Galaxy Ameze Kingdom & Palanichami v. Z.M. Zachariah & State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN** ## **FRIDAY, THE 27TH DAY OF JUNE 2014/6TH ASHADHA, 1936`** ## **Crl.MC.No. 6277 of 2013** ## **----------------------------------** ## **C.C.NO. 255/2009 OF JUDICIAL FIRST CLASS MAGISTRATE COURT - I, ALUVA --------------** **PETITIONERS / ACCUSED 1 & 2 : -----------------------------------------------** **1. M/S.GALAXY AMEZE KINGDOM, AISWARYA GARDENS NO.14, MAIN STREET, VENUGOPAL NAGAR, CHENNAI.** **2. M.P.PALANICHAMI, MANAGING DIRECTOR, M/S.GALAXY AMEZE KINGDOM, AISWARYA GARDENS NO.14 MAIN STREET, VENUGOPAL NAGAR, CHENNAI.** - **BY ADVS.SRI.P.VENUGOPAL (1086/92) SRI.M.REVIKRISHNAN** ## **RESPONDENTS / COMPLAINANT AND STATE :** **-------------------------------------------------------------------** **1. Z.M.ZACHARIAH, PROPRIETOR, M/S.CHEERAN'S CANDLE INDUSTRIES, MARKET ROAD, ALUVA, ERNAKULAM DISTRICT.** **2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** - **R1 BY ADV. SRI.S.MURALI R2 BY PUBLIC PROSECUTOR SMT.P.MAYA** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 12-06-2014, THE COURT ON 27-06-2014 PASSED THE FOLLOWING:** Msd. ## **CRL.MC.NO. 6277 OF 2013** ## **--------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' ANNEXURES:** **ANNEXURE A : CERTIFIED COPY OF THE PRIVATE COMPLAINT IN C.C.NO.255/2009 OF THE JUDICIAL FIRST CLASS MAGISTRATE COURT I, ALUVA. ANNEXURE B : TRUE COPY OF THE COMMUNICATION DATED 07/05/2004 ISSUED BY THE 1ST PETITIONER THROUGH ITS ADMINISTRATIVE OFFICER, TO THE 1ST RESPONDENT. ANNEXURE C : TRUE COPY OF THE COMMUNICATION DATED 28/10/2004 ISSUED BY THE 1ST PETITIONER TO THE 1ST RESPONDENT. ANNEXURE D : TRUE COPY OF THE REPLY NOTICE DATED 14/10/2004 ISSUED BY THE PETITIONERS TO THE 1ST RESPONDENT.** ## **RESPONDENT(S)' ANNEXURES:** **ANNEXURE R1 : TRUE COPY OF THE AGREEMENT OF APPOINTMENT OF DISTRICT CHANNEL PARTNER ENTERED INTO BETWEEN PETITIONER/ACCUSED AND 1ST RESPONDENT DATED 14.05.2003.** **ANNEXURE R2 : TRUE COPY OF PAYMENT RECEIPT ISSUED BY THE PETITIONER/ACCUSED M/S GALAXY AMEZE KINGDOM LTD DATED 10.07.2003. ANNEXURE R3 : LETTER SENT BY THE 1ST RESPONDENT TO THE PETITIONER/ACCUSED M/S GALAXY AMEZE KINGDOM LTD DATED 20.08.2003. ANNEXURE R4 : LETTER SENT ON BEHALF OF PETITIONER/ACCUSED M/S GALAXY AMEZE KINGDOM LTD DATED NIL REGARDING AMOUNTS PAID AND FINAL AMOUNTS TO BE SETTLED. ANNEXURE R5 : LETTER ISSUED BY PETITIONER/ACCUSED COMPANY DATED 02.11.2004. //TRUE COPY//** **P.S.TO JUDGE.** Msd. **K. RAMAKRISHNAN, J.** ................................................. Crl.M.C.No.6277 of 2013 .................................................. Dated this the 27[th] day of June, 2014. ## **O R D E R** Accused 1 and 2 in C.C.No.255/2009 on the file of the Judicial First Class Magistrate Court-I, Aluva have filed this Criminal Miscellaneous Case seeking to quash the proceedings under Section 482 of the Code of Criminal Procedure (hereinafter referred to as 'the Code'). 2. The petitioners herein were arrayed as accused 1 and 2 in C.C.No.255/2009 on the file of the Judicial First Class Magistrate Court-I, Aluva, which was taken on file on the basis of Annexure-A private complaint filed by the first respondent alleging that the petitioners have committed the offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as 'the Act'). The case of the complainant in the complaint was that the accused entered into an agreement in relation to a business transaction on 14.5.2003 and as part of the contract and terms and conditions stipulated therein, the complainant had paid an advance of Rs.10 lakhs. Later on 20.9.2003, the complainant had withdrawn from the agreement dated 14.5.2003 and demanded the accused Crl.M.C.No.6277 of 2013 2 to return the advance amount. They issued a cheque with No.269970 drawn on Centurion Bank, Anna Nagar, West Chennai for Rs.10 lakhs dated 18.3.2004 to the complainant. When the cheque was presented by the complainant with his banker, it was dishonoured with the endorsement 'account closed'. The complainant issued a notice intimating the dishonour and demanding the payment and the petitioners sent a reply to the same. Since the amount was not paid, the complainant filed Annexure-A complaint, which, after enquiry, was taken on file by the learned Judicial First Class Magistrate Court-I, Aluva as C.C.No.255/2009. According to the petitioners, the allegations in the complaint do not make out an offence as before presentation of the cheque by the complainant, part payments were effected by the accused towards the amount covered by the cheque and in spite of that, the complainant had presented the cheque for enforcement of the entire liability covered by the cheque and as such, there is no legally enforceable debt due from the complainant for the amount covered by the cheque and the complaint is not maintainable. Further, there is want of jurisdiction for the court to entertain the complaint as well. So according to the petitioners, the 3 Crl.M.C.No.6277 of 2013 proceeding with the complaint will only amount to an abuse of process of law. So, the petitioners have no other remedy except to approach this Court seeking the following reliefs: “For these and other grounds that may be urged at the time of hearing, it is humbly prayed that this Hon'ble Court may be pleased to allow this Crl.MC, quash Annexure -A complaint and all further proceedings pursuant thereto in C.C.No.255/2009 pending on the files of the Judicial First Class Magistrate Court-I, Aluva against the petitioners/accused 1 and 2 so as to secure the ends of justice. 