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2023 DAILYLAW 893 (ORI)

Bharat Salts & Chemicals Ind. Ltd. v. State of Odisha

2023-07-27

S K Panigrahi

body2023
JUDGMENT : S.K. Panigrahi, J. 1. The Petitioners through this Petition have assailed the illegality and abuse of process of law perpetrated by the Opposite Party No.7 in entangling the Petitioners and its Directors in false and frivolous complaint cases instituted in the Court of the learned J.M.F.C., Panchkula. The Petitioners also simultaneously seek a direction to the learned S.D.J.M.(Sadar), Cuttack to expedite the hearing of I.C.C. Case No.117 of 2018 pending in his file as the outcome of which will establish the crime committed by the Opposite Party No.7 in instituting false criminal complaint cases with the sole intention to cause harassment and by means of extortion from the present Petitioners by intentionally playing fraud and securing orders from Court by suppressing material facts before the Court of law. I. F ACTUAL M ATRIX OF THE C ASE 2. The Petitioner No.1 is a company duly incorporated under the Companies Act in the name and style of M/s. Bharat Salt and Chemicals Ind. Ltd. having its registered Office at Chhatra Bazar in Cuttack city and Petitioner Nos.2 to 4 are its Directors who are also residing and carrying on its business at Cuttack. 3. The Petitioners were having trading terms with the Opposite Party No.7 and in course of such business, had indented for and procured materials manufactured by the Opposite Party No.7 for which it had tendered two cheques i.e. cheque No.021834 dated 25.08.2017 and No.021801 drawn in Bank of India, Ranihat Branch, Cuttack dated 11.07.2017 for Rs.1,05,779/- and dated 11.07.2017 for Rs.3,17,656 respectively through its logistic partner M/s. VRL Logistics Ltd. 4. There were disputes with regard to the quality of the goods for which the Petitioners instructed the Opposite Party No. 7 not to encash the cheques. Despite such express instructions, the Opposite Party No.7 presented the cheques in question and the same were dishonored with the endorsement that ’funds insufficient’. Even though the Petitioners had instructed its bankers to refer to them in case the cheques were being presented. The banks obviously did not follow the instructions of the Petitioners. 5. The Opposite Party No.7, in the meantime, issued notices as contemplated under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “the N.I. Act” for brevity). Even though the Petitioners had instructed its bankers to refer to them in case the cheques were being presented. The banks obviously did not follow the instructions of the Petitioners. 5. The Opposite Party No.7, in the meantime, issued notices as contemplated under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “the N.I. Act” for brevity). In response, the Petitioners transferred the cheque value amounting to Rs.1,05,779/- which is in respect of one of the cheques by NEFT mode of transfer dated 09.11.2017 for Rs.50,000/- and on 12.12.2017 for Rs.55,779/- the said amount has duly been credited to the account of Opposite Party No.7. As regards the face value of the second cheque, the Petitioners made payment of Rs.1,00,000/- in equal installments of Rs.50,000/- each through NEFT mode of transfer dated 18.09.2017 and 10.10.2017 and wrote to the Opposite Party No.7 that the entire amount was firstly not payable due to defect in goods supplied by them and secondly there was material alteration in the cheque in question wherein the dates of the cheque had been mischievously altered thereby causing forgery to the negotiable instrument. It is extremely important to state here that by materially altering the date of the cheque the Opposite Party No.7 had revalidated an invalid negotiable instrument. 6. Despite the communications and payments made by the Petitioners, and suppressing the same, the Opposite Party No.7 proceeded to initiate NACT Case No. 44 of 2018 and NACT Case No. 45 of 2018 in the Court of the Learned J.M.F.C., Panchkula. In the meantime, having noticed the material alteration in the negotiable instrument, the Petitioner has instituted ICC Case No.117 of 2018 in the Court of the learned S.D.J.M. Cuttack. 7. Learned S.D.J.M. Cuttack issued direction under Section 156 (3) Cr.P.C. directing the police to investigate the allegations and the I.O. of Malgodown P.S. conducted a preliminary inquiry and was prima facie satisfied that the alleged material alteration had, in fact, been effected on the negotiable instrument. He, however, opined that the case would appropriately come within the jurisdiction of the Mangalabag P.S. and instead of transferring the complaint to that P.S., accordingly, submitted his report to court. 