J. VEDHASINGH versus R.M. GOVINDAN & ORS. on 11 August 2022

1. Leave granted.

2. The instant appeal has been filed assailing the final order dated06.12.2018 passed by the High Court of Madras in CRL.O.P. No. 6750of 2017, whereby the High Court allowed the criminal petition filed bythe respondents no.1 to 4 under Section 482 of Code of CriminalProcedure, 1973 (for short “Cr.P.C”) and quashed proceedings underSections 120B, 406, 420 and 34 of the Indian Penal Code, 1860 (forshort “IPC”) being C.C. No. 33 of 2017 pending before JudicialMagistrate Court No. III, Coimbatore.

3. The brief facts necessary for the instant appeal are that theappellant herein was working as a Civil Engineer in Saudi Arabia. On hisreturn back to India in the year 2011, he purchased a site from respondentno.2 who is the father of respondent no.1 in Coimbatore. Apart fromthis, the respondents owned 7 other house sites in total in V.C.K. Layout,Trichy Road, Coimbatore City, which all were mortgaged to Tamil NaduIndustrial Investment Corporation, way back from 12.10.2006. Appellantcontended that the respondents approached and asked him to investmoney for the development of the land of the said 7 sites and assuredthat profit shall be divided amongst the appellant and respondents.Pursuant to it a profit-sharing agreement was executed between theparties. The appellant made the investment of a sum of Rs.62,32,754/-,but neither profit was shared nor any piece of land was given to theappellant. Consequently, the appellant asked to repay the amount. Underguise of assurance of re-payment by respondent no.1, the appellant didnot lodge any criminal prosecution as per his request. The respondentno.1 handed over a cheque dated 09.09.2015 for an amount ofRs.87,00,000 in lieu of repayment of principal sum and interest.

4. On presenting the said cheque to the bank it was dishonored onaccount of insufficient funds on 09.09.2015. Being aggrieved, a demandnotice was issued on 30.10.2015 and complaint under Section 138 ofNegotiable Instruments Act, 1881 (for short “NI Act”) being S.T.C.No.792 of 2015 renumbered as C.C. No.199 of 2016 on the file of Fast A

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ATrack Magistrate No.1 of Coimbatore (for short “138 Proceedings”)was lodged by the appellant on 07.12.2015. Prior to initiating 138proceedings, the appellant lodged a complaint under section 156(3) Cr.P.Cbeing CMP No. 5083 of 2015 before Judicial Magistrate No. IIICoimbatore on 30.10.2015. The Magistrate directed respondent no. 5 toregister the FIR but by filing a report dated 29.01.2016, it was said thatBno offence is made out against the respondents. The appellant challengedthe same by filing CRL.O.P. No. 6766 of 2016 before the High court ofMadras and also prayed for direction against respondent no.5 to conductfresh investigation. The High Court disposed of the same with anobservation that the appellant may raise objection on closure report byCway of protest petition. In pursuance thereof, the appellant filed a protestpetition being Crl.M.P. No. 3891 of 2016, which was allowed by theMagistrate vide order dated 24.09.2016 directing the respondent no. 5 toregister the case against the respondent no. 1 to 4 and to complete theinvestigation. Thereafter only, the respondent no.5 registered the caseagainst respondent no.1 to 4 at Crime No.49 of 2016 for the offencesDunder Sections 120B, 406, 420 and 34 of IPC on 01.10.2016, and afterinvestigation, challan was filed before the competent Magistrate on whichcognizance was taken by him.

