Naveen Kumar @ Naween Kumar vs. The State Of Bihar

Facts

The petitioner, Naveen Kumar, is seeking anticipatory bail in a case registered for offences under Sections 406 and 420 of the Indian Penal Code and Section 138 of the Negotiable Instruments Act, 1881. The complainant, a transporter, alleges that the petitioner, a road and building construction contractor, issued a cheque for Rs. 17,64,600/- for transportation services rendered. The cheque was dishonoured with the endorsement 'payment stopped'. The petitioner contends that a commercial dispute has been given a criminal colour, that the cheque was issued as security, and that the company he manages has a substantial turnover. He further claims to have overpaid the complainant and that the complainant failed to provide necessary GST and other documentation. The petitioner also highlights that the offence under Section 138 of the Negotiable Instruments Act is bailable.

Held

The Court considered the submissions made by the learned counsel for the petitioner. It noted that the offence under Section 138 of the Negotiable Instruments Act is bailable. The Court also acknowledged the petitioner's submission that the dispute was commercial in nature, arising from an agreement between the parties. The petitioner's argument that the cheque was issued by way of security and not for payment of any debt or liability was also taken into account. Furthermore, the petitioner's claim that payments had been made, and that the issue of whether complete payments were made was a matter of accounting, was considered. The Court found that these aspects did not necessarily fall within the purview of a criminal case. Consequently, considering the totality of the submissions, the Court decided to grant anticipatory bail to the petitioner.

Key Issues

1. Whether the dispute, arising from a dishonoured cheque issued in the context of a commercial agreement for transportation services, constitutes an offence under Sections 406 and 420 of the Indian Penal Code, or if it is primarily a civil/commercial dispute. This issue turns on the interpretation of intent to cheat and criminal breach of trust in a contractual relationship. 2. Whether the issuance of a cheque as security, which was subsequently dishonoured due to 'payment stopped', can form the basis of a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881, and Sections 406/420 of the IPC. Petitioner's arguments: The petitioner argued that the dispute is commercial in nature, not criminal. He asserted that the cheque was issued as security, not for a debt. He highlighted substantial payments made and alleged overpayment, supported by company turnover figures. He also pointed out the complainant's failure to provide GST bills and other required documents. He further contended that the offence under Section 138 of the Negotiable Instruments Act is bailable and that the learned trial court mechanically took cognizance under Section 420 IPC. Revenue/State's arguments: The State and the complainant opposed the prayer for anticipatory bail but could not rebut the petitioner's submissions regarding the bailable nature of the Section 138 offence and the commercial nature of the dispute.