M/S Harini Ceramics vs. M/S Ozone Infrastructure

Facts

The appellant, M/s Harini Ceramics, represented by its proprietor Anandakumar, filed a criminal appeal challenging the dismissal of his complaint against the respondent, M/s Ozone Infrastructure. The complaint was filed under Section 138 of the Negotiable Instruments Act, 1881, for dishonour of cheques. The appellant supplied vitrified tiles worth ₹10,52,744.16 and additional material worth ₹7,47,457/-, including GST, totaling ₹8,81,964/-. The respondent issued three cheques for ₹17,47,200/-, ₹3,76,896/-, and ₹21,24,096/-, all of which were dishonoured. The trial court dismissed the complaint on 27.11.2021 for the complainant's failure to take steps and apparent lack of interest in prosecuting the case. The appellant contended that he was diligently prosecuting the case but was hindered by COVID-19 related adjournments.

Held

The High Court allowed the appeal, setting aside the trial court's order dated 27.11.2021. The Court reasoned that while the order sheet indicated the complainant and his counsel were absent on certain dates (20.09.2021, 05.10.2021, and 13.10.2021), the significant amount due under the cheque (₹21,24,096/-) and the respondent's conduct of evading court process warranted giving the complainant one more opportunity to prosecute the complaint. The Court found that the respondent had intentionally evaded court process, as evidenced by the RPAD returning with 'No such person' and his absence even after being served with notice in the High Court. The ratio decidendi is that in cases involving substantial amounts and an accused's evasive conduct, a complaint should not be dismissed for non-prosecution without a thorough examination of the circumstances preventing the complainant from taking steps, especially when the delay is attributable to factors like a pandemic or the accused's actions.

Key Issues

1. Whether the trial court erred in dismissing the complaint for non-prosecution, despite the appellant's contention of diligent prosecution hindered by circumstances beyond his control, thereby violating principles of natural justice? Petitioner's Arguments: The appellant argued that the dismissal was premature and that he was actively pursuing the case. He contended that the adjournments due to the COVID-19 pandemic and the transfer of the case prevented him from taking necessary steps. He asserted that he was not given a reasonable opportunity to prosecute the complaint and that the dismissal was made without proper consideration of these factors. Revenue/State's Arguments: The judgment does not record any specific arguments made by the revenue or state. However, the trial court's order, which is under challenge, was based on the observation that the complainant had failed to take steps and was not interested in prosecuting the case.