REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. _1180 OF 2009
ARISING OUT OF
SPECIAL LEAVE PETITION (CRIMINAL) NO. 369 OF 2006
JUGESH SEHGAL ... APPELLANT
VERSUS
SHAMSHER SINGH GOGI ... RESPONDENT
JUDGMENT
D.K. JAIN, J.
Leave granted.
2. This appeal arises from the judgment and order dated 13th
December, 2005 rendered by a learned Single Judge of the
High Court of Punjab & Haryana at Chandigarh in Criminal
Miscellaneous No. 47932-M of 2004. By the impugned
judgment, the learned Judge, while partly allowing the petition
preferred under Section 482 of the Code of Criminal
Procedure, 1973 (for short “the Code”) seeking quashing of a
private complaint filed by the respondent (hereinafter referred
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to as “the complainant”) under Section 138 of the Negotiable
Instruments Act, 1881 (for short “the Act”) has dismissed the
petition qua the appellant.
3. In order to appreciate the controversy, a few material facts
may be stated thus:
The complainant is engaged in the trading of petroleum
products. According to him, the appellant, his father, brother and
mother used to purchase mobile oil from him from time to time.
According to the complainant, on 20th November, 2000, all four of
them got issued a cheque bearing No. 227739 drawn on Indian
Bank, Sonepat in the sum of Rs.24,92,115/- in discharge of their
liability towards him. The complainant presented the cheque for
payment to his bankers, which was returned unpaid on 29th
December, 2000 with the remarks “Account closed”. Thereafter, on
17th January, 2001, the complainant got a legal notice issued to all
the four accused asking them to pay the cheque amount. In their
reply to the legal notice, the accused denied having any business
dealings with the complainant as also the issue of cheque in
question by any one of them. Their stand was that no such cheque
was ever signed, issued or got issued by them at any point of time in
favour of the complainant.
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4. Dissatisfied with the response to the legal notice, the
complainant filed a complaint under Section 138 of the Act
against the afore-noted four persons. Paragraph 3 of the
complaint, which contains the gist of complainant’s case and
has a bearing on the issue involved in this appeal, reads as
follows:
“That the complainant handed over the cheque No.
227739, dt. 20.11.2000 of Indian Bank, Sonepat to its
banker Oriental Bank of Commerce, Samalkha for the
collection of the amount of aforesaid cheque after about
one month as requested by the complainants. But the
Indian Bank, Sonepat returned the said cheque with the
remarks “Account closed” vide return memo dated
29.12.2000. The return memo dated 29.12.2000
alongwith original cheque was returned by the O.B.C.,
Samalkha alongwith its forwarding letter dt. 03.01.2001 to
the complainant vide which the O.B.C., Samalkha also
informed that a sum of Rs.3136/- has been debited in the
complainant’s account as collection charges. After
receiving the return memo alongwith forwarding
03.01.2001, the complainant came to know for the first
time that the accused have issued the aforesaid
cheque dt. 20.11.2000 with a fraudulent intention
knowing fully well that the accused have no sufficient
amount for the encashment of the aforesaid cheque
or the said account was not in existence on that date
or the said account pertained to someone else. The
complainant has also came to know that all the above
named accused being a family members, formed an
unlawful group to play fraud with the public and there was
several other instances.”
(emphasis supplied)
5. The Chief Judicial Magistrate, Panipat took cognizance of the
complaint and vide order dated 20th September, 2003, directed
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issue of notice to all the accused. All the accused put in
appearance; notice of accusation was given; they pleaded not
guilty and claimed trial. Thereafter, all the four accused filed
petition under Section 482 of the Code praying for quashing of
the complaint. As noted earlier, by a short order, the High
Court has dismissed the petition qua accused No.1, the
appellant herein, on the ground that the plea of the appellant
that the cheque was not issued by him involved a disputed
question of fact which could not be gone into by the Court in
proceedings under Section 482 of the Code. As regards the
rest of three accused petitioners, the learned Judge allowed
the petition holding that neither the cheque had been issued by
them nor they had been shown to be vicariously liable under
Section 141 of the Act. Aggrieved by the said decision, the
appellant has come up in appeal before us.
6. Learned counsel appearing for the appellant submitted that the
High Court gravely erred in declining to exercise its jurisdiction
under Section 482 of the Code in a case where the complaint
ex facie lacked the basic ingredients of the offence under
Section 138 of the Act for which the appellant has been made
to stand trial. It was contended that admittedly, the cheque in
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question, purportedly issued by the appellant, was from an
account not maintained by him with the Indian Bank but by one
Ms. Shilpa Chaudhary and therefore, the basic ingredient of
Section 138 of the Act was missing. It was also urged that
since the said bank account had already been closed on 3rd
November, 2000, there was no question of the subject cheque
being issued in favour of the complainant by the appellant on
20th November, 2000. It was pleaded that the filing of the
complaint under the said provision is an abuse of the process
of the Court and therefore, the High Court ought to have
quashed the complaint.
