CRL OP/3532/2003 of 1. M/S.CARAVAN CLOTHING CO. Vs ANBU TEXTILES on 24 December 2003

:COMMON ORDER

This order shall dispose of the above two Crl.O.Ps.

2. The respondent/complainant in both the cases, has filed acomplaint alleging that all the four accused are liable to be punished underSection 138 of the Negotiable Instrument Act, since the cheque issued by them,was dishonoured, when tendered for collection, and even, after complying withthe mandatory provision of issue of notice, they failed to pay the chequeamount and in this view, they should be dealt with accordingly.

3. The accused/petitioners 1 to 3 have filed Crl.O.P.No.3532

of 200 3 and 4th accused/petitioner has filed Crl.O.P.No.3236 of 2003 forquashing the proceedings, as if, no case is made out against them; that theconditions contained in the purchase order dated 27.08.2002 is violated; thatthe cheque in question had been issued towards sale price of the first 5,000metres cloth is incorrect, etc.

4. The first accused company had dealings with the complainant/ respondent company in purchasing some cloths. In the firstaccused company, accused 2 to 4 are Directors. As per the complaint, thefirst accused company offered to purchase specialised fabrics and in responseto that offer, the complainant company agreed to supply the requiredmaterials. In pursuance of the same, the first accused company accepted theterms and conditions of the complainant company, followed by supply of goodson the letter of credit basis. It seems, thereafter, the first accusedcompany has not paid amount and there was a balance of Rs.1,50,000/-. Inorder to discharge the liability, it seems, the second accused, representingthe first accused company, issued three cheques dated 07.09.1992, 12.09.1992and 16.09.1992 for a sum of Rs.1,50,000/-, Rs.1,00,000/- and Rs.75,000/-respectively, drawn in the Bank, where the accused company is maintainingtheir account.

5. The complainant company presented the cheque dated 07.09.1992 bearing No.613342 for a sum of Rs.1,50,000/-, for collectionthrough their bank. The cheque was not honoured, because of the fact that thedrawer of the cheque has not provided sufficient fund, in the account tohonour the cheque. Thereafter, as mandated under the law, the holder of thecheque issued notice, demanding the amount due under the above said cheque,but the same was not complied with by paying the amount. It seems, there isno reply also. Therefore, as stated above, a private complaint has beenfiled, and the same was taken on file by the Judicial Magistrate No.1, Maduraiin C.C.No.587 of 2002. Now, the case is pending before the JudicialMagistrate No.1, Madurai. At this stage, these two petitions are filedseparately, for quashing the entire proceedings in C.C.No.587 of 2002.

6. The learned counsel for the petitioners submits that, as

6. The learned counsel for the petitioners submits that, as far as Accused 3 and 4 are concerned, there are no materials to implicate themas accused or to say that the case will end in conviction, even if the trialis allowed to proceed. As seen from paragraph 5 of the complaint, it isstated that, as per the purchase order, Mr.D.Hiran Kumar, that is the thirdaccused, who is one of the Director of the first accused company, undertookthe liability to open letters of credit in favour of the complainant companyon or before 06.09.2002, instead of opening it on 27.08.2002 as demanded bythe complainant company. Except this allegation, I do not find any otherallegation, attracting the ingredients of Section 141 of the NegotiableInstruments Act, so as to say, that the third accused/third petitioner wasalso incharge of the first accused company or attending the day to day affairsor having entire control of the company. It is also not the case of thecomplainant, in the complaint, that the cheque was issued with the knowledgeof the third accused or the offence was committed with the connivance of the third accused. In the absence of any such allegation, convicting the thirdaccused is very remote and therefore, I feel the complaint is liable to bequashed as far as the third accused is concerned, on the ground of absence ofspecific averments, attracting the ingredients under Section 141 of theNegotiable Instruments Act.

7. As far as the petitioner in Crl.O.P.No.3356 of 2003, who is the fourth accused, is concerned, it is his case that he resigned from thefirst accused company on 02.03.2002 and therefore, he is not liable to answerthe claim, made by the complainant, on the basis of the dishonoured cheque.In support of the above contention, form 32 was also produced, which wouldindicate that the fourth accused has resigned from the Directorship on02.03.2002, i.e. six months even prior to the date of issue of the cheque.The fact remains, the cheque was issued on 07.09.2003. This fact is fairlyconceded by the learned counsel for the complainant/respondent. Evenotherwise also, as far as A.4 is concerned, I find no allegation to implicatehim as an accused, so as to say that he is also liable to be dealt with underSection 1 38 of the Negotiable Instruments Act. In this view, the complaintagainst the fourth accused is also not maintainable, since it will not end inconviction, even if the trial is allowed to proceed.

8. As far as A.1 and A.2 are concerned, I find no merit to allow their petition, for quashing the proceedings. The complaint revealsthat the first accused company entered into an agreement with the complainantcompany for the purchase of the goods and admittedly, the cheque was issued bythe second accused, who is managing the first accused company, being thesignatory. Therefore, 1 and 2 accused cannot escape from the liability, onthe ground that there was violation of conditions or something like that.

Even, if there is any violation regarding the agreement or as per the invoice,it is a matter, to be decided only after recording the evidence. On thatground, quashing the complaint does not arise for consideration.

9. For the foregoing reasons, both the petitions are allowed to the above said extent, quashing the proceedings in C.C.No.587 of 2002, asfar as Accused 3 and 4 alone are concerned. The trial Court is directed toproceed against accused 1 and 2 according to law and dispose of the samewithin six months from the date of receipt of a copy of this order.Consequently, connected Crl.M.Ps are closed.

sbi

To1.The Judicial Magistrate No.I,Madurai.

2. The Public Prosecutor,High Court, Madras.