DSL Enterprises Pvt. Ltd & Ors. v. Bank of India & Ors.

Judgment

1. In this application filed under Section 482 of Cr.P.C. applicants praying quashing setting process passed learned Judicial Magistrate, First Class Pune Criminal Case No.154 2003 (old No.461 2000) passed 28/7/2000 offence punishable Section 138 Negotiable Instruments Act, 1881 (N.I. Act short). It useful the relevant facts before examining the merits of the case. 2

2. Applicant no.1-Company has been incorporated Companies Act, 1956 registered office Datar Apartments, Vakilwadi, Nashik 422 001 engaged business production various electronic equipments. It formerly Datar Switchgears Ltd. The applicant no.1 entered agreement business capacitors M/s. Enarai Finance Ltd., Mumbai 30/12/1994 agreement schedule payment rental charges annexed. The quarterly payment towards rental amount commenced April 1995 it was Rs.6,02,850/-. Due 3rd certain disputes differences between parties Enarai Finance Ltd. issued a notice termination Bank 25/8/1997 through Advocate Mumbai. India granted a Cash Credit Facility Rs.2 Crores Enarai Finance Ltd. against security hypothecation capacitors assets said Bank Power The Attorney Holder Enarai Finance Ltd., a Non Banking Financial Company incorporated Companies Act, 1956 registered office Mumbai. (Power Attorney executed Bhandup, 17/11/1994). 3 The applicant no.1 - company issued certain cheques favour Enarai Finance Ltd. amount payable respect capacitors leased cheques Rs.6,02,850/- whereas fourth cheque Rs.99,975/-. Initially cheques deposited dishonoured subsequently remaining cheques were also dishonoured. The cheque details are as under: -------------------------------------------------- Sr.No. Date Cheque No. Amount --------------------------------------------------

3.4.99 395006 6,02,850/-

3.7.99 395007 6,02,850/-

3.10.99 395008 6,02,850/-

3.1.2000 395009 99,975/- -------------------------------------------------- 4

The statutory notice regarding the first two dishonoured cheques issued 19/7/1999 Criminal Complaint No.3581 1999 against same. Whereas dishonour cheque subject matter Criminal Case No.5301

1999. Writ Petition Nos.4530 4531 2006 criminal cases. The subject matter application arises cheque 3/1/2000 amount Rs. 99,975/-. It dishonoured the memo 8/1/2000 received complainant 15/1/2000. The statutory notice Section 142 N.I.Act issued 20/1/2000 it was served accused 23/1/2000. As accused failed neglected amount dishonoured cheque expenses within 15 receipt, Criminal Case No.461 2000 (now Criminal Case No.154 2003) 10/2/2000 issuance process Section 204 of Cr.P.C. came to be passed on 28/7/2000.

4. The order of issuance of process dated 28/7/2000 challenged filing Revision Application Section 397 Cr.P.C. before 5 Sessions Court 8/1/2001 revision rejected 11/11/2002 challenged before Court and, therefore, received finality. It further record applicants application before learned Magistrate recalling process without challenging passed Revisional Court applicants claimed withdrew application Adalat Prasad Vs. Rooplal Jindal & ors. [(2004) [(2004) [(2004) 7 7 7 SCC SCC SCC 338]. 338] 338] Writ Petition No.1151 2004 before Court challenging issuance process 28/7/2000. It appears issuance process passed earlier complaints referred hereinabove challenged in Criminal Writ Petition Nos.1149 and 1150 of 2004.

5. All these three Criminal Writ Petitions came disposed a common October 2005 Court holding remedy petitioners challenge process 25, before Sessions Court filing a revision application Section 397 Cr.P.C. 6 of V.K. Jain & ors. Vs. Pratap V. Padode [2005 [2005 [2005 therefore, granted (3) (3) (3) Mh.L.J.778]. Mh.L.J.778] Mh.L.J.778] Liberty was, applicants prefer revision applications before concerned Sessions Court learned counsel petitioners stated revision applications within weeks. Based statement, Court directed Court proceed a period weeks. It appears learned counsel complainant a statement before solely Court matters argued merits before Sessions Court Sessions Court directed dispose matter merits hearing parties. The applicants, therefore, second Criminal Revision Applications dismissed a common 14/11/2006 passed learned Addl. Sessions Judge Pune. Finally petition 20/12/2006 invoking inherent powers Court Section 482 Cr.P.C. praying quashing setting common passed 14/11/2006 dismissing revision applications as well as the order of process issued on 28/7/2000 in Criminal Complaint No.154 of 2003. 7

