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CR.MA/119820/2008 6/ 6 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL
MISC.APPLICATION No. 1198 of 2008
============================================
P
THAVARSIRAJ & 2 - Applicant(s)
Versus
STATE
OF GUJARAT & 1 - Respondent(s)
============================================
Appearance
:
MR GT
DAYANI for Applicant(s) : 1 - 3.
MR KT DAVE
ADDL. PUBLIC PROSECUTOR for Respondent(s) : 1,
MR UTKARSH B JANI
for Respondent(s) : 2,
============================================
CORAM
:
HONOURABLE
MR.JUSTICE ANANT S. DAVE
Date
: 14/08/2008
ORAL
ORDER
1. This
application is filed under Section 482 of the Code of Criminal
Procedure for quashing the proceedings for criminal case No.3077 of
2007 filed under Section 138 of the Negotiable Instrument Act pending
before the learned Metropolitan Magistrate, Court No.5, Ahmedabad.
2. The
main contention of the applicants is that the applicants are the
Directors of the Company named M/s. Duracraft Papers Pvt. Ltd., a
company duly registered under Indian Companies Act, 1956 and that
respondent No.2 is one of the partners of M/s. J.M.C. Engineering, a
partnership firm dealing in the business of manufacturing of
machineries related to the manufacture of Art & Craft papers.
3. It
is the case of the applicants that Memorandum of Understanding dated
12.12.2005 was entered into between applicant No.1 and respondent
No.2 and accordingly, respondent No.2 was required to supply present
applicants 30 TPC Craft Paper Mill Machinery on various terms and
conditions which were set out in the said Memorandum of Understanding
i.e. regarding Design, Technical Specification & Scope of Supply,
Exclusions, Commercial terms and conditions, Price Break up and
stipulated period for supply of machinery. It is further stated that
respondent No.2 grossly failed to supply the machinery within the
prescribed time limit and the applicants suffered huge loss.
However, in a revised schedule, respondent No.2 agreed to delivery
the goods latest by 15.1.2007 and that too, was not complied with.
The applicants submitted that in the month of March, 2007, the
applicants had given three cheques in which except one cheque,
remaining two cheques were given without filling the date. The
details of cheques are as under:
Cheque No.
Amount
Date
694013
6,77,250.00
22/03/2007
694062
6,00,000.00
24/03/2007
694014
18,07,718.00
16/08/2007
3.1. That
so far as cheque No.694062 is concerned, the applicants had already
deposited the amount of Rs. 6 lacs which was given due credit and
cheque No. 694013 amounting to Rs. 6,77,250/- is concerned, the said
cheque was issued towards 5% retention money as per the terms of
payment and it is also reflected on the statement of account.
3.2. Thus,
according to the applicants, no cause of action arose for filing a
case under Negotiable Instrument Act.
4. Shri
G.T.Dayani, learned advocate, appearing for the applicants submit
that the case of the applicants is covered by the decision reported
in AIR 2005 SC 3512 in the case of S.M.S. Pharmaceuticals Ltd. v.
Neeta Bhalla and AIR 2007 SC 3086 in the case of Sabhitha
Ramamurthy v. R.B.S. Channabasavaradhya and submits that no
averments in the complaint are made by the complainant to the effect
that the accused wherein were responsible for the conduct of the
business of the Company and, therefore, in absence of sufficient
averments as indicated in the above judgment, the complaint deserves
to be quashed and set aside.
5. Shri
U.B.Jani, learned advocate, appearing for respondent No.2 has drawn
the attention to the affidavit-in-reply filed by the complainant and
respondent No.2 herein. It is submitted that the Cheque No.694062
amounting to Rs. 6 lacs which was directly deposited by the present
accused was dishonored. The true and correct fact is that the said
cheque was received but was never cleared and, therefore, cause of
action did arise under the Negotiable Instrument Act. Learned
advocate further submits that the case of the applicants is not
covered by the S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla
(supra), inasmuch as, the complaint reads as t he accused
are the Directors of Private Limited Company registered under the
provision of the Indian Companies Act, 1956 and the above Directors
are in-charge of day-to-day business of the Company.
5.1. Learned
advocate for respondent NO.2 further submits that along with the
complaint the research report was also submitted and accordingly the
present applicants are Directors of the Company. In view of the
above averments, it is prima facie established that the accused
herein were the Directors in-charge of day-to-day affairs of the
business of the Company and it will be sufficient to bring the case
of the respondent No.2 within parameters of the law laid down by the
Apex Court in the case S.M.S. Pharmaceuticals Ltd. v. Neeta
Bhalla (supra).
5.2. Learned
advocate for respondent No.2 relied on para 8 of the
affidavit-in-reply which reads as under:
It
is respectfully submitted that cheque No.694062 amounting to Rs. 6
lakhs which was directly deposited by the present accused was
dishonored. Despite knowing all these facts, it is being projected
as if the said cheque was already cleared. The true and correct fact
is that the said cheque was received but was never cleared and
the applicants have not come with clean hands since the applicants
have only produced incomplete account statement . The present
respondent begs to annex true and correct account statement along
with this reply as mark Annexure C. It shall be clear from the said
statement that the said Rs. 6 lakhs has been credited and shown as
receipt of payment. However, there was an immediate contra entry
given in order t nullify the said credit entry since the said cheque
was dishonored. It is this very fact which has been suppressed by
the accused.
5.3. According
to learned advocate for the respondent No.2 since there is
suppression of the above facts, a case is made out not to exercise
powers under Section 482 of the Code of Criminal Procedure.
6. Having
heard learned advocates appearing for the parties and considering the
facts and circumstances of the case, in the complaint filed by the
complainant on 11.10.2007 there are specific averments to the effect
that the present applicants are the Directors of the Company and they
are in-charge of the day-to-day affairs of the business of the
Company. Not only that but the learned Metropolitan Magistrate has
considered the above aspect and, therefore, process is issued.
7. In
my humble view, the decision relied on by learned advocate for the
applicants was a case where no sufficient averments were made and
only a statement was made to the effect that the accused were
partners of the partnership firm. In the present case, on perusal of
the record along with the complaint and averments, it clearly
establishes that the accused are the Directors in-charge of the
day-to-day affairs of the business. The reliance placed on the
decisions of the Apex Court in the case of S.M.S. Pharmaceuticals
Ltd. v. Neeta Bhalla (supra) and Sabhitha Ramamurthy v. R.B.S.
Channabasavaradhya (surpa), is of no help to the applicants and
even in the case of doubt whether ‘X’ or ‘Y’, Director is in-charge
of the day-to-day affair, can be even raised before the concerned
Magistrate by way of defence and can be scrutinized at an appropriate
state.
8. Considering
the above facts and circumstances of the case, I am not inclined to
accept the arguments of Shri Dayani, learned advocate for the
applicants as disputed question of facts arise and contentions raised
herein by the applicants can be raised before the concerned
Magistrate by way of defence.
8.1. So
far as suppression of facts as stated in para 8 of the
affidavit-in-reply is concerned, it is not advisable to deal with the
same on merit in view of pendency of proceedings before the concerned
Magistrate.
9. This
Criminal Misc. Application is rejected. Notice is discharged.
Ad-interim relief granted earlier stands vacated forthwith.
[ANANT
S. DAVE, J.]
//smita//
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