3. The first respondent appeared and filed counter affidavit contending that the allegations are not correct. The cheque was issued for return of deposit of Rs.10 lakhs made in connection with the business transaction with the accused and when that was not materialised, they issued the cheque for return of the amount. The amount paid by the accused does not relate to this amount but that was sent for meeting the expenses met by the complainant for making advertisement, placing hoarding etc and also towards interest for the deposit as agreed by the accused which is clear from Annexure- R5 letter sent by 4 Crl.M.C.No.6277 of 2013 the accused. So it cannot be said that part payment has been made before presentation of the cheque as claimed by the counsel for the petitioners. 4. Heard both sides. 5. The learned counsel submitted that since part payments were made after the issuance of the cheque towards the amount due as per the cheque before it was presented, then it cannot be said that there is legally enforceable debt due from the accused when the cheque was presented and nothing was mentioned in the complaint regarding the same as well. The subsequent letter produced by the respondents will not take away their liability to establish that the amount was due as on the date of presentation of the cheque and when the complaint was filed. He had relied on the decision reported in **Joseph Sartho v. G. Gopinathan and another** ((2008 (4) KHC 463) in support of his case. 6. On the other hand, the counsel for the first respondent argued that the document produced by the respondents will go to show that subsequent payments were made towards interest payable and also the expenses incurred for making advertisement by the first accused which the accused are Crl.M.C.No.6277 of 2013 5 liable to pay which is clear from Anenxure-R5 letter by the accused. So under the circumstances, the dictum laid down in the above decision is not applicable and the complaint cannot be quashed at the initial stage invoking the power under Section 482 of the Code. 7. The learned Public Prosecutor also supported the case of the first respondent. 8. It is an admitted fact that there was an agreement between the first petitioner company and the first respondent for sale of their articles for which amount of Rs.10 lakhs obtained as advance/security from the complainant. It is also an admitted fact that due to some reason, the complainant had withdrawn from the agreement and the first accused through the second accused issued a cheque for Rs.10 lakhs in favour of the complainant drawn on Centrurion Bank, Anna Nagar, West Chennai in favour of the complainant towards return of the deposit amount with them. It is also an admitted fact that the cheque was presented for collection through Central Bank of India, Aluva and it was dishonoured by the drawee bank for the reason 'account closed' and the complainant had issued a notice dated 5.10.2004 to M/s. Galexy Ameze Kingdom, the first Crl.M.C.No.6277 of 2013 6 petitioner herein and also to the Managing Director Sri. M. Palanichami, the second petitioner herein intimating dishonour and demanding payment of the amount. It is also an admitted fact that the amount was not paid. So the complainant presented Annexure-A complaint before the Judicial First Class Magistrate Court-I, Aluva and after enquiry, it was taken on file as C.C.No.255/2009. It is also an admitted fact that the petitioners have issued Annexure-B letter along with demand draft for Rupees One lakh in favour of the complainant dated 7.5.2004 and also Annexure-C letter along with demand draft for Rs.50,000/- dated 28.10.2004. It is also an admitted fact that total amount of Rs.3,60,000/- was paid by four demand drafts including the two demand drafts mentioned above by the first petitioner to the first respondent. It was acknowledged by him. It is also in a way admitted in the complaint that the petitioners have issued Annexure-D reply notice to the notice sent by the first respondent intimating the dishonour and demanding payment in which also the payment of Rs.3,60,000/was mentioned and they also stated that they