Case Note & Summary
The petitioner, Harshad Jayprasad Bakshi, filed a criminal writ petition challenging the order of the learned Metropolitan Magistrate, 12th Court, Mumbai, dated 21st January 2011, in C.C.No.585/SS/08. The Magistrate had allowed the application of accused Nos. 1 to 3 and discharged them of offences punishable under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. The petitioner was the original complainant in a cheque bounce case. The cheques were presented after 19th December 2007, the date of an order passed by the Board for Industrial and Financial Reconstruction (BIFR) under Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The BIFR order was effective for eight weeks. The demand notice was issued on 21st January 2008, received by accused Nos. 1 and 3 on 24th January 2008, and the statutory period expired on 8th February 2008. The trial court held that the offence could be said to be committed only after 9th February 2008, and thus the BIFR order protected the accused. The petitioner argued that the trial court misconstrued the ratio of Kusum Ingots Vs. Pennar Peterson Securities Ltd. & Ors. (2000) 2 SCC 745 and that the BIFR order cannot be a reason to discharge the accused. The court, after hearing both sides, set aside the impugned order and directed the trial court to proceed with the complaint in accordance with law. The court held that the trial court's reasoning was erroneous and that the material at the prima facie stage was enough to frame charges.
Headnote
A) Criminal Procedure - Discharge - Section 245 CrPC - Negotiable Instruments Act - Section 138 - The trial court discharged the accused solely on the ground that the cheques were presented after the BIFR order under Section 22 of SICA, which was erroneous. The court held that the BIFR order does not automatically bar criminal proceedings under Section 138 NI Act, and the trial court must consider the material on record to see if a prima facie case exists. (Paras 1-4) B) Sick Industrial Companies - Section 22 SICA - Criminal Proceedings - The mere passing of an order by BIFR under Section 22 of SICA cannot be a reason to quash or discharge the accused in a criminal case under Section 138 of the NI Act, as held in M/s.Aefloat Textiles (India) Ltd. & Anr. Vs. M/s.Boghara Polyfab Pvt. Ltd. 2008 Cr.L.J. 1494. (Para 3)
Issue of Consideration
Whether the pendency of proceedings before BIFR and an order under Section 22 of SICA can be a ground to discharge the accused in a complaint under Section 138 of the Negotiable Instruments Act, 1881.
Final Decision
The court set aside the impugned order dated 21st January 2011 passed by the learned Metropolitan Magistrate, 12th Court, in C.C.No.585/SS/08, and directed the trial court to proceed with the complaint in accordance with law.
Law Points
- Discharge under Section 245 CrPC
- Section 138 NI Act
- Section 22 SICA
- BIFR order does not bar criminal proceedings
- Kusum Ingots case distinguished
