M.G.Murugan & Ors. v. M/s.Cholamndalam Investment Finance Company Limited

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 18.07.2008CORAMTHE HONOURABLE MR. JUSTICE K.N. BASHACrl.O.P.No.29554 of 2004M.P.No.9269 of 20041.G.Murugan2.G.Ganesan.. Petitioners/AccusedVs.M/s.Cholamndalam Investment Finance Company Limited, TIAM House,28, Rajaji Salai,Chennai - 600 001,Represented by its Legal Co-ordinatorMr.M.K.Hem Kumar.. Respondent/Complainant* * *Prayer :Criminal Original Petition filed under Section 482 ofCr.P.C. to call for the records from the Hon'ble VII MagistrateCourt, George Town, Chennai, relating to the petition filed inC.C.No.11486 of 2003 on the file of VII Metropolitan Magistrate'sCourt, George Town, Chennai and quash the same.* * *For Petitioners: Mr.K.M.VenugopalFor Respondent: Ms.R.Sudha, Legal Aid CounselO R D E RThe learned counsel for the petitioners submitted that thepetitioners have come forward with this petition seeking for therelief of quashing the proceedings initiated against the petitionersin C.C.No.11486 of 2003 on the file of the learned VII MetropolitanMagistrate, George Town, Chennai, on the basis of the complaintpreferred by the respondent for the alleged offence under Section 138of the Negotiable Instruments Act. https://hcservices.ecourts.gov.in/hcservices/

