{"id":102308,"date":"2008-05-08T00:00:00","date_gmt":"2008-05-07T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/southern-steel-ltd-others-vs-jindal-vijayanagar-steel-ltd-on-8-may-2008"},"modified":"2015-01-31T04:43:54","modified_gmt":"2015-01-30T23:13:54","slug":"southern-steel-ltd-others-vs-jindal-vijayanagar-steel-ltd-on-8-may-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/southern-steel-ltd-others-vs-jindal-vijayanagar-steel-ltd-on-8-may-2008","title":{"rendered":"Southern Steel Ltd. & Others vs Jindal Vijayanagar Steel Ltd on 8 May, 2008"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Southern Steel Ltd. & Others vs Jindal Vijayanagar Steel Ltd on 8 May, 2008<\/div>\n
Author: D Bhandari<\/div>\n
Bench: Tarun Chatterjee, Dalveer Bhandari<\/div>\n
           CASE NO.:\nAppeal (crl.)  845-846 of 2008\n\nPETITIONER:\nSouthern Steel Ltd. & Others\n\nRESPONDENT:\nJindal Vijayanagar Steel Ltd\n\nDATE OF JUDGMENT: 08\/05\/2008\n\nBENCH:\nTarun Chatterjee & Dalveer Bhandari\n\nJUDGMENT:\n<\/pre>\n
JUDGMENT<\/p>\n
                                               NON-REPORTABLE<\/p>\n
             IN THE SUPREME COURT OF INDIA<\/p>\n
           CRIMINAL APPELLATE JURISDICTION<\/p>\n
         CRIMINAL APPEAL NOs.     845-846 OF 2008.\n<\/p>\n
          [Arising out of SLP (Crl.) Nos.2351-2352 of 2005]<\/p>\n
Southern Steel Ltd. & Others                        .. Appellants<\/p>\n
                Versus<\/p>\n
Jindal Vijayanagar Steel Ltd.                       ..Respondent<\/p>\n
                         JUDGMENT<\/p>\n
Dalveer Bhandari, J.\n<\/p>\n<\/p>\n
1.   Leave granted in both these Special Leave Petitions.<\/p>\n
2.   These appeals are directed against the judgment dated<\/p>\n
3.1.2005 of the High Court of Karnataka at Bangalore in<\/p>\n
Criminal Petition Nos. 948 and 949 of 2003.
\n                                                          2<\/span><\/p>\n
3.   The brief facts of these appeals are recapitulated as<\/p>\n
under:\n<\/p>\n<\/p>\n
     On the request of the appellants (Southern Steel Ltd.),<\/p>\n
the respondent company (Jindal Vijayanagar Steel Ltd.) had<\/p>\n
supplied HR Coils to the appellants.     The terms of payment<\/p>\n
under the purchase order dated 25.4.1998 granted 45 days<\/p>\n
interest free credit to the appellants for the goods sold and<\/p>\n
delivered by the 1st respondent.    The appellants had issued<\/p>\n
the cheques in question in favour of the respondent company.<\/p>\n
The said cheques were dishonoured on presentation.            In<\/p>\n
response to the legal notice sent by the respondent company,<\/p>\n
the appellants, through two substantially identical replies<\/p>\n
dated 6.4.2000, for the first time, contended that the<\/p>\n
appellants had been declared a sick company on 8.4.1997<\/p>\n
under the provisions of the Sick Industrial Companies (Special<\/p>\n
Provisions) Act, 1985 (for short “SICA”) and, therefore, no legal<\/p>\n
proceedings of recovery of the outstanding amount could be<\/p>\n
initiated against the appellant company.<\/p>\n
4.   It may be pertinent to mention that the purchases were<\/p>\n
made by the appellants from the respondent company after
\n                                                             3<\/span><\/p>\n
the appellant company was declared sick under the provisions<\/p>\n
of SICA.    The appellants could not dispute the fact that the<\/p>\n
purchases were made after the appellant company was<\/p>\n
declared sick under the SICA. The purchases were made<\/p>\n
holding out clear representation that the goods will be paid<\/p>\n
for. Ultimately, on non-payment of the outstanding amount,<\/p>\n
the   respondent   company    initiated   criminal    proceedings<\/p>\n
against the appellant company by filing a criminal complaint<\/p>\n
under section 138 of the Negotiable Instruments Act, 1881.<\/p>\n
5.    The   appellant   company,    aggrieved    by    the       said<\/p>\n
proceedings, filed Criminal Petitions Nos.3225-3226 of 2000<\/p>\n
under section 482 Cr.P.C. for quashing the proceedings under<\/p>\n
section 138 of the Negotiable Instruments Act.          The High<\/p>\n
Court dismissed both these petitions holding that it was<\/p>\n
premature to analyze the entire documentary evidence as put<\/p>\n
forth by both sides to give a finding one way or the other.<\/p>\n
Thereafter, the appellants, subsequent to the directions given<\/p>\n
by the High Court, approached the trial court and produced<\/p>\n
the documents including the order passed by the Board for<\/p>\n
Industrial Financial Reconstruction (for short “BIFR”) under
\n                                                           4<\/span><\/p>\n
section 22-A of SICA.     They sought discharge of the accused<\/p>\n
under section 258 of the Code of Criminal Procedure.<\/p>\n
However,   the   trial   court   dismissed   those   applications.<\/p>\n
Thereafter, the appellants again approached the High Court by<\/p>\n
filing two criminal petitions for quashing           the criminal<\/p>\n
proceedings.\n<\/p>\n<\/p>\n
6.   The appellants placed reliance on the two judgments of<\/p>\n
this court in the matter of BSI Ltd. & Another v. Gift<\/p>\n
Holdings Pvt. Ltd. & Another<\/a> (2000) 2 SCC 737 and Kusum<\/p>\n
Ingots & Alloys Ltd. v. Pennar Peterson Securities Ltd. &<\/p>\n
Others<\/a> (2000) 2 SCC 745.         In the impugned judgment, the<\/p>\n
High Court has dealt with these two judgments along with<\/p>\n
other judgments.     The High Court also accepted the legal<\/p>\n
position that the court has the power to discharge the accused<\/p>\n
or quash the proceedings at mid-stage, but having regard to<\/p>\n
the peculiar facts and circumstances of the case, according to<\/p>\n
the impugned judgment of the High Court, it would not be<\/p>\n
appropriate to interfere. Consequently, both these petitions<\/p>\n
filed by the appellants before the High Court were dismissed.