8. He, however, opined that the case would appropriately come within the jurisdiction of the Mangalabag P.S. and instead of transferring the complaint to that P.S., accordingly, submitted his report to court. 8. Based on the opinion of the IIC, Malgodown P.S., the learned Magistrate issued directions to the IIC, Mangalabag P.S. to investigate into the matter by order dated 02.07.2019 and since then although several reminders have been issued by the court to the IIC, Mangalabag P.S. calling for submission of the results of his investigation but the I.I.C. Mangalabag P.S. is sitting over the matter and has not proceeded with the investigation till date causing grave prejudice to the Petitioner No.1 and its Directors. II. P ETITIONERS ’ S UBMISSIONS 9. Learned counsel for the Petitioners earnestly made the following submissions in support of his contentions: 10. The Petitioners engaged an Advocate at Panchkula to appear on their behalf in the aforementioned complaint cases and also sought to file applications under Section 340 of the Cr.P.C. and under Section 205 of the Cr.P.C. But, the learned Court at Panchkula refused to entertain the same on the plea that it is a standard practice in their Court that the accused persons are to appear in person at the first instance and seek for bail and only thereafter can make applications which would then be considered at its own merits. Such procedure adopted by the Court at Panchkula not only militates against the statutory provisions engrafted under Section 205 and under Section 305 of the Cr.P.C. thereby rendering those provision nugatory. But the same is also against the principles laid down by the Supreme Court in Inder Mohan Goswami v. State of Uttaranchal & Ors., (2007) 12 SCC 1 reiterated as below: “Civilized countries have recognized that liberty is the most precious of all the human rights. The American Declaration of Independence 1776. French Declaration of the Rights of Men and the Citizen 1789, Universal Declaration of Human Rights and the International Covenant of Civil and Political Rights 1966 all speak with one voice - liberty is the natural and inalienable right of every human being. Similarly, Article 21 of our Constitution proclaims that no one shall be deprived of his liberty except in accordance with the procedure prescribed by law. The issuance of non-bailable warrants involves interference with personal liberty. Similarly, Article 21 of our Constitution proclaims that no one shall be deprived of his liberty except in accordance with the procedure prescribed by law. The issuance of non-bailable warrants involves interference with personal liberty. Arrest and imprisonment means deprivation of the most precious right of an individual. Therefore, the courts have to be extremely careful before issuing non-bailable warrants. Just as liberty is precious for an individual so is the interest of the society in maintaining law and order. Both are extremely important for the survival of a civilized society. Sometimes in the larger interest of the Public and the State it becomes absolutely imperative to curtail freedom of an individual for a certain period, only then the non-bailable warrants should be issued. When non-bailable warrants should be issued Non-bailable warrant should be issued to bring a person to court when summons of bailable warrants would be unlikely to have the desired result. This could be when it is reasonable to believe that the person will not voluntarily appear in court; or the police authorities are unable to find the person to serve him with a summon or it is considered that the person could harm someone if not placed into custody immediately. As far as possible, if the court is of the opinion that a summon will suffice in getting the appearance of the accused in the court, the summon or the bailable warrants should be preferred. The warrants either bailable or non-bailable should never be issued without proper scrutiny of facts and complete application of mind, due to the extremely serious consequences and ramifications which ensue on issuance of warrants. The court must very carefully examine whether the Criminal Complaint or FIR has not been filed with an oblique motive.” 11. The Petitioner No.1 and its Directors are at their wits end on the face of the facts and circumstances narrated herein above and have now been informed that the Court at Panchkula by its order dated 10.02.2023 has issued NBWs against the Petitioner No.1 and its Directors without adverting to stipulations as has been laid down by the Apex Court in Inder Mohan Goswami (supra). 