5. The respondents, being aggrieved by the same, filed CRL.O.P.No. 6750 of 2017 before the High Court of Madras for quashment ofEthe aforesaid proceedings. The High Court by the impugned order allowedthe said petition and quashed the proceedings taking into considerationthat proceedings under Section 138 of the N.I. Act pertaining to thesame cause of action and on the same facts and grounds are pending,prior to the registration of the present proceedings. It was observed that,Flooking to the allegations made in the FIR, only offence under section138 of NI Act can be made out and continuance of the present proceedingsfor offences under sections 406, 420, 120B and 34 of IPC would amountto abuse of process of the Court. The said order passed by the HighCourt is assailed by the appellant in the instant appeal.G6. Learned senior counsel Mr. S. Nagamuthu contends that in thefacts of the present case the plea of double jeopardy or bar of Section300(1) of Cr.P.C. would attract only when the earlier offence and thelater offence is same or have same ingredients. The identity of theallegations on fact is not relevant, in fact, the identity of the ingredientsof the offence is relevant. The plea taken by respondent no.1 to 4 that aH

person who is previously acquitted cannot be tried for the same offencesubsequently, shall apply only when it is shown that acquittal for theprevious charge would lead to acquittal in the subsequent charge. In anoffence under Section 138 of the NI Act, requirement to prove mensrea is not necessary although for an offence under Section 420, fraudulentand dishonest intention i.e. mens rea is relevant to prove. In support ofthe said contention, reliance has been placed on the judgment ofSangeetaben Mahendrabhai Patel v. State of Gujarat and Anr, (2012)7 SCC 621. The said judgment has also been relied in the case of M/sV.S. Reddy and Sons v. Muthyala Ramalinga Reddy and Anr. (CrlAppeal No. 1285 of 2015) decided on 28.09.2015. Therefore, urged thequashment of the proceedings for an offence under Sections 420, 406,120(B) and 34 IPC as directed by the High Court is wholly unjustified.

7. On the other hand, learned counsel for the respondents contendsthat as per the judgment of Kolla Veera Raghav Rao v. GorantlaVenkateswara Rao and Anr, (2011) 2 SCC 703, this Court has heldthat if the offences are different and the facts are the same, theprosecution under Section 420 of the IPC is barred by virtue of Section300(1) of the Cr.P.C. Further reliance has been placed on a judgment ofthis Court in the case of G. Sagar Suri and Anr. v. State of UP andOthers, (2000) 2 SCC 636, wherein also the offences under Section138 of NI Act as well as the offence under Sections 406 and 420 of IPCwere allegedly committed by the accused of that case. After lodging thecomplaint under Section 138 of NI Act, a petition under Section 482before the High Court was filed for quashment of the complaint whichwas dismissed. On filing the special leave petition before this Court, itwas allowed and the Court directed that the prosecution under Sections420 and 406 is not tenable and quashed.

8. After having heard learned counsel appearing on behalf of theappellant as well as the respondents who have advanced their contentionsrelying upon the judgments of this Court. The reliance placed by theappellant is on a judgment of Sangeetaben Mahendrabhai Patel(supra) wherein this Court has considered various judgments. Therelevant portion of the judgment of Sangeetaben Mahendrabhai Patel(supra) is reproduced as thus:

“35. The learned counsel for the appellant has further placedreliance on the judgment in G. Sagar Suri v. State ofU.P. [(2000) 2 SCC 636 : 2000 SCC (Cri) 513] wherein during AB

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the pendency of the proceedings under Section 138 of the NIAct, prosecution under Sections 406/420 IPC had beenlaunched. This Court quashed the criminal proceedings underSections 406/420 IPC, observing that it would amount to theabuse of process of law. In fact, the issue as to whether theingredients of both the offences were same, had neither beenraised nor decided. Therefore, the ratio of that judgment doesnot have application on the facts of this case.

36. Same remained the position so far as the judgment in KollaVeera Raghav Rao v. Gorantla Venkateswara Rao [(2011) 2SCC 703 : (2011) 1 SCC (Cri) 882 : (2011) 1 SCC (Civ) 547]is concerned. It has been held therein that once the convictionunder Section 138 of the NI Act has been recorded, thequestion of trying the same person under Section 420 IPC orany other provisions of IPC or any other statute is notpermissible being hit by Article 20(2) of the Constitution andSection 300(1) CrPC.