2. It is contended that admittedly there was a hire-purchaseagreement for the purchase of a vehicle by the petitioners and thepetitioners had also issued post-dated cheques in favour of therespondent/complainant. It is submitted that the respondent has alsoalready on the ground of default in payment of instalments initiatedaction and seized the vehicle and the vehicle was already sold andthe amount was realised by the respondent/complainant. The learnedcounsel for the petitioners also submitted that, therefore, there isabsolutely no existence of liability on the part of the petitionersin respect of the disputed dishonoured cheques involved in this case.It is submitted that out of 36 cheques, the complainant has presentedonly six cheques. Therefore, it is contended by the learned counselfor the petitioners that there is absolutely no legally enforceableliability on the part of the petitioners to therespondent/complainant on the basis of the hire-purchase agreement.Therefore, it is submitted that the proceedings initiated against thepetitioners is liable to be quashed.3. Per contra, Ms.R.Sudha, learned counsel who has appointed aslegal aid counsel for the respondent, vehemently contended that thereare specific and definite allegations made in the complaint. It issubmitted by the learned counsel for the respondent that even in thecomplaint it was specifically mentioned about the hire-purchaseagreement as well as seizing the vehicle of the petitioners on theground of default in payment of instalments towards the dues. It ispointed out by the learned counsel for the respondent that even afterthe seizure and sale of the vehicle, there was remaining amount to bepaid by the petitioners and as such, there is subsisting liability onthe part of the petitioners and hence, the respondent was constrainedto file a complaint for the offence under Section 138 of theNegotiable Instruments Act in respect of the dishonour of six chequeswhich were clearly mentioned with the dates and amounts in thecomplaint itself. Therefore, it is submitted that in view of Section139 of the Negotiable Instruments Act, the burden is on the accusedto rebut the presumption only at the time of trial and the questioninvolved is one of fact and not of law and therefore, it is submittedthat the petition for quashing is liable to be dismissed.4. I have carefully considered the rival contentions put forwardby either side and also perused the impugned complaint.5. The admitted case of the petitioners as well as therespondent/complainant is that there was a hire-purchase agreemententered into between the petitioners and the respondent/complainant.The only ground raised by the petitioners for seeking the relief ofquashing the proceedings is to the effect that already the vehicle ofthe petitioners was seized on the ground of default in payment ofinstalments and thereafter, the respondent/complainant company sold https://hcservices.ecourts.gov.in/hcservices/ the vehicle and also realised the amount. The learned counsel forthe petitioners submitted that the hire-purchase agreement itself isterminated in view of the seizure and sale of the vehicle. However,considering the submissions of both sides, the undisputed factremains on the perusal of the impugned complaint is that there is aspecific averment made in the complaint itself to the effect of hire-purchase agreement entered between the parties and default committedby the petitioners and thereafter the vehicle was seized as per theclause and condition contained in the hire-purchase agreement andultimately selling the vehicle and realising the amount to the extentfrom the sale proceeds. It is mentioned in the complaint that afteradjusting the said amount from the sale of the vehicle, there wasstill dues to be paid by the petitioners and as such the six chequesinvolved in the complaint were presented and the same weredishonoured and as such the respondent/complainant is constrained tofile the present complaint. Therefore, it is crystal clear from thereading of the complaint that there was a specific mention about thesubsisting liability. It is also relevant to refer Section 139 ofthe Negotiable Instruments Act which contemplates presumption asreads hereunder :"Section 139. Presumption in favour of holder – Itshall be presumed, unless the contrary is proved, that theholder of a cheque received the cheque, of the naturereferred to in section 138, for the discharge, in whole orin part, of any debt or other liability."Therefore, it is very clear from the above said provision that oncethe cheque is issued by the accused in favour of the complainant ithas to be presumed that the cheque is issued only towards the legallyenforceable liability. Of course, the presumption contemplated underSection 139 of the Negotiable Instruments Act, is a rebuttable oneand it is open to the petitioners to rebut the presumption by placingreliance on the materials available on record. 6. The Hon'ble Apex Court in M/s.M.M.T.C.Ltd. V. M/s.MedchlChemicals & Pharma (P) Ltd., reported in AIR 2002 SC 182 has heldthat,"Inherent power of quashing criminal proceedings shouldbe exercised very stringently and with circumspection. Courtexercising inherent powers is not justified in embarking uponan enquiry as to the reliability or genuineness or otherwiseof the allegations made in the complaint. The inherentpowers do not confer an arbitrary jurisdiction on the Courtto act according to its whim or caprice. At this stage theCourt could not have gone into merits and/or come to aconclusion that there was no existing debt or liability and https://hcservices.ecourts.gov.in/hcservices/ quash complaint. It is not necessary to allege specificallyin the complaint that there was a subsisting liability and anenforceable debt and to discharge the same, the cheques wereissued. There is therefore no requirement that thecomplainant must specifically allege in the complaint thatthere was a subsisting liability. The burden of proving thatthere was no existing debt or liability was on therespondent. This they have to discharge in the trial. Atthis stage, merely on basis of averments in the Petitionsfiled by them the High Court could not have concluded thatthere was no existing debt or liability." 7. The Hon'ble Apex Court in the decision cited supra has clearlyheld that it is not necessary to allege specifically in the complaintthat there was a subsisting liability and enforceable debt. But asfar as the instant case is concerned, as already pointed out, in thecomplaint it is clearly mentioned that even after seizing the vehicleand selling the same and after realising the amount from the saleproceeds, there was further amount due to be paid to the complainantand as such the cheques involved in this case have been presented andthe same were said to have been dishonoured by the accused.Therefore, it is open to the petitioners, as already pointed out, torebut the presumption contemplated under Section 139 of theNegotiable Instruments Act at the time of trial and also to raise allthe points raised before this Court, before the learned trialMagistrate. 8. Considering the submission of the learned counsel for thepetitioners to the effect that the petitioners are the residents ofSivakasi and the impugned complaint is now pending on the file of thelearned VII Metropolitan Magistrate, George Town, Chennai, and assuch the petitioners are facing difficulty to appear before thelearned Magistrate periodically for all the dates of hearings, thisCourt is constrained to dispense with the personal appearance of thepetitioners on condition that the petitioners shall appear before theCourt as and when required by the learned VII MetropolitanMagistrate, George Town, Chennai, for the purpose of trial. It isalso made clear that the petitioners shall give full co-operation forthe speedy disposal of the case. 9. Considering the fact that the case itself relates to the year2003, this Court is also constrained to direct the learned VIIMetropolitan Magistrate, George Town, Chennai, to expedite the trialas expeditiously as possible and more particularly within a period ofsix months from the date of receipt of a copy of the order of thisCourt. https://hcservices.ecourts.gov.in/hcservices/

10. Before parting with this petition, this Court place it onrecord the commendable service rendered by Ms.R.Sudha, learnedcounsel who has appeared as legal aid counsel for the respondent andargued the matter effectively and also placed the authorities insupport of her contention. The learned counsel is entitled to get asum of Rs.3,500/- (Rupees three thousand five hundred only) asremuneration from the Madras High Court Legal Services Authority,High Court, Chennai.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.ggTo1. The VII Metropolitan Magistrate, George Town, Chennai.2. -do-thro Chief Metropolitan Magistrate, Chennai.3. The Secretary, Madras High Court Legal Services Authority, High Court, Chennai.+ 1 CC To Mr.K.M.Venugopal, Advocate SR NO.38788+ 1 CC To Mrs.R.Sudha Advocate SR NO.38534 Crl.O.P.No.29554 of 2004 and M.P.No.9269 of 2004MRD {CO}TP/1.8.08