7. Per contra, learned counsel appearing on behalf of the
complainant, supported the impugned order and submitted that
having issued the cheque to the complainant under his
signatures by making a false representation that the account
was maintained by him, the appellant had duped the
complainant. It was contended that at this juncture the
question whether or not the cheque was issued by the
appellant is pre-mature as the same would be determined only
after the evidence has been led by the parties. Learned
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counsel thus, argued that the appellant having played a fraud
on the complainant, does not deserve any relief.
8. It is true that Section 138 of the Act was enacted to punish
unscrupulous drawers of cheques who, though purport to
discharge their liability by issuing cheque, have no intention of
really doing so, yet to fasten a criminal liability under the said
provision, necessary ingredients of the Section are to be
satisfied. Section 138 of the Act reads as follows:
138. Dishonour of cheque for insufficiency, etc., of
funds in the account–Where any cheque drawn by a
person on an account maintained by him with a banker
for payment of any amount of money to another person
from out of that account for the discharge, in whole or
in part, of any debt or other liability, is returned by the
bank unpaid, either because of the amount of money
standing to the credit of that account is insufficient to
honour the cheque or that it exceeds the amount
arranged to be paid from that account by an agreement
made with that bank, such person shall be deemed to
have committed an offence and shall, without prejudice
to any other provisions of this Act, be punished with
imprisonment for a term which may be extended to two
years, or with fine which may extend to twice the
amount of the cheque, or with both:
Provided that nothing contained in this section shall
apply unless–
(a) the cheque has been presented to the bank within a
period of six months from the date on which it is
drawn or within the period of its validity, whichever
is earlier;
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(b) the payee or the holder in due course of the
cheque, as the case may be, makes a demand for
the payment of the said amount of money by giving
a notice in writing, to the drawer of the cheque,
within thirty days of the receipt of information by him
from the bank regarding the return of the cheque as
unpaid; and
(c) the drawer of such cheque fails to make the
payment of the said amount of money to the payee
or, as the case may be, to the holder in due course
of the cheque, within fifteen days of the receipt of
the said notice.
Explanation.–For the purposes of this section, “debt or
other liability” means a legally enforceable debt or other
liability.
9. It is manifest that to constitute an offence under Section 138 of
the Act, the following ingredients are required to be fulfilled:
(i) a person must have drawn a cheque on an account
maintained by him in a bank for payment of a certain amount
of money to another person from out of that account;
(ii) The cheque should have been issued for the discharge, in
whole or in part, of any debt or other liability;
(iii) that cheque has been presented to the bank within a period of
six months from the date on which it is drawn or within the
period of its validity whichever is earlier;
(iv) that cheque is returned by the bank unpaid, either because of
the amount of money standing to the credit of the account is
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insufficient to honour the cheque or that it exceeds the amount
arranged to be paid from that account by an agreement made
with the bank;
(v) the payee or the holder in due course of the cheque makes a
demand for the payment of the said amount of money by giving
a notice in writing, to the drawer of the cheque, within 15 days
of the receipt of information by him from the bank regarding the
return of the cheque as unpaid;
(vi) the drawer of such cheque fails to make payment of the said
amount of money to the payee or the holder in due course of
the cheque within 15 days of the receipt of the said notice;
10. Being cumulative, it is only when all the afore-mentioned
ingredients are satisfied that the person who had drawn the
cheque can be deemed to have committed an offence under
Section 138 of the Act.
11. In the case before us, it is clear from the facts, briefly noted
above, and in para 3 of the complaint as extracted, that on
receipt of the return memo from the bank, the complainant is
stated to have realized that the dishonoured cheque was
issued from an account which was not maintained by accused
No.1–the appellant herein, but by one Shilpa Chaudhary. As a
matter of fact and perhaps having gained the said knowledge,
on 20th January, 2001, the complainant filed an FIR against all
9
the accused for offences under Sections 420, 467, 468, 471,
406 of the Indian Penal Code (IPC). Thus, there is hardly any
dispute that the cheque, subject matter of the complaint under
Section 138 of the Act, had not been drawn by the appellant on
an account maintained by him in the Indian Bank, Sonepat
branch. That being so, there is little doubt that the very first
ingredient of Section 138 of the Act, enumerated above, is not
satisfied and consequently the case against the appellant for
having committed an offence under Section 138 of the Act
cannot be proved.