37. Admittedly, the appellant had been tried earlier for theoffences punishable under the provisions of Section 138 ofthe NI Act and the case is sub judice before the High Court.In the instant case, he is involved under Sections 406/420read with Section 114 IPC. In the prosecution under Section138 of the NI Act, the mens rea i.e. fraudulent or dishonestintention at the time of issuance of cheque is not required tobe proved. However, in the case under IPC involved herein,the issue of mens rea may be relevant. The offence punishableunder Section 420 IPC is a serious one as the sentence of 7years can be imposed.

38. In the case under the NI Act, there is a legal presumptionthat the cheque had been issued for discharging theantecedent liability and that presumption can be rebutted onlyby the person who draws the cheque. Such a requirement isnot there in the offences under IPC. In the case under the NIAct, if a fine is imposed, it is to be adjusted to meet the legallyenforceable liability. There cannot be such a requirement inthe offences under IPC. The case under the NI Act can onlybe initiated by filing a complaint. However, in a case underIPC such a condition is not necessary.

39. There may be some overlapping of facts in both the casesbut the ingredients of the offences are entirely different. Thus,the subsequent case is not barred by any of the aforesaidstatutory provisions.

40. The appeal is devoid of any merit and is accordinglydismissed.”

On perusal of the same, it is clear that the judgment of G. SagarSuri (supra) has been considered but because the issue regarding theingredient of both offences were same was not raised or decided, it hasbeen said that the ratio of that judgment does not have application in thefacts of the case. Similarly, the judgment of Kolla Veera Raghav Rao(supra) has also been considered but distinguished on fact while observingthat when a conviction under Section 138 of the NI Act has been recorded,the prosecution to try the same person under Section 420 of the IPC isnot permissible as per Section 300(1) of Cr.P.C. The judgment ofSangeetaben Mahendrabhai Patel (supra) has been relied in the caseof M/s. V.S. Reddy and Sons (supra).

9. Learned counsel for the respondents have relied upon thejudgment of G. Sagar Suri (supra) and contended that the said issuehas been settled more than two decades prior. The relevant paragraphsof the said judgment are reproduced as thus:

“13. In the circumstances of the case in hand the conclusionis inescapable that invoking the jurisdiction of a criminalcourt for allegedly having committed offences under Sections406/420 IPC by the appellants is certainly an abuse of theprocess of law. In the counter-affidavit filed on behalf of thecomplainant it is now admitted that none of the two appellantsis a Director of Ganga Automobiles Ltd. Only in respect ofthe first appellant it is stated that he is the authorised signatoryof that Company and that in fact he had signed the chequeswhich were returned dishonoured. Apart from making theomnibus statement that the first appellant with dishonestintentions and misrepresentations got a loan of Rs 50,00,000from the complainant Company for Ganga Automobiles Ltd.there is nothing said as to what were those misrepresentationsand how the complainant Company was duped. The only partattributed to the second appellant is that the first appellant A

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along with Ashwani Suri, Managing Director and MukenderSingh, Director approached the complainant in June 1996and had represented that they and Shalini Suri, Shama Suri(Appellant 2), Charanjit Singh and M.L. Kampani were theDirectors of Ganga Automobiles Ltd. There is nothing statedin the counter-affidavit about the role, if any, played by thesecond appellant. A complaint under Section 138 of theNegotiable Instruments Act has already been filed by thecomplainant. There is no allegation of any corrupt practiceby any of the accused as if they duped the Finance Companyin parting with the amount of Rs 50,00,000. As normallyunderstood, the business of a finance company is to invitedeposits, pay interest on that and also to give loans and earninterest. A finance company also advances short-term loans.In that case it is essentially a commercial transaction. Afterthe first two cheques were dishonoured two cheques wereagain issued, which again were dishonoured resulting in filingof complaint under Section 138 of the Negotiable InstrumentsAct. None of the respondents has been able to explain as towhy offences under Sections 406/420 IPC were not added inthe complaint filed under Section 138 of the NegotiableInstruments Act and why resort was had to filing of a separatefirst information report. A certain motive has been attributedto the investigating officer but we think we need not go intothat. There is also no answer as to why the investigationagainst the three other Directors was still stated to be pendingwhen the same role is assigned to all the accused. In the FIRit is Sukhvinder Singh, who first approached the complainant,but later it is Mukender Singh. There is no answer as to whythere are two different names. As to who are the Directors ofGanga Automobiles Ltd. could have been easily found by thecomplainant after going through the records of the Registrarof Companies and also about its status. As noted above, inthe subsequent statement by the complainant he does notassign any role to the first appellant. The allegation that inthe first instance three persons contacted the complainantCompany, who told the complainant of other Directors withwhom the complainant conversed on telephone appears tobe rather improbable.