12. Since the warrants have been issued against the Petitioners by the Court at Panchkula and are sought to be executed by the Haryana Police within this Court’s jurisdiction at Cuttack. 12. Since the warrants have been issued against the Petitioners by the Court at Panchkula and are sought to be executed by the Haryana Police within this Court’s jurisdiction at Cuttack. This Court has jurisdiction to entertain this Writ Petition and interfere with the case since the execution of the said non- bailable warrants would not be in compliance with the procedure established by law and consequential deprivation of the personal liberty of the Petitioner No.1 and its Directors would amount to violation of the fundamental rights enshrined in Article 21 of the Constitution of India. 13. The aforementioned facts and circumstances establish beyond reasonable doubt. The manner in which the process of law is being abused to the detriment to the Petitioner and its Directors to wreak vengeance which calls for urgent interference of this Court by exercise of its extraordinary writ jurisdiction. 14. The Opposite Party No.2 has purposefully tampered with the negotiable instrument consciously committing breach of trust and fraud by making material altercation, thereby attracting penal sanctions in law. As reiterated by the Apex Court in its leading judgment in S.P Chengalvaraya Naidu vs Jagannath , 1994 AIR SC 853 “Fraud avoids all judicial acts, ecclesiastical or temporal" observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. Such a judgment/decree by the first court or by the highest court has to be treated as a nullity by every court, whether superior or inferior. It can be challenged in any court even in collateral proceeding.” III. C OURT ’ S R EASONING AND A NALYSIS 15. It is well settled principle of law as has been laid down by the Supreme Court that Section 138 (b) of the NI Act provides that the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid. It means, once the payee produces the cheque for encashment/payment and the same gets dishonoured due to insufficiency of funds, the payee has 30 days to serve a legal notice to the drawer of the cheque regarding payment of money. 16. Section 138 (c) of the NI Act lays that the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. In other words, after receiving a legal notice for cheque bounce, it is the duty of drawer of the cheque to repay the debt amount within a period of 15 days of receipt of such notice. Otherwise, the payee gets the right to proceed through the Court of law. Hence, the cause of action arises from the 16th day after serving the cheque bounce notice to the drawer. 17. In the present case, the Petitioners had tendered two cheques bearing No.021834 dated 25.08.2017 and No.021801 in favour of Opposite Party No.7 drawn in Bank of India, Ranihat Branch, Cuttack dated 11.07.2017 for Rs.1,05,779/- and dated 11.07.2017 for Rs.3,17,656 respectively through its logistic partner M/s. VRL Logistics Ltd. 18. There were disputes with regard to the quality of the goods for which the Petitioners instructed the Opposite Party No.7 not to encash the cheques. Despite such express instructions, the Opposite Party No.7 presented the cheques in question and the same were dishonored with the endorsement ’funds insufficient’. Even though the Petitioners had instructed its bankers to refer to them in case the cheques were being presented. 19. The Opposite Party No.7, in the meantime, issued notices as contemplated under Section 138 of the NI Act in response thereto the Petitioners transferred the cheque value amounting to Rs.1,05,779/- which is in respect of one of the cheques by NEFT mode of transfer dated 09.11.2017 for Rs.50,000/- and on 12.12.2017 for Rs.55,779/- which amounts have duly been credited to the account of Opposite Party No.7. The Petitioners have defaulted the payment by nearly 4 months and, therefore, this Court does not deem fit to interfere with the hearing of I.C.C. Case No.117 of 2018. 20. The Petitioners have defaulted the payment by nearly 4 months and, therefore, this Court does not deem fit to interfere with the hearing of I.C.C. Case No.117 of 2018. 20. The Petitioners engaged an Advocate at Panchkula to appear on their behalf in the aforementioned complaint cases and also sought to file applications under Section 340 of the Cr.P.C. and under Section 205 of the Cr.P.C. But the learned Court at Panchkula refused to entertain the same on the plea that it is a standard practice in their Court that the accused persons are to appear in person at the first instance and seek for bail and only thereafter can he make applications which would then be considered at its own merits. 