6. It was submitted by Mr.Joglekar, the learned counsel applicants issues raised earlier revision applications before Sessions Court petitions before Court. Firstly consequences flowing termination agreement 30/12/1994 Advocate’s notice 25/8/1997 issued behest M/s. Enarai Finance Ltd. If agreement terminated enforceable liability contemplated Section 43 N.I.Act. Consequently Criminal Complaint No.154 required dismissed without 2003 and, therefore, a case made withdraw / recall process 28/7/2000. In regard reliance placed decision Kerala High Court Sudha Beevi Vs. State Kerala [2004 [2004 [2004 Cri.L.J. Cri.L.J. Cri.L.J. 3418] 3418] 3418] pointed decision learned Single Judge Kerala High Court challenged in SLP (Criminal) No.4435 of 2004 and the same was dismissed on 24/3/2006 by the Supreme Court. . Secondly it is contended that on 30/4/2004 and 8 16/5/2004 applicants addressed letters Official Liquidator complainant pressurising alleged Enarai Finance Ltd. further enquired whether complainant-Bank authorised. The applicants letter 3/6/2004 addressed Official Liquidator complainant - Bank. In contended 26/4/1999 Company Petition No.275 1998 Court Original Side passed appointing Official Liquidator Provisional Liquidator M/s. Enarai Finance Ltd. Sections 456 457 Companies Act, 1956 complainant - Bank authority status Criminal Case No.461 2000 (Now Criminal Case No.154 2003). It further alleged complainant - Bank played a Court filing complaint offence Section 138 N.I. Act Official Liquidator custodian property of M/s. Enarai Finance Ltd. Bank Power Attorney Non Banking Financial Company. As applicants, Official Liquidator authority initiate proceedings recovery 9 appointment 26/4/1999 instant criminal complaint having thereafter, a Court asmuchas complainant Bank disclose regarding appointment Official Liquidator Company Petition No.275 1998 Court. Consequently - process issued 28/7/2000 required quashed aside, argued learned counsel applicants. Lastly contended dishonoured cheque issued security and, therefore, within purview Section 138 N.I. Act, placing reliance decision Supreme Court M.S. Narayana Menon alias Mani vs. State of Kerala and 25/10/2005. Even otherwise criminal applications cannot piecemeal contending issues agitated earlier round. The complainant alleged applicants resorting multiple proceedings criminal pending before Chief Judicial Magistrate, First Class Pune. On merits contended Mr.Anturkar entertain application called additional hereinabove. The learned counsel further submitted passed Court 25/10/2005 disposing Writ Petition Nos.1149 1151 2004 cannot provisions Section 397(3) Cr.P.C. though appears element consent purportedly learned Advocate Respondent No.1 - Bank filing criminal revision applications second round and to be decided on merits by the Sessions Court. 11

8. Section 397(3) of Cr.P.C. reads as under: "(3) If an application under this section has been made by any person either to the High Court to the Sessions Judge, no further application by the same person shall be entertained by the other of them." An applicant having a revision application Section 397 before Sessions Court prevented filing a second revision application before High Court. Such a second revision application presented applicants before Court revision application dismissed Sessions Court 11/11/2002 against process 28/7/2000. As earlier Writ Petition Nos.1149 1151 2004 before Court Article 227 Constitution Section 482 Cr.P.C. second application applicants invoked powers Court Section 482 Cr.P.C. rather filing petition Article 227 Constitution Section 482 Cr.P.C. From reading 12 25/10/2005 passed Court disposing Writ Petition Nos.1149 1151 2004 appear Court applicants’ earlier revision applications having rejected 11/11/2002 and, therefore, liberty granted Court approach Sessions Court relief quashing issuance process cannot termed Court impliedly applicants approach Sessions Court second filing revision applications. By reading conjointly scheme Section 397(3) 399(3) Cr.P.C., submitted behalf respondent no.1 second revision application Court i.e. Sessions Court entertained. I application, 25/10/2005 granted liberty applicants approach Sessions Court filing a criminal revision application Section 397 of Cr.P.C. and such an issue could be left open for decision in an appropriate case.