J. VEDHASINGH v. R.M. GOVINDAN & ORS.[J. K. MAHESHWARI, J.]

J. VEDHASINGH v. R.M. GOVINDAN & ORS.[J. K. MAHESHWARI, J.]

14. We agree with the submission of the appellants that thewhole attempt of the complainant is evidently to rope in allthe members of the family particularly those who are theparents of the Managing Director of Ganga Automobiles Ltd.in the instant criminal case without regard to their role orparticipation in the alleged offences with the sole purpose ofgetting the loan due to the Finance Company by browbeatingand tyrannising the appellants with criminal prosecution. Acriminal complaint under Section 138 of the NegotiableInstruments Act is already pending against the appellants andother accused. They would suffer the consequences if offenceunder Section 138 is proved against them. In any case thereis no occasion for the complainant to prosecute the appellantsunder Sections 406/420 IPC and in his doing so it is clearlyan abuse of the process of law and prosecution against theappellants for those offences is liable to be quashed, whichwe do.

15. The appeal is allowed and the judgment of the High Courtdated 6-5-1999 is set aside and prosecution of the appellantsunder Sections 406/420 IPC in Criminal Case No. 674 of 1997(now Criminal Case No. 6054 of 1998) and pending in theCourt of Chief Judicial Magistrate, Ghaziabad is quashed.”

10. Similarly in the case of Kolla Veera Raghav Rao (supra)this Court reaffirmed the view taken in the said case. The relevantparagraphs are reproduced as thus:

“4. It may be noticed that there is a difference between thelanguage used in Article 20(2) of the Constitution of Indiaand Section 300(1) CrPC. Article 20(2) states:

“20. (2) No person shall be prosecuted and punished for thesame offence more than once.”

On the other hand, Section 300(1) CrPC states:

“300. Person once convicted or acquitted not to be tried forsame offence.—(1) A person who has once been tried by acourt of competent jurisdiction for an offence and convictedor acquitted of such offence shall, while such conviction oracquittal remains in force, not be liable to be tried again forthe same offence, nor on the same facts for any other offence AB

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for which a different charge from the one made against himmight have been made under sub-section (1) of Section 221,or for which he might have been convicted under sub-section(2) thereof.”

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5. Thus, it can be seen that Section 300(1) CrPC is widerBthan Article 20(2) of the Constitution. While Article 20(2) ofthe Constitution only states that “no person shall be prosecutedand punished for the same offence more than once”, Section300(1) CrPC states that no one can be tried and convictedfor the same offence or even for a different offence but onthe same facts.

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6. In the present case, although the offences are different butthe facts are the same. Hence, Section 300(1) CrPC applies.Consequently, the prosecution under Section 420 IPC wasbarred by Section 300(1) CrPC.”

D11. In that case, on similar set of allegations, cognizance underSection 138 of NI Act on filing a private complaint was taken and accusedwere tried, while in other complaint it is alleged that the offence underSections 406 and 420 is also made out, however, as directed by Courtseparate prosecution was lodged. On filing the quash petition, this Courtheld that on the same set of allegations two different offences i.e., underENI Act and IPC cannot be proceeded with and the proceedings underSections 420 and 406 of IPC is liable to be quashed.