12. The next question for consideration is whether or not
in the light of the afore-mentioned factual position, as projected
in the complaint itself, it was a fit case where the High
Court should have exercised its jurisdiction under Section 482
of the Code?
13. The scope and ambit of powers of the High Court under
Section 482 of the Code has been enunciated and reiterated
by this Court in a series of decisions and several
circumstances under which the High Court can exercise
jurisdiction in quashing proceedings have been enumerated.
Therefore, it is unnecessary to burden the judgment by making
1
0
reference to all the decisions on the point. It would suffice to
state that though the powers possessed by the High Courts
under the said provision are very wide but these should be
exercised in appropriate cases, ex debito justitiae to do real
and substantial justice for the administration of which alone the
courts exist. The inherent powers do not confer an arbitrary
jurisdiction on the High Court to act according to whim or
caprice. The powers have to be exercised sparingly, with
circumspection and in the rarest of rare cases, where the court
is convinced, on the basis of material on record, that allowing
the proceedings to continue would be an abuse of the process
of the court or that the ends of justice require that the
proceedings ought to be quashed. [See: Janata Dal Vs. H.S.
Chowdhary & Ors.1, Kurukshetra University & Anr. Vs.
State of Haryana & Anr.2 and State of Haryana & Ors. Vs.
Bhajan Lal & Ors.3]
14. Although in Bhajan Lal’s case (supra), the court by way of
illustration, formulated as many as seven categories of cases,
wherein the extra-ordinary power under the afore-stated
1
(1992) 4 SCC 305
2
(1977) 4 SCC 451
3
1992 Supp (1) SCC 335
1
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provisions could be exercised by the High Court to prevent
abuse of process of the court yet it was clarified that it was not
possible to lay down precise and inflexible guidelines or any
rigid formula or to give an exhaustive list of the circumstances
in which such power could be exercised.
15. The purport of the expression “rarest of rare cases” has been
explained very recently in Som Mittal Vs. Government of
Karnataka4. Speaking for the three-Judge Bench, Hon’ble the
Chief Justice said:
“When the words ‘rarest of rare cases’ are used after the
words ‘sparingly and with circumspection’ while
describing the scope of Section 482, those words merely
emphasize and reiterate what is intended to be
conveyed by the words ‘sparingly and with
circumspection’. They mean that the power under
Section 482 to quash proceedings should not be used
mechanically or routinely, but with care and caution, only
when a clear case for quashing is made out and failure
to interfere would lead to a miscarriage of justice. The
expression “rarest of rare cases” is not used in the
sense in which it is used with reference to punishment
for offences under Section 302 IPC, but to emphasize
that the power under Section 482 Cr.P.C. to quash the
FIR or criminal proceedings should be used sparingly
and with circumspection.”
16. Bearing in mind the above legal position, we are of the opinion
that it was a fit case where the High Court, in exercise of its
4
(2008) 3 SCC 574
1
2
jurisdiction under Section 482 of the Code, should have
quashed the complaint under Section 138 of the Act.
17. As already noted hereinbefore, in para 3 of the complaint,
there is a clear averment that the cheque in question was
issued from an account which was non-existent on the day it
was issued or that the account from where the cheque was
issued “pertained to someone else”. As per complainant’s own
pleadings, the bank account from where the cheque had been
issued, was not held in the name of the appellant and
therefore, one of the requisite ingredients of Section 138 of the
Act was not satisfied. Under the circumstances, continuance
of further proceedings in the complaint under Section 138 of
the Act against the appellant, would be an abuse of the
process of the Court. In our judgment, therefore, the decision
of the High Court cannot be sustained.
18. In the result, the appeal is allowed; the impugned order is set
aside and as a consequence, Criminal Complaint No. 275 of
2008 pending against the appellant in the Court of Chief
Judicial Magistrate, Panipat is quashed.
……………………………………….J.
(D.K. JAIN)
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3
………………………………………..J.
(R.M. LODHA)
NEW DELHI;
JULY 10, 2009.
1 IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION 4 CRIMINAL APPEAL NO. 1180 OF 2009 Jugesh Sehgal .. Appellant(s) Versus Shamsher Singh Gogi .. Respondent(s) ORDER
Criminal Complaint No. 275 of 2008 mentioned in paragraph 18 of
the judgment dated July 10, 2009 be read as “Criminal Complaint No.
59/2 of 2001”.
………………..J.
[ D.K. JAIN ]
....................J. [ R.M.
LODHA ]
NEW DELHI,
JULY 16, 2009.