9. The first ground raised by the applicants is regarding effect Advocate’s notice 13 25/8/1997 terminating agreement 30/12/1994 behalf M/s.Enarai Finance Ltd. As rightly contended Mr.Anturkar, learned counsel Bank, available applicants revision applications before Sessions Court a ground applicants approached Sessions Court 8/1/2001. The issues available challenge process cannot allowed piecemeal time. approaching revision Court It safely presumed revision application agitating factual issues, issues dropped challenge same was voluntarily and/or reasons applicants. If piecemeal challenges allowed against process filing revision applications time, unending complaint pending before learned Magistrate inordinately delayed accused resort perpetuate actions defrauding delaying case. Even otherwise notice clearly 14 applicants amount Rs.1,37,89,842/- respondent no.1 - Bank together interest thereon agreed applicants called within 14 receipt notice. In considered opinion, therefore, ground notice 25/8/1997 terminating agreement cannot allowed to be agitated in the second revision application.

10. Now I will consider the second issue regarding consequences appointment Liquidator Court 26/4/1999 Petition No.275 of 1998. Sections 456 and 457 of the Companies Act, 1956 read as under : Official Company "456.456. 456. Custody Custody Custody company’s company’s company’s property property property : Where a winding (1) a provisional liquidator appointed, liquidator provisional liquidator, case may be, custody control, property, effects actionable claims company appears entitled. 15 (1A) For purpose enabling liquidator provisional liquidator, case may be, custody control, property, effects actionable claims company appears entitled, liquidator, provisional liquidator, be, writing request Chief Presidency Magistrate District Magistrate within jurisdiction property, effects actionable claims account documents company found, possession thereof, Chief Presidency Magistrate District Magistrate thereupon notice party, possession property, effects, actionable claims, account documents deliver possession thereof liquidator provisional liquidator. (1B) For purpose securing compliance Chief provisions sub-section (1A), Presidency Magistrate District 16 Magistrate opinion necessary. (2) All property effects company deemed custody Court winding company.

457. 457.457. Powers Powers Powers liquidator liquidator liquidator - (1) The liquidator a winding Court power, sanction Court, - (a) to institute or defend any suit, prosecution, or other legal proceeding, civil or criminal, in the name and on behalf of the company; (b) business company necessary beneficial winding company; (c) immovable and movable property actionable claims company public auction private contract, 17 transfer thereof person corporate, parcels; (d) security assets company requisite; (e) such other things necessary winding affairs company distributing assets. (2) The liquidator a winding up Court - (i) execute, behalf company, deeds, receipts, documents, purpose use, necessary, company’s seal; (ia) to inspect the records and returns of the company on the files of the Registrar without payment of any fee; (ii) prove, 18 insolvency contributory, balance against estate, receive dividends insolvency, respect balance, a separate insolvent, rateably separate creditors; (iii) draw, accept, make endorse exchange, promissory behalf company, effect respect liability company bill, hundi, drawn, accepted, endorsed behalf company course business; (iv) official name, letters administration deceased contributory, official necessary obtaining payment any money contributory estate cannot conveniently company, cases, shall, purpose enabling liquidator 19 letters administration recover money, deemed liquidator himself: Provided that nothing herein empowered shall be deemed to affect the rights, duties and privileges of any Administrator-General; (v) appoint business liquidator unable himself. (3) The exercise by the liquidator in a winding up by the Court of the powers conferred by this section shall be subject to the control of the Court; and any creditor or contributory may apply to the Court with respect to the exercise or proposed exercise of any of the powers conferred by this section." . There is no doubt that the Criminal Case No.461 2000 appointment Official Liquidator 26/4/1999 Respondent No.1-Bank Constituted Attorney M/s. Enarai Finance Ltd. As per Mr.Joglekar, 20 dishonoured cheques custody Respondent No.1 Constituted Attorney property of M/s. Enarai Finance Ltd. Official Liquidator initiated contemplated Section 138 N.I. Act. The Bank steps. cheque 3/4/1999 whereas remaining cheques 26/4/1999. The applicants dispute cheques already possession respondent no.1 - Bank Constituted Attorney M/s. Enarai Finance Ltd. The Official Liquidator a statutory performed within meaning Sections 456 457 Companies Act,