12. On perusal of the judgment of Sangeetaben MahendrabhaiPatel (supra) relied in the case of M/S. V.S. Reddy and Sons (supra)by the appellant and the judgments relied upon by the respondents in theFcase of G. Sagar Suri (supra) and Kolla Veera Raghav Rao (supra) as afore quoted, the facts and the allegations were similar and that toothe prosecution for the offences under Section 138 of the NI Act and,under Sections 406 and 420 of the IPC were also similar. In the judgmentof Sangeetaben Mahendrabhai Patel (supra) it was held that theGrequirement to prove an offence under the NI Act and an offence underthe IPC is different, and it was observed that there may be someoverlapping of facts but the ingredients of the offences are entirelydifferent, therefore, the subsequent cases are not barred by any statutoryprovisions. While in the case of G. Sagar Suri (supra) and Kolla VeeraRaghav Rao (supra), the Court concluded that as per Section 300(1)H

Cr.P.C. no one can be tried and convicted for the same offence or evenfor a different offence on the same facts, therefore, the prosecutionunder Section 420 of the IPC is barred by Section 300(1) of Cr.P.C andaccordingly liable to be quashed. It is to observe that in the case ofSangeetaben Mahendrabhai Patel (supra) the judgments of G. SagarSuri (supra) and Kolla Veera Raghav Rao (supra) have been referredbut distinguished on the ground that it was not raised and decided thatingredients of both offences were not same, and the bar of Section 300(1)of Cr.P.C. would not attract. It is relevant to note here that the judgmentscited by both the parties are rendered by benches having the strength oftwo Judges. In our considered view, the bench of this Court in the caseof Sangeetaben Mahendrabhai Patel (supra) followed in M/s. V.S.Reddy and Sons (supra) has taken a different view from the previousjudgments of G. Sagar Suri (supra) and Kolla Veera Raghav Rao(supra) rendered by the bench of the same strength. The view taken inboth the cases are conflicting to each other. Needles to observe that it isa trite law, if any issue is decided in a previous judgment by a bench ofthe same strength, conflicting view in the subsequent judgment shouldnot be rendered on the pretext that the issue has not been raised orconsidered in the previous judgment. In this regard the judgment in DistrictManager, APSRTC, Vijaywada v. K. Sivaji, (2001) 2 SCC 135,Chandra Prakash v. State of U.P., 2002 AIR SCW 1573 can beprofitably referred whereby it is observed that judicial decorum demandsthat if judgments passed by two-judges’ bench of equal strength areconflicting, the issue of law involved must be referred to a larger benchas the same is desirable to avoid confusion and maintain consistency oflaw. In our view, the aforesaid judgments cited by the respective partiesare conflicting, however, to avoid any further confusion and to maintainconsistency, we deem it appropriate to refer this issue for decision bythe larger bench to answer the following questions:

(1) Whether the ratio of the judgment, in the case of G. SagarSuri (supra) and Kolla Veera Raghav Rao (supra) lay down the correctlaw?

or

The view taken in the case of Sangeetaben Mahendrabhai Patel(supra) as followed in M/s V.S. Reddy and Sons (supra) which issubsequent and conflicting, lay down the correct proposition of law?

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[2022] 6 S.C.R.

A(2) Whether on similar set of allegations of fact the accused canbe tried for an offence under NI Act which is special enactment andalso for offences under IPC unaffected by the prior conviction or acquittaland, the bar of Section 300(1) Cr.P.C. would attract for such trial?

13. In view of the above discussion, in our view, the judgmentsBrelied by learned counsel for both the parties are in conflict with eachother on the legal issue. Therefore, the above questions of law havebeen formulated for answer by a larger bench for decision. In suchcircumstances, we request the Registry to place the file before Hon’blethe Chief Justice of India for orders.

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Bibhuti Bhushan Bose

Referred to larger Bench.

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