
1. Leave granted.
2. The appellant herein has challenged the order
passed by the High Court whereby it has allowed the
petition filed by the respondents herein, who are
the Directors in a company known as M/s. Ria
Constructions Ltd. and was pleased to quash the
complaint lodged by the appellant as also all
consequential proceedings pending before the
Magistrate in regard to the complaint lodged by the
appellant for an offence under Section 138 of the
Negotiable Instruments Act, 1881.
3. Admittedly, the accused no. 2 in the complaint
had issued the cheque in favour of the appellant for
a sum of Rs.2,50,000/-, which was dishonoured as
there was instruction of 'stop payment' by the
Managing Director. This led to the lodgment of a
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complaint at the instance of the petitioner in which
proceedings started.
4. At this stage, the respondents herein filed a
petition under Section 482 of the Code of Criminal
Procedure, 1973 (“Cr.P.C.” for short) praying for
quashing of the complaint and all consequential
proceeding wherein the respondents had offered to
tender the cheque amount of Rs.2,50,000/- to the
appellant who had lodged the complaint alleging that
the stop payment instructions by the respondents was
illegal which made the offence triable in a summary
procedure before the Magistrate. As already stated,
the respondents offered to pay the cheque amount of
Rs.2,50,000/- which had been dishonoured due to
instructions of stop payment.
5. The High Court allowed the petition filed by
the respondents herein for quashing of the
proceeding but the said order was passed ex-parte.
The appellant, therefore, filed an application for
recall of the said order but the High Court
dismissed the application for recall on the ground
that the averments in the complaint did not meet the
test laid down by this Court in the matter of N.K.
Wahi Vs. Shekhar Singh and others, 2007 (9) SCC
481. It is this order which is under challenge in
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this special leave petition at the instance of the
appellant-complainant.
6. We have heard counsel for the appellant as
also the respondents and taking an overall view of
the matter, we are of the opinion that this appeal
is not fit to be entertained against rejection of
the application for recall of the order by which the
proceedings against the respondents herein had been
quashed by the High Court. Nevertheless, we are
conscious of the fact that the appellant should not
be deprived of the amount for which the respondents
had stopped payment which led to the lodgment of the
complaint. We, therefore, suggested to the
respondents that they should honour the cheque which
had been issued by them by making the payment along
with the interest, which would be in the nature of
compensation for stop payment instructions at their
instance and that amount by way of lump sum amount
including interest and compensation would be around
Rs.5 lakhs.
7. The respondents have agreed to pay the said
amount but the appellant has refused to accept the
payment and insisted that the appeal against
rejection of the recall application should be
allowed by this Court. Counsel for the appellant
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submitted that merely because the accused has
offered to make the payment at a later stage, the
same cannot compel the complainant-appellant to
accept it and the complainant-appellant would be
justified in pursuing the complaint which was lodged
under the Negotiable Instruments Act, 1881. In
support of his submission, counsel for the Appellant
also relied on a citation of Rajneesh Aggarwal Vs.
Amit J. Bhalla (2001) 1 SCC 631.
8. However, we do not feel persuaded to accept
this submission as the appellant has to apprise
himself that the primary object and reason of the
Negotiable Instruments Act, 1881, is not merely
penal in nature but is to maintain the efficiency
and value of a negotiable instrument by making the
accused honour the negotiable instrument and paying
the amount for which the instrument had been
executed.
9. The object of bringing Sections 138 to 142 of
the Negotiable Instruments Act on statute appears to
be to inculcate faith in the efficacy of banking
operations and credibility in transacting business
of negotiable instruments. Despite several remedy,
Section 138 of the Act is intended to prevent
dishonesty on the part of the drawer of negotiable
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instrument to draw a cheque without sufficient funds
in his account maintained by him in a bank and
induces the payee or holder in due course to act
upon it. Therefore, once a cheque is drawn by a
person of an account maintained by him for payment
of any amount or discharge of liability or debt or
is returned by a bank with endorsement like (I)
refer to drawer (ii) exceeds arrangements and (iii)
instruction for stop payment and like other usual
endorsement, it amounts to dishonour within the
meaning of Section 138 of the Act. Therefore, even
after issuance of notice if the payee or holder does
not make the payment within the stipulated period,
the statutory presumption would be of dishonest
intention exposing to criminal liability.
10. But in the instant case, the negotiable
instrument which admittedly is a cheque was issued
by respondent no. 2 who is the managing director and
the contesting respondents herein against whom the
proceedings have been quashed are not the director
of the company in a statutory capacity and,
therefore, the payments towards cheque in any case
could not have been made by them and it was
respondent no. 2 who was liable to honour the
cheque. Nevertheless, the respondents offered to
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make the payment to the appellant/complainant, yet
the appellant refused to accept the payment and
pursued the complaint which was quashed by the High
Court on which date the appellant had failed to
appear without sufficient cause. Thereafter, if the
High Court refused to recall that order, we do not
consider that there were sufficient grounds
necessarily to recall the order quashing the
complaint.
11. However, in the interest of equity, justice
and fairplay, we deem it appropriate to direct the
respondents to make the payment to the appellant by
issuing a demand draft in their favour for a sum of
Rs.5 lakhs, which would be treated as an overall
amount including interest and compensation towards
the cheque for which stop payment instructions had
been issued. If the same is not acceptable to the
appellant, it is their choice but that would not
allow them to prosecute the respondents herein in
pursuance to the complaint which they have lodged
implicating these two respondents.
12. Besides this, the appellant also ought to take
note of the fact that these appeals are not directed
against the order by which the complaint had been
quashed insofar as these two respondents are
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concerned but it is directed against the order of
the High Court by which it refused to recall the
order by which the complaint had been quashed. The
appellant had failed to offer any sufficient cause
for their non-appearance on the date when the
complaint had been quashed and if we were to be
driven to merely taking a technical view of the
matter, these appeals could have been rejected even
on the ground of non-sufficiency of material
furnished by the appellant in the High Court against
refusal to recall the order in which case the
petitioner cannot realise even the amount towards
the cheque issued in their favour. But considering
the fact that the appellant would be deprived of
their due amount of Rs.2,50,000/-, we delved into
the factual details and considered just and
appropriate to direct the respondents to make the
payment for the sake of substantial justice to the
complainant-appellant as also in view of the
analogous appeal, arising out of SLP(Crl)No. 1145/
2012 directed against the order dated 10th September,
2010 passed in Crl.Misc.No.20203 of 2010 whereby the
High Court had allowed the petition filed by the
respondents herein under Section 482 of the Code of
Criminal Procedure, 1973 and was pleased to quash
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the proceedings against them. It was in this
context that we thought it appropriate to direct the
respondents to make the payment towards the cheque
in which stop payment instructions had been issued.
Besides this, the appeal is time barred by 359 days
for which also we see no justification. On the one
hand, the appellant has sought to impress upon this
Court to take a technical view of the matter by
urging that the respondents had not made the payment
during the 15 days notice period, even though that
had been offered at a later stage, but ignoring his
own conduct he expects this Court to condone the
huge delay of 359 days in filing the appeal, which
is fit to be rejected outright.
13. Hence, appeal arising out SLP(Crl) No. 1327 of
2011 is dismissed on merit and appeal arising out of
SLP(Crl) No. 1145 of 2012 is dismissed on the ground
of delay as also on merits subject to the direction
of payment to the appellant by the respondents.
........................J. (GYAN SUDHA MISRA)
........................J. (PINAKI CHANDRA GHOSE)
NEW DELHI SEPTEMBER 10, 2013