21. Learned Counsel for the Petitioners has rightly contended that such procedure adopted by the Court at Panchkula not only militates against the statutory provisions engrafted under Section 205 and under Section 305 of the Cr.P.C. thereby rendering those provision nugatory. But, the said is also against the principles laid down by the Supreme Court in Inder Mohan Goswami v. State of Uttaranchal & Ors., (2007) 12 SCC 1 reiterated as below: “Civilized countries have recognized that liberty is the most precious of all the human rights. The American Declaration of Independence 1776. French Declaration of the Rights of Men and the Citizen 1789, Universal Declaration of Human Rights and the International Covenant of Civil and Political Rights 1966 all speak with one voice - liberty is the natural and inalienable right of every human being. Similarly, Article 21 of our Constitution proclaims that no one shall be deprived of his liberty except in accordance with the procedure prescribed by law. The issuance of non-bailable warrants involves interference with personal liberty. Arrest and imprisonment means deprivation of the most precious right of an individual. Therefore, the courts have to be extremely careful before issuing non-bailable warrants. Just as liberty is precious for an individual so is the interest of the society in maintaining law and order. Both are extremely important for the survival of a civilized society. Sometimes in the larger interest of the Public and the State it becomes absolutely imperative to curtail freedom of an individual for a certain period, only then the non-bailable warrants should be issued. Both are extremely important for the survival of a civilized society. Sometimes in the larger interest of the Public and the State it becomes absolutely imperative to curtail freedom of an individual for a certain period, only then the non-bailable warrants should be issued. When non-bailable warrants should be issued Non-bailable warrant should be issued to bring a person to court when summons of bailable warrants would be unlikely to have the desired result. This could be when it is reasonable to believe that the person will not voluntarily appear in court; or the police authorities are unable to find the person to serve him with a summon or it is considered that the person could harm someone if not placed into custody immediately. As far as possible, if the court is of the opinion that a summon will suffice in getting the appearance of the accused in the court, the summon or the bailable warrants should be preferred. The warrants either bailable or non-bailable should never be issued without proper scrutiny of facts and complete application of mind, due to the extremely serious consequences and ramifications which ensue on issuance of warrants. The court must very carefully examine whether the Criminal Complaint or FIR has not been filed with an oblique motive.” 22. In complaint cases, at the first instance, the court should direct serving of the summons along with the copy of the complaint. If the accused seems to be avoiding the summons, the court, in the second instance should issue bailable- warrant. In the third instance, when the court is fully satisfied that the accused is avoiding the court’s proceeding intentionally, the process of issuance of the non-bailable warrant should be resorted to. Personal liberty is paramount. Therefore, this Court cautions at the first and second instance to refrain from issuing non-bailable warrants. 23. The power being discretionary must be exercised judiciously with extreme care and caution. The court should properly balance both personal liberty and societal interest before issuing warrants. There cannot be any straightjacket formula for issuance of warrants but as a general rule, unless an accused is charged with the commission of an offence of a heinous crime and it is feared that he is likely to tamper or destroy the evidence or is likely to evade the process of law, issuance of non-bailable warrants should be avoided. 24. 24. The court is required to be strike a proper balance between individual liberty and the interest of the public and the State while issuing non-bailable warrant. Considering the totality of facts and circumstances of this case, the impugned orders dated 10.02.2023 passed by the learned J.M.F.C., Panchkula passed in NACT Case Nos.44 and 45 of 2018 cannot be sustained. Therefore, this Court is of the opinion that the NBW issued should be quashed. This Court, however, does not deem it fit to interfere with the hearing of I.C.C. Case No.117 of 2018 of the court of the learned S.D.J.M. (Sadar), Cuttack. 25. Accordingly, this CRLMP is disposed of.