CRLRC/495/2005 of M/s Asset Reconstruction Company of India Ltd., (ARCIL) Vs M/s Jaya Lakshmi Spinning Mills Ltd., on 30 December 2011

ORDER:

Heard Sri Tharur, the learned counsel appearing for petitioner andthe learned Additional Public Prosecutor.

2. The point which is raised in this criminal revision whether thepetitioner which is M/s.Asset Reconstruction Company of India Limitedcan substitute itself in place of complainant in a prosecution for anoffence under Section 138 of the Negotiable Instruments Act, 1881 (forshort the Act) relating to a cheque bouncing offence brought earlier bythe ICICI Bank Limited against the respondents 1 and 2 herein.

3. The point arises in the following circumstances. It is seen from theimpugned order of the learned V Additional Munsif Magistrate, Gunturthat earlier the ICICI Bank Limited filed a criminal case i.e. C.C.No.154of 2004 in the said court alleging an offence punishable under Section138 of the Act i.e. a cheque bouncing offence against the respondents 1and 2 herein. The version of ICICI bank was that respondents 1 and 2gave the cheque in connection with some amounts owed by them to it. Subsequently, it is the plea of the petitioner that ICICI Bank Limited soldaway or transferred the undertaking or business and all its assetsbelonging to respondents 1 and 2 to it. In view of this the petitioner now says that it is entitled to prosecute the cheque bouncing offence alsowhich is earlier instituted by the ICICI Bank Limited.

4. Sri Tharur argued that according to Section 5(4) of theSecuritization and Reconstruction of Financial Assets and Enforcementof Securities Interests Act, 2002 (for short SARFAESI Act) it is entitledto go on record and substitute itself in place of the complainant in theaforesaid prosecution launched on a complaint. Section 5(4) of theSARFAESI Act reads as follows:

“If, on the date of acquisition of financial asset under sub-section (1),any suit, appeal or other proceeding of whatever nature relating to thesaid financial asset is pending by or the third proviso to sub-section(1) of Section 15 of the Sick Industrial Companies (SpecialProvisions) Act, 1985 (1 of 1986) the same shall not abate, or bediscontinued or be, of financial asset by the securitisation companyor reconstruction company, as the case may be, but the suit, appealor other proceeding may be continued, prosecuted and enforced byor against the securitisation company or reconstruction company, asthe case may be.”

The language of Section 5(4) of the SARFAESI Act would indicate thatthe company which acquires the assets of another company under theprovisions of the SARFAESI Act can prosecute only civil proceedingsrelating to the financial assets of the company which were transferred tothe acquired company. The said provision nowhere says that it isapplicable to the pending criminal prosecutions also.

5. It may be noted that nobody can transfer a criminal prosecutioninstituted on a complaint for an offence under Section 138 of the Act to athird party and at best if the original complainant dies only his or its legalrepresentative can continue it but not a third party. In a case relating toan offence under Section 138 of the Act, the aggrieved person to instituteprosecution can be the payee or the holder-in-due course of the cheque in question and ICICI bank was the payee. Admittedly the petitioner isnot the payee or the holder-in-due course of the cheque and it thereforefollows that it cannot seek its substitution in place of the originalcomplainant in the aforementioned C.C.No.154 of 2004. No legalposition or any decision has been brought to my notice to accept thepetitioner’s contention.

6. For the aforesaid reasons, it follows that the order of the learnedMagistrate does not suffer from any illegality or infirmity and this revisionis accordingly dismissed.

30[th] December, 2011Tjmr

___________________________

JUSTICE N.RAVI SHANKAR

THE HON’BLE SRI JUSTICE N.RAVI SHANKAR

CRIMINAL REVISION CASE NO.495 OF 2005

DATE: 30.12.2011