Aarti Trehan And Another vs. M/S Super Oils

Facts

The petitioners, Aarti Trehan and another, filed a petition under Section 482 of the Code of Criminal Procedure seeking to quash a criminal complaint and a summoning order. The complaint was filed by M/s Super Oils, alleging that the petitioners committed an offence under Section 138 of the Negotiable Instruments Act, 1881. The respondent alleged that the petitioners purchased industrial oils and lubricants, agreeing to pay interest at 18% per annum. Payments were made between September 1, 2022, and October 21, 2022. As of November 1, 2022, Rs. 2,11,073/- was payable. The petitioners issued two cheques for Rs. 1,13,245/- and Rs. 96,146/- respectively, which were dishonoured with the remark "Payment stopped by drawer". A legal notice was issued, but payment was not made, leading to the complaint. The Magistrate summoned the petitioners, finding a prima facie case.

Held

The Court held that a criminal complaint and a summoning order can be quashed under Section 482 of the Code of Criminal Procedure under specific circumstances, as laid down by the Supreme Court in cases like Smt. Nagawwa Vs. Veeranna Shivalingappa Konjalzi and others, Bhushan Kumar and another Vs. State (NCT of Delhi) and another, and M/s. Pepsi Foods Ltd. and another v. Special Judicial Magistrate and others. The Court reiterated that the inherent powers under Section 482 Cr.P.C. cannot be used to determine disputed questions of fact, which are for the trial court to decide after examining evidence. The Supreme Court has consistently held that quashing proceedings at a pre-trial stage, especially in cases involving Section 138 of the NI Act, can be grave and irreparable, potentially giving the accused an unmerited advantage. The burden of proof to rebut the presumption under Section 139 of the NI Act lies with the accused. The Court noted that the petitioners did not deny their signatures on the cheques or their issuance. The claim that the cheques were security cheques requires minute scrutiny of evidence, which cannot be done in a Section 482 petition. The Court also referred to the principle that a security cheque is an integral part of a commercial process and can be used to discharge a liability. Therefore, the Magistrate's view that the cheques were drawn in discharge of a legally enforceable debt is a possible view, and interference at this stage is not judicious. The petition was dismissed.

Key Issues

1. Whether the High Court can quash a criminal complaint and a summoning order under Section 482 of the Code of Criminal Procedure when the allegations, taken at face value, make out no case against the accused, or the complaint lacks essential ingredients of the alleged offence? 2. Whether the High Court can quash a criminal complaint and a summoning order under Section 482 of the Code of Criminal Procedure when the allegations are patently absurd and inherently improbable? 3. Whether the High Court can quash a criminal complaint and a summoning order under Section 482 of the Code of Criminal Procedure when the Magistrate's discretion in issuing process was capricious or arbitrary? 4. Whether the High Court can quash a criminal complaint and a summoning order under Section 482 of the Code of Criminal Procedure when the complaint suffers from fundamental legal defects? Petitioner's Arguments: The cheques were issued as security cheques. The last consignment of goods was defective, and the respondent failed to reconcile accounts or replace the defective material. Therefore, no legally enforceable liability existed. The cheque amounts did not correspond to the alleged payable amount, and substantial payments had been made, negating any liability. The complaint and summoning order are not sustainable. Respondent's Arguments: There is no illegality in the summoning order. The cheques were issued to discharge a legally enforceable liability, and payment was intentionally stopped. The trial court considered the evidence and passed a well-reasoned order. Interference under Section 482 Cr.P.C. is not warranted unless there is incontrovertible evidence that the petitioners had no concern with the cheques, which would constitute an abuse of process. The petition lacks merit.