\n                                                            5<\/span><\/p>\n
7.   The appellants, aggrieved by the impugned order of the<\/p>\n
High Court, preferred these appeals and submitted that the<\/p>\n
appellants’ case is squarely covered by the aforementioned<\/p>\n
cases of Kusum Ingots and BSI Ltd.\n<\/p>\n<\/p>\n
8.   We   have   carefully   analyzed   the   principles   of   law<\/p>\n
enunciated in both these cases, along with other cases, cited<\/p>\n
by Mr. M. L. Verma, learned senior Advocate appearing for the<\/p>\n
appellant company.      There is no quarrel with the legal<\/p>\n
proposition   which   has    been   laid   down   in   both     the<\/p>\n
aforementioned cases, but we are in complete agreement with<\/p>\n
the view taken by the High Court in the impugned judgment<\/p>\n
that in view of the peculiar facts and circumstances of these<\/p>\n
cases, the aforesaid judgments have no application to these<\/p>\n
cases.\n<\/p>\n<\/p>\n
9.   According to the High Court, admittedly the purchase<\/p>\n
orders in question were entered into and the purchases were<\/p>\n
made by the appellants with full knowledge of the proceedings<\/p>\n
that the company was declared sick under the SICA, the<\/p>\n
appellants clearly all through gave the impression to the
\n                                                         6<\/span><\/p>\n
respondent company that the outstanding amount towards<\/p>\n
the purchase of the goods would be shortly cleared. The fact<\/p>\n
that the purchases were made with the clear promise to repay<\/p>\n
could not be disputed by the appellants. The Directors had in<\/p>\n
fact issued the cheques for discharging their liability with the<\/p>\n
full knowledge, would not only clearly show that there was an<\/p>\n
undisputed debt, but would also show that, right from the<\/p>\n
inception, the appellants in fact had no intention of paying the<\/p>\n
amount for the purchases made by them. The intention of the<\/p>\n
appellants can be gathered by their subsequent acts, conduct<\/p>\n
and behaviour of taking a shelter under the provisions of<\/p>\n
SICA.    Hence, the appellants are not entitled to any<\/p>\n
indulgence of this court under its extraordinary jurisdiction<\/p>\n
under Article 136 of the Constitution. The appellants had lost<\/p>\n
their total credibility because of their conduct.    When the<\/p>\n
appellant company was declared sick, then without disclosing<\/p>\n
this fact the appellants ought not to have made huge<\/p>\n
purchases from the respondent company.          Ultimately, the<\/p>\n
appellant company did not pay for the purchases. This clearly<\/p>\n
indicates that the appellants had no intention of making<\/p>\n
payment of the purchases made by it.\n<\/p>\n
                                                                7<\/span><\/p>\n
10.   The High Court, in the impugned order, has directed the<\/p>\n
trial court to dispose of the cases of the appellants as early as<\/p>\n
possible, but not later than six months from the date of its<\/p>\n
order. The appellants by approaching this Court have caused<\/p>\n
avoidable delay in disposal of these cases before the trial<\/p>\n
court.\n<\/p>\n<\/p>\n
11.   In the facts and circumstances of the case, we deem it<\/p>\n
appropriate to request the trial court now to conclude the trial<\/p>\n
of these cases as expeditiously as possible and, in any event,<\/p>\n
within six months from the date of this judgment. We direct<\/p>\n
the parties to appear before the trial Court on 1st July, 2008.<\/p>\n
12.   The trial court is directed to decide these cases without<\/p>\n
being influenced by any observations passed by this court or<\/p>\n
the High Court in the impugned judgment.           These appeals,<\/p>\n
being devoid of any merit, are accordingly dismissed.<\/p>\n
                                         …………………………J.\n<\/p>\n
                                         (Tarun Chatterjee)
\n                                      8<\/span><\/p>\n
               …………………………J.\n<\/p>\n
               (Dalveer Bhandari)
\nNew Delhi;\n<\/p>\n
May 8, 2008<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Southern Steel Ltd. & Others vs Jindal Vijayanagar Steel Ltd on 8 May, 2008 Author: D Bhandari Bench: Tarun Chatterjee, Dalveer Bhandari CASE NO.: Appeal (crl.) 845-846 of 2008 PETITIONER: Southern Steel Ltd. & Others RESPONDENT: Jindal Vijayanagar Steel Ltd DATE OF JUDGMENT: 08\/05\/2008 BENCH: Tarun Chatterjee & Dalveer Bhandari JUDGMENT: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-102308","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nSouthern Steel Ltd. & Others vs Jindal Vijayanagar Steel Ltd on 8 May, 2008 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/southern-steel-ltd-others-vs-jindal-vijayanagar-steel-ltd-on-8-may-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Southern Steel Ltd. & Others vs Jindal Vijayanagar Steel Ltd on 8 May, 2008 - 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