will pay the the balance amount. According to the petitioners, this amount was paid towards the amount due covered by the cheque which 7 Crl.M.C.No.6277 of 2013 was dishonoured for the reason 'account closed' and according to the complainant, it was relating to some other amount due. It is true that in the decision reported in **Joseph Sartho** (cited supra), a Division Bench of this Court has held that after the issuance of the cheque and before presentation of the cheque, if a portion of the amount is paid covered by the cheque and if such payment was not endorsed on the cheque and the cheque was presented claiming full amount, then it cannot be said that there was legally enforceable debt due as on the date of the presentation of the cheque for the amount covered by the cheque and in such cases, the offence under Section 138 of the Act is not attracted. That was a case where the cheque was issued for a particular amount and after the issuance of the cheque, certain amounts were paid which was acknowledged by the complainant, but it was not given credit to and the complainant presented the cheque for the entire amount due as per the cheque without deducting the amount paid towards that liability and that fact was not in dispute as well between the parties. So in such circumstances, this Court has come to the conclusion that it cannot be said that there was legally enforceable debt for the amount covered by the cheque as on Crl.M.C.No.6277 of 2013 8 the date of filing of the complaint as well on the date of presentation of the cheque which is the main ingredient to be proved by the complainant to attract the offence under Section 138 of the Act and in the absence of such allegation, the complaint under Section 138 is not maintainable and the accused is entitled to get acquittal. 9. In this case the complainant had produced AnnexureR5 letter sent by the first petitioner company through its administrative officer to the complainant stating that out of Rs.3,60,000/- paid, Rs.90,000/- is the amount payable as interest on deposit of Rs.10 lakhs and the balance amount of Rs.2,70,000/- is paid against the amount paid by the complainant for hoarding and wall advertisement at Calicut and Idukki districts which were done as per their instructions. So it is clear from this letter that the amount sent are not towards the amount of Rs.10 lakhs for which cheque was issued but for some other purposes. If that be so, it cannot be said that the amount was paid in part payment of the amount covered by the cheque so as to attract the dictum laid down in the decision reported in **Joseph Sartho** (cited supra). In such circumstances, it cannot be said that there was no legally enforceable debt due Crl.M.C.No.6277 of 2013 9 as on the date of presentation of the cheque and whether the cheque was issued in partial discharge of that amount or some other purpose as claimed in Annexure-R5 letter etc are matters to be considered by the trail court on the basis of evidence and as such, it is not a fit case for quashing the complaint as claimed by the petitioners under Section 482 of the Code. 10. As regards the jurisdictional issue is considered, the cheque was issued to the complainant concern which is in Aluva and the cheque was presented in a bank at Aluva and notice was issued from Aluva where the complainant is having its business concern and the amount is payable at Aluva where the complainant is doing business. So under such circumstances, it cannot be said that Aluva Court has no jurisdiction to entertain the complaint as claimed in the petition. So that ground is also not available to the petitioners to quash the proceedings invoking the power under Section 482 of the Code. 11. In view of the discussions made above, it can be safely concluded that it is not a fit case where the power under Section 482 of the Code has to be invoked to quash the proceedings as it cannot be said at this stage that the amount is not legally due as on the date of presentation of the complaint or Crl.M.C.No.6277 of 2013 10 presentation of the cheque in the bank as claimed by the petitioners and the petitioners are not entitled to get the relief of quashing the complaint and the petition is liable to be dismissed. 12. In the result, the petition is dismissed. The interim order of stay granted by this Court as per order in Crl.M.A.No.10636/2013 and extended from time to time is hereby vacated. 13. Parties are directed to appear before the court below on 30.7.2014 and considering the fact that the case is of the year 2009, the lower court is directed to expedite the disposal of the case as early as possible, at any rate within four months from the date of receipt of a copy of this order. Office is directed to communicate this order to the concerned court immediately. Sd/- ## **K. RAMAKRISHNAN, JUDGE.** cl /true copy/ P.S to Judge