1956. On taking properties, liabilities actionable claims M/s. Enarai Finance Ltd., required discharge functions including recovery financial arising contractual obligations. estopped applying Magistrate, First Class He was, therefore, learned Judicial substituted complainant respondent no.1 option available during criminal complaint. The 21 respondent no.1 a nationalised constituted attorney M/s. Enarai Finance Ltd., cannot blamed cannot attributed motives filing criminal complaint against applicants offence punishable Section 138 N.I. Act it must credited acting custodian public funds. The complaint respondent no.1 capacity constituted attorney, stretch imagination, quashed invoking inherent powers Section 482 Cr.P.C. ground Official Liquidator appointed filing complaint. It unsafe invoke inherent powers Section 482 Cr.P.C. concede a prayer criminal complaints punishable offence Section 138 N.I. Act. The of Krishnan v. Krishnaveni [(1997) [(1997) [(1997) 4 4 4 SCC SCC SCC 241] 241] 241] certainly assists applicants’ approach Court Section 482 Cr.P.C. revision applications by it were dismissed earlier. The Apex Court observed in the said case as under: 22 "Though the revision before the High Court under sub-section (1) of Section 397 is prohibited by sub-section (3) thereof, inherent power of the High Court is still available under Section 482 of the Code and as it is paramount power of continuous superintendence of the High Court under Section 483, the High Court is justified in interfering with the order leading to miscarriage of justice and in setting aside the order of the courts below." . 666 In the case of Rajathi v. C. Ganesan [(1999) [(1999) [(1999) SCC SCC SCC 326] 326] 326] Section 482 the Cr.P.C. exercised sparingly utilised substitute second revision. Ordinarily, revision barred Section 397(3) Code, complainant accused cannot a a allowed recourse revision before High Court Section 397(1) Cr.P.C. prohibited Section 397(3) thereof. However, High Court entertain a petition Section 482 Cr.P.C. a serious miscarriage justice process 23 mandatory provisions complied High Court inherent jurisdiction is to be exercised to correct the mistake committed by the revisional court. . In the instant case the allegations that the Respondent No.1-Bank played a Court learned Judicial Magistrate, First Class filing criminal against applicants 10/2/2000 ill-founded earlier, Official Liquidator / learned Judicial Magistrate, First Class substituted complainant respondent no.1 placing before Court necessary documents support application. When respondent no.1 substituted Official Liquidator complainant against applicants, cannot applicants a miscarriage justice against invoke inherent powers Section 482 Cr.P.C. the criminal case pending before the learned Judicial Magistrate, First Class.

11. In the case of S.M.S. Pharmaceuticals Ltd. 24 process, complaint proceed on merits whether cheques issued security issued discharge liability issues decided basis of the evidence that may be adduced by the parties during the trial of the case.

12. There is one more issue which has been highlighted learned counsel respondent no.1 - Bank, regarding limitation revision application second applicants. Article 131 Limitation Act, 1963 prescribes period 90 limitation filing revision application Code Civil Procedure Code Criminal Procedure, decree sought revised Section 3 sentence Act, application prescribed period dismissed although limitation a defence. In instant revision application, hereinabove, 8/1/2001 rejected / disposed 11/11/2002. It submitted liberty 26 granted cannot termed a go-bye provisions Section 3 Article 131 Limitation Act,1963. This additional handicap revision applicant revision present petitioners revision piecemeal filing purportedly grounds a tendency deserves curbed, learned counsel. There revision applications present applicants second before Sessions Court Section 397 Cr.P.C. beyond limitations, directions Court 25/10/2005 decide revision applications merits, required Sessions Court decide applications merits concession purportedly learned Advocate respondent no.1 - Bank by way consenting revision applications decided merits. The Respondent No.1, therefore, cannot agitate limitation entertaining second revision application now. However, stated entertaining piecemeal revision application limitation application ordinary course 27 additional ground to curb the tendency of filing such applications repeatedly.

13. In the premises there is no case made out by applicants Criminal Case No.154 2003 presently pending before learned Judicial Magistrate, First Class Pune offence punishable Section 138 N.I. Act, invoking inherent powers Court Section 482 Cr.P.C. application threshold. The hereby rejected summarily. Ad-interim relief stands vacated. . Mr. Joglekar submitted an oral application to continue ad-interim relief a period weeks from today. Oral application is hereby rejected. (B.H.MARLAPALLE,J.)